Noront Resources finalizes Ring of Fire chromite purchase
A Quebec Superior Court has granted approval for Noront Resources to finalize its acquisition of the Ring of Fire chromite properties from Cliffs Naturals Resources for a new purchase price of US $27.5 million.
After Noront announced on March 23 that it had reached an agreement to buy the properties for US $20 million, a rival offer caused Cliffs to reopen the bidding. Both parties filed their revised offer on April 15.
Noront reported April 28 that its amended offer has been accepted by Cliffs and a new share purchase deal has been struck. The transaction closed prior to the market opening on April 28.
“We feel $27.5 million is an attractive price for the acquisition of these strategic assets, which alongside our Eagle’s Nest nickel-copper-platinum group element deposit and our Blackbird chromite deposit will allow us to further our vision of becoming the leading resource company in the Ring of Fire,” said Noront president and CEO Alan Coutts. “Our next step is to have meaningful dialogue with the local First Nations and government regarding the development of these chromite assets which represent a generational opportunity.”
Noront picks up 103 claims, including the Black Thor and Black Label chromite deposits, a 70 per cent interest in the Big Daddy chromite deposit, and an 85 per cent stake in the McFauld’s Lake copper zinc resource. The company holds about 65 per cent (80,000 hectares) of the isolated mining camp in the James Bay region.
To finance the transaction, Noront returned to its backer, Franco-Nevada, for an amended loan of US$25 million for a five-year period at 7 per cent interest.
In return, Franco-Nevada receives a 3 per cent royalty over Black Thor and a 2 per cent royalty over the rest of the properties, except for Eagle’s Nest, Noront’s wholly-owned nickel, copper and base metal deposit. Noront also receives $3.5 million from Franco-Nevada as part of the royalty agreement and acquires Cliffs’ interest in KWG Resources, giving it 13.8 per cent of KWG’s issued and outstanding common shares.