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BHP counters Wyloo offer for Ring of Fire assets

Noront recommends shareholders accept improved BHP proposal
Noront esker camp fox
(Noront Resources photo)

Mining heavyweight BHP has boosted its all-cash offer for Noront Resources shareholders to $0.75 per share in its bidding war with fellow Australian miner Wyloo Metals for control of the leading metals project in the Northern Ontario's Ring of Fire region.

The BHP offer presents a 36 per cent bump-up to an earlier offer and a 7 per cent premium to Wyloo's earlier offer from this week.

Noront's board considers the BHP offer to be superior to that Wyloo's $0.70 offer and recommends Noront shareholders tender their sharess to the BHP offer. The deadline to do so is Nov. 9 at 11:59 p.m. Toronto time.

“Our increased offer of C$0.75 per share provides a compelling premium for Noront shareholders and is available to shareholders now," said BHP Chief Development Officer, Johan van Jaarsveld in a statement.

"Our offer provides shareholders with the value inherent in Noront’s portfolio of projects, including the Eagle’s Nest project, delivering shareholders who accept our offer certainty of value and immediate liquidity.”

Both Wyloo and BHP are pursuing control of the Noront's unmined metal assets in the remote Ring of Fire area of the James Bay region, about 500 kilometres by air from Thunder Bay. The prize is Noront's mining-ready Eagle's Nest nickel, copper, platinum group metals assets.

“Now is the time for shareholders to decide if they want to tender to our improved offer and crystallize the compelling and full value it represents," added van Jaarsveld.

In a statement, BHP said it "recognizes that delivering Noront’s portfolio of projects in the Ring of Fire is expected to take many years, require significant capital investment, development of remote infrastructure, and management of numerous stakeholders. There is no certainty that shareholders remaining invested in Noront will ever realize the value for their shares offered by BHP in cash today."

The two companies said the revised BHP offer provides Noront shareholders with the "value inherent" in Noront's stable of untapped projects "without the long-term risks associated with the development and execution of those projects."

“This transaction provides a premium to Wyloo’s offer, and delivers certainty of value to Noront shareholders via an all-cash offer," replied Noront CEO Alan Coutts. "Noront’s Board of Directors determined that BHP’s improved offer is in the best interests of the company and its shareholders and recommends Noront shareholders tender their shares to the BHP offer.”

Though Wyloo is a 37 per cent shareholder in Noront, both BHP and Noront insist this latest BHP offer doesn't require Wyloo's support to be successful.

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