By Dave Sebastian

Agnico Eagle Mines Ltd. is buying TMAC Resources Inc. for 286.6 million Canadian dollars (US$225 million), after the Canadian government last month blocked the Chinese state-owned Shandong Gold Mining Co. from buying the company.

The purchase price, at C$2.20 a share, is about 26% higher than the C$1.75 a share Shandong would have paid. Agnico Eagle will retire TMAC's outstanding debt and deferred interest and fees after the transaction is expected to close by Feb. 8, the companies said Tuesday.

Shandong, one of the world's largest gold-mining companies, would have gained access to TMAC's mine almost 120 miles north of the Arctic Circle if it had acquired the company. But former Canadian national security and military officials came out against the deal. They argued that it would give China too much access to the Arctic, a sensitive region where China has been investing because of its growing importance as a shipping route and a source of valuable minerals.

"Our company spent almost the entirety of 2020 under the uncertainty of a strategic review process and the Canadian government review of the sale to Shandong, with an impending debt maturity, compounded by the anxiety of the global pandemic," said Jason Neal, president and chief executive of TMAC.

Resource Capital Funds, Newmont Corp., Shandong and all directors and officers of TMAC, collectively holding about 62.3% of outstanding TMAC shares, have agreed not to solicit competing transactions, Agnico Eagle and TMAC said.

TMAC will seek approval for the transaction at a hearing before the Ontario Superior Court of Justice on Jan. 20, it said.

The December decision to block TMAC's acquisition by Shandong was the second time Canadian Prime Minister Justin Trudeau has vetoed a China-led deal since coming to power in late 2015, partly backtracking on his Liberal administration's initial policy goal of developing closer economic ties with China.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

01-05-21 0658ET