TMAC Resources Signs Definitive Acquisition Agreement to Acquire 100% of Newmont’s Hope Bay Property in Nunavut


(Source: TMAC Resources)

Closing will be subject to completion of TMAC Resources’ equity financing

TORONTO, January 28, 2013 – TMAC Resources Inc. (“TMAC” or “the Company”) today announced the signing of a definitive acquisition agreement (“the Acquisition Agreement”) with Hope Bay Mining Ltd., a subsidiary of Newmont Mining Corporation (NYSE: NEM) (“Newmont”) to acquire 100 % of Newmont’s Hope Bay Property located in Nunavut, Canada (please see TMAC press release dated December 17, 2012 announcing the signing of the Letter of Intent). The closing of the transaction is subject to certain conditions, including the completion of a private placement of TMAC equities (“Private Placement”) and the receipt of all required regulatory and third party approvals. The Company has initiated the financing and will be meeting with potential investors over the next several weeks.

TMAC is a privately held exploration and development company lead by former senior executives of FNX Mining Company Inc. (“FNX”). Terry MacGibbon, former CEO and Chairman of FNX and co-founder and Chairman of Torex Gold Resources Inc., is the Company’s founder and Executive Chairman.

A summary of the Acquisition Agreement’s terms include:

     The completion of the Private Placement of at least $30 million of TMAC equities

     The Company’s ownership prior to the completion of the Private Placement will be Newmont – 80% and TMAC management – 20%

     Post the Company’s Initial Public Offering, planned for mid-2013, TMAC management’s ownership in excess of 6.3% will be held in escrow until one of the following performance milestones are met: commercial production is achieved, a new significant discovery is made or the IPO capital market capitalization is doubled

     Newmont will retain a 1% NSR on future production from the Hope Bay Property but will not receive any upfront cash payments

     $300 million of tax attributes will be retained by TMAC for application against future mining production revenues generated from the Hope Bay Property

     TMAC Board will have a majority of independent directors. Newmont has the right to nominate two directors, subject to a 20% minimum ownership threshold

     TMAC management and Newmont are subject to an 18 month lock-up post the completion of the planned IPO

The Company has initiated a targeted $50 million private placement of TMAC common shares with CIBC acting as agent. Proceeds of the financing will be used to: open the Hope Bay camps; build ice landing strips; fly in underground and surface drills; initiate underground and surface drill exploration programs; transport the mill and associated equipment currently located in Durban, South Africa, Pennsylvania, USA and Lachine, Quebec to the Hope Bay site; complete a pre-feasibility study to support putting the Doris gold deposit into production and for general corporate purposes.

“We are pleased to have concluded the Acquisition Agreement as we believe that TMAC is the right partner to improve prospects for near-term development of the Hope Bay Project,” said Randy Engel, Executive Vice President, Strategic Development of Newmont. “TMAC’s management team has a proven track record of developing projects with similar characteristics, both profitably and responsibly, while maximizing value for shareholders and other stakeholders. We look forward to developing a strong, long-term partnership as a significant shareholder of TMAC."

Terry MacGibbon, Executive Chairman of TMAC, stated, "I am very excited to be working with Newmont and our Inuit partners to develop the full potential of the highly prospective Hope Bay Project. I am also very excited about reuniting and working with many of the former FNX executive team who helped make that venture such a success, including TMAC’s CEO, Catharine Farrow. By applying best practices and leveraging the TMAC team’s proven entrepreneurial approach to profitable, low cost, staged mine development supported by geoscience driven exploration, we believe the 80 km by 20 km Hope Bay Belt has great potential to be Canada’s next major gold mining camp. Our objective is to become a long-term, profitable and environmentally responsible gold producer for the benefit of all stakeholders.”

Closing of the transaction is anticipated in the first quarter of 2013. There can be no assurance that the transaction will be completed.

Advisors and Counsel

TMAC’s financial advisor is CIBC, and its legal counsel is Cassels Brock & Blackwell LLP. Newmont’s financial advisors are BMO Capital Markets and J.P. Morgan, and its legal counsel is Lawson Lundell LLP. 

About TMAC

TMAC is a privately held mining exploration and development focused company comprised of the former senior executives of FNX and headed by Terry MacGibbon, founder of FNX and Chairman of Torex Gold Resources Inc. TMAC management has an exceptional track record for developing high grade, profitable underground mines.

TMAC Resources Contact Information:

Terry MacGibbon                   Catharine Farrow
416-520-3516                          705-669-7900

Cautionary Statements

This press release is not an offer to sell, or a solicitation of an offer to purchase, any securities in the United States. The securities referred to in this press release will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the U.S. Securities Act of 1933 and applicable state securities laws.

This release contains “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws that are intended to be covered by the safe harbors created by those laws. “Forward-looking statements” or “forward-looking information” include statements that use forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “believe”, “continue”, “potential” or the negative thereof or other variations thereof or comparable terminology. Such forward-looking statements include, without limitation, statements regarding the completion of the proposed transaction and initial public offering, delivery of a pre-feasibility study that will support production, the potential of the Hope Bay Project, and timing of closing of the transaction, the private placement financing and the planned initial public offering, and other statements that are not historical facts. While such forwardlooking statements are expressed by TMAC, as stated in this release, in good faith and believed by TMAC to have a reasonable basis, they are subject to important assumptions, risks and uncertainties including, without limitation, approval of applicable governmental or regulatory authorities, the receipt of all required third party approvals, the satisfaction or waiver of certain other conditions contemplated by the Acquisition Agreement, market conditions for the initial public offering, and positive results of the pre-feasibility study. As a result of these risks and uncertainties, the proposed transaction could be modified, restructured or not be completed, and the results or events predicted in these forward-looking statements may differ materially from actual results or events. These forward-looking statements are not guarantees of future performance, given that they involve risks and uncertainties. TMAC does not undertake any obligation to release publicly revisions to any forward-looking statement, except as may be required under applicable securities laws, or to comment on expectations of, or statements made by the other party or third parties in respect of the proposed transaction. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Continued reliance on forward-looking statements is at investors' own risk. Statements with respect to the potential of the Hope Bay Project should not be interpreted to mean that an economic analysis has been completed by TMAC. No economic analysis has been completed to date.