TMAC Resources, which is currently developing the Hope Bay gold project in Canada’s far north, has begun paperwork on an initial public offering and plans to list on the Toronto Stock Exchange soon, a person familiar with the matter said on Friday.
The offering would be the first pure IPO on the TSX in over a year, as the pullback in metal prices has sharply dented investor confidence in the mining industry and led to a major slowdown in new mining listings on the resource-heavy TSX and TSX Venture Exchange.
TMAC, which has privately raised over $157 million since it was formed in 2012, is largely owned by U.S. mining-focused private equity firm Resource Capital Funds (RCF) and gold miner Newmont Mining, which sold the Hope Bay project in Nunavut to TMAC in 2013.
RCF owns a 39.5 percent stake in TMAC, while Newmont controls a 37.8 percent stake.
TMAC is expected to file its paperwork around the offering, which is being led by BMO Capital Markets and CIBC, very soon, said the source, who asked not to be named.
BMO and CIBC declined to comment on the matter. TMAC was not immediately reachable for comment.
Earlier on Friday, The Wall Street Journal, citing sources familiar with the matter, reported that TMAC will look to raise over $100 million through the IPO. It said the offering will be backed by a syndicate that also includes Dundee Capital Markets, Toronto-Dominion Bank, GMP Capital Inc, Scotiabank and National Bank Financial.
(Update: Following this report, TMAC filed a preliminary prospectus on SEDAR that indicates it is seeking gross IPO proceeds of $105 million.)
The Hope Bay project is one of the most advanced gold assets in Canada and was originally owned by mining giant BHP Billiton before the turn of the century. Newmont went on to acquire the asset and spent over $800 million on the project before mothballing it, due to debt woes and a slump in the price of gold.
TMAC has revived the project, altered the scope of the mine plan and aims to have the mine in production by late 2016.
The exploration company is led by a team of veteran mining hands from erstwhile Canadian base metal miner FNX, which went on to merge with Quadra Mining in 2010. The merged entity Quadra FNX was later acquired by Polish miner KGHM for roughly $3 billion in 2012.
TMAC completed a pre-feasibility study last month that laid out the costs and scope of the project.
(Reporting by Euan Rocha; Editing by Leslie Adler)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)