21 December 2020
TMAC Resources Inc. has been informed that the Governor in Council has issued an order under the Investment Canada Act (Canada) directing Shandong Gold Mining Co., Ltd. and its affiliate (“Shandong”) not to implement the plan of arrangement (the “Transaction”). As a result, the Transaction between TMAC and Shandong will not proceed. TMAC and Shandong are in discussions regarding termination of the Transaction.
Jason Neal, President and Chief Executive Officer of TMAC, stated, “The Transaction whereby Shandong would acquire 100% of TMAC, as announced on May 8, 2020 and approved by 97% of our shareholders on June 26, 2020, did not receive Canadian regulatory approval and will not proceed.”
Jason Neal continued, “While we are disappointed with the outcome, we are very pleased that TMAC achieved significant operation improvements at Hope Bay. We will continue to build on these improvements while considering options to manage our balance sheet. We continue to believe that the Hope Bay gold belt holds substantial value with long life production potential that presents a significant development opportunity. We have developed and are currently evaluating mining and processing plant alternative scenarios with the objectives of reducing capital expenditures and financing requirements compared with the 2020 PFS, while maximizing value. Given our September 30, 2020 unrestricted cash balance of C$71.5 million and current positive cash flow being generated, we expect to have sufficient cash on hand to fund the 2021 sealift, but not to fully repay maturing debt recently extended to June 30, 2021. We have the required consumables, materials and supplies to continue operating at current levels until the third quarter 2021 sealift arrives, including recommencement of development at Doris Central and Madrid early in 2021 and have turned our focus to addressing our June debt maturity.”
Jason Neal concluded, “I would like to thank the TMAC employees and contractors for their hard work and dedication this year as we have dealt with the unprecedented COVID-19 pandemic and the uncertainties of the Transaction, while concurrently improving our safety performance and productivity. I would also like to thank the Inuit communities and leadership of Nunavut, our business partners and other stakeholders for their patience during the regulatory review process.”