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Hope Bay fundraising now $135M
TMAC raises number of shares available for gold mine project due to strong demand

Karen K. Ho
Northern News Services
Saturday, July 4, 2015

HOPE BAY
Development company TMAC Resources has increased the number of shares available for its initial public offering, now totalling about $135 million, due to higher than expected demand.

The funds raised from the sale of the 22.5 million shares will go toward its Hope Bay gold mine project located 170 km southwest of Cambridge Bay.

NNSL photo/graphic

Paul Christman, TMAC Mining Engineer, surveying for a new drift into a future test stop location at Doris Mine. The company recently increased its initial public offering, which is now valued at more than $135 million after its pre-feasibility study said the mine now has an expected life of 20 years.

The executive director of the NWT and Nunavut Chamber of Mines, Tom Hoefer, told News/North this amount of interest is due to TMAC's proven track record.

"People were excited when (it) came and had a look at Hope Bay and said yeah, we can really do something with this," he said. "That was a real vote of confidence for the project."

On June 29, TMAC announced it had filed the final document for its first public offering of shares. Citing strong demand, the company will now offer 22.5 million common shares at $6 each for a total of $135 million. Its pre-feasibility study stated an updated mine-life estimate of 20 years and yield of 3.2 million ounces of gold reserves.

TMAC has also granted the underwriting companies over-allotment option. Underwriting companies are responsible for overseeing the distribution of TMAC's initial public offering of a little less than 3.4 million additional common shares.

The over-allotment option allows the financial institutions to issue up to 15 per cent more shares. With this option, companies can take advantage when demand for their shares is high and also raise more capital.

The company has said it will use the funds raised from the sale of the 22.5 million shares to advance the Hope Bay project, other exploration activities and general corporate purposes. The offering is expected to close on or about July 7.

"We are already six months into our two-year 'Path to Production' plan for the Hope Bay Project," TMAC's chief executive officer Catharine Farrow said in a news release. "Completion of the offering by early July will help to significantly de-risk the Hope Bay Project and allow us to work toward planned first production by the end of 2016."

With TMAC being able to raise up to $155 million in its initial public offering with the over-allotment option as well as its plans for production to take place by the end of next year, Hoefer said the project is another signal that mining can take place in the territory.

"It's a sign it can be done, if you've got the knowledge, the courage and an open mind," he said.

Hoefer said the amount TMAC is expected to raise isn't that large due to the historically high costs of building mines in the territory.

"If you build a diamond mine here you're pushing $800 million to over a billion (dollars)."

Hoefer also pointed out that before TMAC took over the Hope Bay project, it already had more than $1.5 billion invested into its acquisition and work done on the site by previous owners Newmont Mining.

"There's already a lot of money that's under the bridge without having a mine," he said.

In fact, before Newmont had put Hope Bay into care and maintenance status in early 2012, the company had invested approximately $2 billion in the project, including the initial price tag of approximately $1.5 billion. In 2013, TMAC acquired Hope Bay from Newmont for $50 million.

TMAC's offering of its common shares is being made through a syndicate of underwriters led by BMO Capital Markets and CIBC. The group of underwriters also includes Dundee Securities Ltd., GMP Securities L.P., National Bank Financial Inc., Scotia Capital Inc. and TD Securities Inc.

Both TMAC Resources' chairman, Terry MacGibbon, and Farrow were unavailable for further comment.

Monica Ell, minister responsible for mines, was unable for comment by press time.

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