Noront Resources Ltd. (NOT-V) : Cliffs Natural Resources Bid for Freewest Legitimizes McFauld's Chromite District

Cliffs' all-share $0.55/sh bid values Freewest's chromite at $118mm.
Values FWR's Black Thor, Black Label & 50% of Big Daddy chromite at $118mm; validates our $150mm valuation of NOT's Blackbird.

Bid could spur further M&A in the Ring of Fire chromite camp.
Early days, but increased potential of low-cost production from the Ring of Fire could force power-challenged South African producers into action.

Potential development by Cliffs could ease Noront's operating costs.
Potential to share regional infrastructure developed by Cliffs could help ease Noront's future operating costs - trucking versus hoverbarging.

Maintain Buy rating; increasing target to $2.80 from $2.50.
Target based on a 0.85x multiple of NAV10% of $3.31/sh ($3.17/sh old). See up to $4/sh by selling chromite/PGM stream & exploration success.