Wyloo Metals has tabled a "superior" offer over BHP's in the bidding war to acquire Ring of Fire junior miner Noront Resources.
Wyloo, a Western Australian-based mine developer, announced it has reached an agreement with the Toronto company to acquire its nickel, copper, platinum group metals and chromite assets in the James Bay region.
In an Oct. 18 news release, Noront's board of directors unanimously determined Wyloo's latest offer $0.70 per share to be a "superior proposal" to the $0.55 per share offer made by BHP through a subsidiary company.
Noront has roughly 560,000,000 shares outstanding which puts the value of the deal at approximately $391 million. When factoring in the value of Noront's debt, the enterprise value is $463 million.
Wyloo Metals, which currently holds approximately 37.25 per cent of the Noront common shares, is out to acquire all of the common shares of Noront.
“Based on an evaluation by the special committee and its advisors, the Noront Board of Directors has determined that Wyloo Metals’ proposal represents superior value for our shareholders, compared to the offer by BHP," said Noront CEO Alan Coutts in a statement.
BHP has five business days to match Wyloo’s offer.
Noront said Wyloo's offer of $0.70 in cash per share under the Wyloo Offer represents a 192 per cent premium to Noront’s closing price on May 21 and a 27 per cent premium to the BHP Western Mining Resources International Pty offer of 0.55 per share offer.
Wyloo is a subsidiary of Tattarang, one of Australia’s largest private investment companies, led by mining magnate Andrew Forrest.
Wyloo wants to develop the Ring of Fire as a "world-class Future Metals Hub" and install a new board of directors, led by Forrest and comprised of "some of the world's most experienced mining leaders who are committed to deliver Noront's true potential to its shareholders."
In a release, Wyloo said Forrest has an "unparalled track record in the development of remote mining projects and a proud and continuing legacy of partnering with Indigenous and local communities."
Forrest is the former CEO of Fortescue Metals; the fourth largest iron ore producer in the world, after BHP, Rio Tinto and Vale; operating in the Pilbara region of Western Australia.
"The Ring of Fire is a long-term mining district with a present-day value that is impossible to accurately quantify," said Wyloo chief executive Luca Giacovazzi in a statement.
"Only the Wyloo offer can provide Noront shareholders with comfort in the knowledge that they have received sufficient optionality and value for their ownership of Canada’s next great mineral hub."
Noront said no action is to be taken today by its shareholders. "If Noront enters into the arrangement agreement with Wyloo Metals, additional information will be provided to Noront shareholders in advance of a special meeting of shareholders to vote on the plan of arrangement."
The flagship project of Noront is the highly coveted Eagle’s Nest nickel, copper, platinum and palladium deposit, a high-grade discovery in a remote region of Northern Ontario. Noront's 84,000-hectare exploration holdings in the James Bay region also includes three high-grade chromite deposits, an essential metal used in the manufacturing of stainless steel.
