Federal government orders national security review of TMAC-SD gold sale
“TMAC and Shandong remain committed to working with Investment Review Division to secure transaction approval.”
The federal cabinet has ordered a national security review of the proposed sale of TMAC Resources Inc., which owns the Hope Bay gold mine in western Nunavut, to Chinese state-owned Shandong Mining Co. Ltd. , TMAC announced today.
“TMAC and Shandong remain committed to working with the Investment Review Division to secure the approval of the transaction,” TMAC said in a statement on Thursday, October 15.
Under the Investment Canada Act, the government continues to examine whether the agreement with Shandong (SD Gold) is likely to increase employment in Canada, as well as its economic and other impacts.
But the Investment Canada Act also allows Ottawa to review a transaction for national security reasons.
Navdeep Bains, Canada’s Minister of Innovation, Science and Industry, had extended the deadline to determine whether to initiate a national security review until October 19.
The final decision on the proposed sale, first revealed in May, is expected on February 8, 2021, which TMAC says is “the outside date extended in the arrangement deal” for the transaction.
On June 26, TMAC shareholders approved the sale of the company to a subsidiary of SD Gold.
The Kitikmeot Inuit Association, which represents five communities in western Nunavut and is a shareholder of TMAC, abstained from voting on the proposed sale in June due to uncertainty as to how the sale would affect Inuit. .
But on June 30, TMAC received a final order from the Ontario Superior Court of Justice approving the transaction.
TMAC said the transaction has received all required regulatory approvals from the government of the People’s Republic of China.
But closing of the transaction is subject to receipt of “all required regulatory approvals and the satisfaction or waiver of all closing conditions,” TMAC said in its statement.
One of those closing conditions for the sale was a site visit by SD Gold, which has yet to take place, due to a recent outbreak of COVID-19 at the mine site.
With the recent COVID-19 outbreak in Hope Bay now contained, the western Nunavut gold mine said earlier this week it sees itself operating at reduced levels “for the foreseeable future.”
The mine, 125 kilometers southwest of Cambridge Bay, operated at a reduced level due to COVID-19 after sending about 60 workers from Nunavut returned home last March.
TMAC is planning new COVID-19 rapid on-site testing and contact tracing, Company President and CEO Jason Neal said in a press release earlier this week.
Hope Bay’s COVID-19 cases numbered 14 positive and two presumed positive, Neal said in the Oct. 14 press release, a tally similar to that announced Oct. 8 by the Chief Public Health Officer of Nunavut.
The company has now stepped up its new rapid on-site test device for COVID-19, Neal said.
And it plans to roll out new contact tracing technology. If there was another case of COVID-19, it would quickly find and isolate the contacts of the infected person.
The shift change at the mine was finally completed on October 12, after a 13-day delay due to the recent COVID-19 outbreak at the mine, Neal said.
“All of the individuals with positive cases have now returned home, while an on-site team disinfected and cleaned the camp before the current team arrived,” Neal said.
Neal said that “there is no significant risk of transmission of COVID-19 to local communities in Kitikmeot, as Hope Bay is geographically isolated from these communities. “
Workers in Nunavut who had been sent home saw their jobs at TMAC end on September 27, at the end of the 180-day temporary layoff period, the statement said.
“Our top priority remains the well-being of affected workers and the rest of the workers in the [the] site, while working to rehire Kitikmeot-based workers as soon as permitted, ”Neal said.
Meanwhile, Neal said TMAC is evaluating the processing plant’s operating schedule.
“It is expected that there will be no impact on the number of days of treatment expected in the fourth quarter,” Neal said in the statement.
He said the mine expects to produce enough ore, combined with low-grade stockpiles, to be able to “operate at a reduced level for the foreseeable future and at least until shipping in 2021”.
Until then, the result of the proposed sale of TMAC to SD Gold should to be clear.
TMAC said that by the end of July 2020, the company had started operating the processing plant for three weeks at a time, producing 18,420 ounces of gold in the third quarter from 79,680 ounces since the start of the year.
In the past year, TMAC sold 27,650 ounces of gold. Today, the price of an ounce of gold is US $ 1,900.