Attention tonight among Australian investors will be on the board of Canada’s Noront Resources to see what the reaction the sharp rise in the offer price from Andrew Forrest’s Wyloo Metals.
Wyloo and BHP have been battling each other for control of Noront which controls highly prospective ground in the so-called emerging Ring of Fire nickel, copper and gold province of Northwestern Ontario.
BHP revealed on Monday morning that talks with Wyloo over the bidding war had collapsed and been ended – a few hours later Wyloo revealed plans to boost its offer price 47% and leapfrog BHP’s 75 cents Canadian offer with a $C1.10 a share pitch.
The higher price values Noront at $C616.9 million ($US485.25 million), 57% higher than its prior bid.
With a stake of 37.2% in Noront, Wyloo said it does not intend on supporting any other offer and that “a competing take-over bid will be unlikely to meet any minimum tender condition.”
For now, BHP’s offer has the support of the Noront board and requires minimum acceptances of 50%. That could change tonight.
Following months of competing bids, Wyloo had been discussing about supporting the offer by BHP.
At the heart of the tussle was Noront’s Eagle Nest prospect in Canada’s so-called Ring of Fire, a high-grade deposit of the metal, as well as copper, platinum, a bit of gold and palladium.
Noront also owns the Blackbird, Black Thor and Big Daddy chromite deposits in the Ring of Fire region.
Wyloo Metals is a subsidiary of Forrest’s private investment vehicle Tattarang and has been building its stake in Noront for a year.
“Wyloo Metals is confident that, after considering the Revised Wyloo Offer, the Noront Board will agree that the terms of the Revised Wyloo Offer are clearly financially superior and also provide greater optionality to Noront’s shareholders than the takeover bid proposed by BHP,” it said in a statement.
BHP is urging Noront shareholders to accept its all cash offer, that needs the support of 50% of non-BHP shareholders, by mid-January.
Noront’s Eagles Nest is a similar prospect to the rapidly emerging Julimar deposits of Chalice Mining near Perth.
Julimar is better placed to develop quickly with close access to everything a developer needs. Northwestern Ontario is still a mining frontier, subject to winter conditions and higher costs.
