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State-controlled Chinese gold company Shandong Gold Mining Co. Ltd. is buying Canada’s TMAC Resources Inc. for US$149-million, the latest struggling junior to be swept up by larger and better capitalized seniors.
Shandong is paying $1.75 a share in cash, 4.2 per cent above the Thursday close on the Toronto Stock Exchange.
Toronto-based TMAC was founded by well-known mining entrepreneur Terry MacGibbon. Its chief executive is ex-BMO Nesbitt Burns Inc. mining banker Jason Neal. TMAC operates the Doris gold mine in Nunavut, which went into production in 2017. Over the years, the miner has grappled with operational issues, particularly problems with its mill.
TMAC is the third underperforming Canadian gold company to be acquired in the past few months at a fraction of their highs. Guyana Goldfields Inc. and Semafo Inc. were also recently acquired by Silvercorp Metals Inc. and Endeavour Mining Corp.
TMAC went public in 2015 at $6 a share, raising $155-million from public investors. In a little over a year, its stock more than tripled to $19 a share. But as the Doris mine went into production in 2017, it started to encounter operational setbacks, such as much lower gold recovery rates than expected.
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