A U.S.-based activist investor is urging the Canadian government to reject the proposed acquisition of Arctic miner TMAC Resources Inc. by a Chinese state-owned gold company and is proposing an alternative capital infusion plan that would see TMAC remain as a standalone.
James Rasteh, head of New York City hedge fund Coast Capital Management, said in an interview he can raise $700-million from his investors that would negate the need for TMAC to be acquired by Shandong Gold Mining Co. Ltd.
“We can absolutely raise the capital,” Mr. Rasteh said. In May, Shandong proposed an all-cash acquisition of TMAC worth $207.4-million, a small premium to its then market share price.
The announcement was the culmination of a five-month search by TMAC to find a buyer after years of operational problems at its Doris underground gold mine in western Nunavut. Even though TMAC was widely shopped to potential investors, there were no serious bidders, other than Shandong.
The emergence of a potential alternative path for TMAC comes as Ottawa weighs whether to approve the acquisition on national security grounds.
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