Gold miner TMAC Resources has initiated a strategic process to explore alternatives, which may include a potential sale or merger of the company, joint venture of the Hope Bay mine, in Nunavut, or introducing a new strategic shareholder or various long-term financing alternatives.
The announcement comes as TMAC reported fourth-quarter production of 24 650 oz, which was at the low-end of its guidance and 138 510 oz for the full year. The most significant driver of the weak fourth-quarter output was the deferral of mining at the BTD East Limb, owing to rehabilitation work, TMAC explained.
President and CEO Jason Neal said on Monday that Resource Capital Funds and Newmont – its largest two shareholders representing 58.5% of its outstanding shares – were supportive of the strategic process, which the company hoped would enhance trading liquidity and generate financial strength for the remote Hope Bay mine to achieve its potential.
“A transaction early 2020 would provide an advantage in planning and procurement for the 2020 sealift, which may include additional purchases to support investment that TMAC may not otherwise make itself at this time,” said Neal.
Hope Bay has not reached its targets yet, despite the company having focused on operational performance improvements since construction was completed.
“Ultimately, however, the value of Hope Bay may be greater in the context of a multi-asset portfolio and/or a stronger balance sheet, which is the driving force behind our strategic review process,” Neal said.
TMAC closed 5% down at C$2.85 a share in Toronto on Monday, giving it a market capitalisation of C$327.85-milion.