Noah Zivitz

Managing Editor, BNN Bloomberg

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Agnico Eagle Mines Ltd. has swept in as TMAC Resources Inc.’s new takeover partner just a few weeks after that miner’s proposed sale to China’s Shandong Gold Mining Co. was blocked by the federal government.

Under the terms of the agreement announced Tuesday, Agnico will buy TMAC for $2.20 per share, compared to the $1.75 that Shandong had agreed to pay. As well, TMAC and Agnico said their arrangement will be implemented without requiring a new meeting of shareholders, who had previously voted 97.08 per cent in favour of the Shandong deal.

“It was the right time, with the right opportunity, in the right place, at the right price. It was a deal that we really wanted to get done,” said Sean Boyd, Agnico Eagle’s vice-chairman and chief executive officer, in an interview Tuesday.

When TMAC revealed last May that it agreed to be purchased by Shandong, it was framed as an opportunity to bring the necessary financial heft to fully develop TMAC’s sprawling Hope Bay gold mine property in Nunavut.

However, it sparked some concern about China’s access to key metals and its presence in Canada’s far north, and ultimately was blocked by the government in late December.

Now, TMAC is turning to an experienced operator in Nunavut, given Agnico’s ownership of the Meadowbank and Meliadine gold mines in the northern Canadian territory. And Boyd made it clear he’s eager to expand drilling at Hope Bay because Agnico thinks "there’s a lot more gold" to be explored.

“The acquisition being completed by Agnico Eagle is a great outcome for all stakeholders,” said TMAC President and Chief Executive Officer Jason Neal in a release. “Agnico Eagle is one of the strongest gold producers internationally, a Canadian champion and has been operating in Nunavut for more than a decade with a great track record with communities, employees and the environment.”

While a shareholder vote won’t be necessary, TMAC said it is planning to seek court approval for the transaction on Jan. 20. According to the release Tuesday, shareholders owning 62.3 per cent of TMAC’s outstanding shares – including Shandong and Newmont Corp. – have agreed to cooperate on closing the deal with Agnico, including by not seeking out any competing bids.

“This could actually close before the end of January,” said Boyd. “It’s important from a timing perspective, and this was a consideration because the longer you wait in Nunavut, you run into your barge season. You've got to start planning now. It was important for us to be able to get in, and start to make some critical decisions on ordering key supplies and materials this summer.”

Trinity Advisors Corp. and First Asia Group Ltd. are serving as Agnico’s financial advisors on the deal. BMO Capital Markets and CIBC Capital Markets are advising TMAC.