Agnico Buys Arctic Miner After Canada Nixed Sale to Chinese Firm

Canadian gold giant Agnico Eagle Mines Ltd. agreed to pay a premium to buy TMAC Resources Inc. for about C$287 million ($225 million), two weeks after Canada’s government rejected a takeover of the Arctic miner by a Chinese suitor.

Agnico will pay C$2.20 per share in cash, the Toronto-based company and TMAC said Tuesday in a joint statement. The offer is 40% more than TMAC’s closing price on Monday, and higher than the C$1.75 proposed by China’s Shandong Gold Mining Co. in May.

Agnico didn’t feel pressure to pay a premium for TMAC and basically took over the Shandong purchase arrangement that was already agreed to by TMAC shareholders, Chief Executive Officer Sean Boyd said.

“But conditions have changed since that last deal was approved,” Boyd said Tuesday by phone. “Certainly the climate for gold has improved, the mine is generating cash now — it wasn’t earlier this year.”

TMAC owns the Hope Bay gold mine in the northern territory of Nunavut, an operation that includes a port and airstrips. Agnico already has two working mines in the Canadian Arctic: Meliadine and Meadowbank.

Agnico’s shares fell 2.5% to C$93.81 as of 9:45 a.m. in Toronto, while TMAC gained 39% to C$2.18.

Last month, Prime Minister Justin Trudeau’s government rejected the Shandong acquisition, which had been the subject of a security review under the Investment Canada Act. The Chinese company said at the time the government’s decision was made “for the purpose of safeguarding national security.”

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