The board of directors of Noront Resources is backing a takeover bid from a second Australian mining company.
BHP Lonsdale, a wholly-owned subsidiary of BHP, is making an offer of 55 cents a share to take ownership of the Toronto-based mining company. Noront wants to develop the Ring of Fire in northwestern Ontario. The company plans to develop a ferrochrome smelter in Sault Ste. Marie.
The offer is nearly a 70 per cent premium for Noront’s shares that closed at 32 cents on Monday.
Noront’s board, senior management and a major shareholder who hold about 10 per cent of the company’s shares have agreed to tender their shares.
“With proven expertise and capabilities in both exploration and bringing complex base metals projects into production, the BHP group is well-positioned to advance Noront’s Ring of Fire projects through the next stages of development,” a release says.
Noront CEO Alan Coutts says BHP’s offer “is in the best interests of the company and shareholders.
“BHP has the financial strength, world-class mining expertise, and commitment to work in partnership with stakeholders to advance Eagle’s Nest and the Ring of Fire, which has the potential to deliver benefits to local communities, First Nations and, and Ontario for years to come.”
Another Australian mining company, Wyloo Metals, announced in late May its plans to make an unsolicited bid for the Noront shares it did not already own. The offer valued Noront at $133 million. Wyloo was offering 31.5 cents a share. Noront’s shares have ranged from 15 cents to 38 cents during the past 52 weeks.
Holders of more than 50 per cent of Noront’s shares, not including the 21.7 million shares currently held by BHP Lonsdale, must agree to the sale.
Shareholders will soon be mailed information about the takeover bid.