Pursuit of Noront heats up

THUNDER BAY — The two Australian companies eyeing control of nickel and chromite deposits in the remote Ring of Fire mineral belt have been unable to come to an agreement for the potential takeover of the Toronto-based miner that’s been driving the project for many years. 

Melbourne-based mining, oil and gas giant BHP, along with its competitor, investment firm Wyloo Metals, of Perth, announced in separate news releases on Sunday that talks regarding the takeover of Noront Resources did not result in a deal agreeable to both companies. 

The purpose of the discussions, which have taken place over several weeks, was to try to find a way that Wyloo Metals — a major Noront shareholder — could support BHP’s proposed takeover of Noront at 75 cents per share. 

“The parties have determined that they are unable to reach an agreement,” a BHP news release said. 

Following that development, BHP said its offer of 75 cents per share remains on the table, and encouraged those with Noront shares to take it by a Jan. 14 deadline. BHP maintains that Noront’s board of directors continues to support its offer. 

Apparently not to be outdone, Wyloo, which owns more than a third of Noront, issued its own news release arguing that its upped offer of $1.10 per share is superior to BHP’s both in terms of the amount, and Noront’s long-term future. 

Wyloo’s considerably increased offer — it earlier offered 70 cents per share — would apply to “100 per cent of the shares in Noront that it does not already own,” said Wyloo’s news release. 

“Importantly, the revised Wyloo offer continues to provide those shareholders who believe in the long-term potential of Noront with the opportunity to participate in Noront’s continued growth by remaining as shareholders,” the Wyloo release said. 

Wyloo added: “Without the support of Wyloo Metals’ 37.2 per cent direct interest in Noront . . . a competing takeover bid will be unlikely to meet any minimum tender condition.” 

About a year ago, Wyloo announced a plan to become a “cornerstone” investor in Noront by acquiring 94 million common shares, as well as a US$15 million loan then held by Denver-based investment firm Resource Capital Fund. 

Wyloo followed that up with a proposal to purchase all of Noront’s common shares, a move some industry observers at the time applauded because Wyloo appeared to have the deep pockets to advance Noront’s Ring of Fire projects located 550 kilometres northeast of Thunder Bay. 

At the time, Noront appeared caught off-guard by Wyloo’s plans, cautioning its shareholders “that the (Wyloo) announcement does not constitute an offer, and no offer may ever actually be made.” 

In July, BHP got involved, offering to take over Noront at a price of 55 cents per share. BHP later increased its offer to 75 cents.