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The Canadian government has rejected Shandong Gold Mining’s bid to acquire TMAC Resources, the companies said on Tuesday.

In a filing to the Shanghai Stock Exchange on Tuesday, Shandong Gold said it had received notice of a decision made by Canadian authorities on December 18, based on the Investment Canada Act.

Shandong had agreed to buy the company for about $150 million in May, but in October TMAC said it had received notice that the Canadian government had ordered a national security review.

TMAC’s shares fell as much as 16% to C$1.09 on Tuesday as investors worried about its ability to repay debt. The miner said on November 5 it had about C$99 million in cash on hand, short of the C$169.7 million due in June.

“TMAC is likely to be forced into a messy refinancing which could ultimately hurt shareholders,” Laurentian Bank analyst Barry Allan told Reuters.

“While we are disappointed with the outcome, we are very pleased that TMAC achieved significant operation improvements at Hope Bay. We will continue to build on these improvements while considering options to manage our balance sheet,” said Jason Neal, President and CEO of TMAC.

“Given our September 30, 2020 unrestricted cash balance of C$71.5 million and current positive cash flow being generated, we expect to have sufficient cash on hand to fund the 2021 sealift, but not to fully repay maturing debt recently extended to June 30, 2021.”

TMAC owns the Doris gold mine, the only operating asset in Hope Bay, Nunavut. The mine began commercial production in 2017 and had proven and probable mineral reserves totalling around 3.54 million ounces of gold at the end of 2019.

The miner is in the early stages of developing a second underground mine at Hope Bay — Madrid North. It has also concluded a prefeasibility study on a production expansion at the Hope Bay property.

TMAC’s biggest shareholders include Newmont, and Resource Capital Funds.

China relations

Canada last blocked a proposed C$1.51 billion takeover of construction company Aecon by China Communications Construction Co. Ltd, also on national security grounds, in May 2018.

Canada-China relations have been frayed since December 2018, when Huawei Technologies Co.’s chief financial officer, Meng Wanzhou, was detained in Vancouver at the request of the US, where she’s charged with fraud. She has been confined to the city since then.

Following her arrest, China jailed two Canadians — Michael Spavor and Michael Kovrig — on espionage charges and halted billions of dollars in Canadian imports.

“There were concerns about a Chinese state-owned enterprise taking over a mine in the far north and it was ultimately rejected,” an Ottawa source familiar with the TMAC negotiation review told Reuters.

Prime Minister Justin Trudeau has faced pressure to toughen the country’s stance on China.