[TMAX Resources] Arctic gold miner hopes metal rally can lift its fortunes as it looks for a buyer amid operational challenges – by Gabriel Friedman (Financial Post – January 21, 2020)


Whatever happens to TMAC Resources could influence how investors view opportunities in the Canadian Arctic

Canadian gold producer TMAC Resources announced Monday it is looking for a buyer after hitting consistent operational challenges at its Nunavut mine that have hampered its ability to expand.

The Toronto-headquartered company said it is studying whether a sale, joint venture partnership or an alternative financing could buoy its share price, which has declined more than 57 per cent since July — even as gold prices increased during much of that time. The stock was down 5 per cent on Monday to $2.85 on the Toronto exchange.

Whatever happens to the company could influence how investors view opportunities in the Canadian Arctic. For years, mining industry leaders have said the vast undeveloped north will be the next frontier for exploration and development. But the operational challenges that TMAC faced, despite backing from industry veterans, highlight the risks associated with the Arctic.

Jason Neal, chief executive of TMAC, told the Financial Post on Monday — as his flight to Nunavut was about to board — the company plans to release a pre-feasibility study that lays out the costs and benefits of expansion in Nunavut.

“What it’s going to show is a future value for the company that’s quite robust, but that requires another phase of capital,” said Neal. “It probably feels defensive, but it’s also playing offence in a lot of ways. It’s preparing the company for the future ground.”

For the rest of this article: https://business.financialpost.com/commodities/mining/arctic-gold-miner-hopes-metal-rally-can-lift-its-fortunes-as-it-looks-for-a-buyer-amid-operational-challenges