The deal is expected to result in advancing Eagle’s Nest nickel, copper, platinum and palladium deposit in Ontario
BHP Lonsdale to acquire Noront. (Credit: Khusen Rustamov from Pixabay.)
Australian mining firm BHP, through its subsidiary BHP Lonsdale, has made an offer to acquire Canada-based Noront Resources in an all-cash deal worth C$325m ($258m).
Under the terms of the agreement, BHP Western Mining Resources, a BHP Lonsdale firm, will make an offer to acquire all the shares of Noront at a price of C$0.55 ($0.44) per share.
The acquisition price of C$0.55 ($0.44) per share indicates a premium of 69% to Noront’s closing price of C$0.32 ($0.25) on the last trading day prior to the announcement.
In May 2021, Australian mining company Wyloo Metals has announced its intension to take-over Noront at a price of C$0.31($0.25) per share.
Noront CEO Alan Coutts said: “This transaction provides a significant premium to Wyloo’s indicative offer, and crystallizes immediate and certain value through an all-cash offer.
“After careful consideration, Noront’s Board of Directors, with input from its financial and legal advisors and the Special Committee, determined this 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 Ontario for years to come.”
BHP Lonsdale owns 3.7% share in the Noront, on a fully diluted basis.
Noront is focused on the development of its high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and the chromite deposits including Blackbird, Black Thor, and Big Daddy.
The projects are located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire.
BHP said that Noront’s projects require significant funding to bring them to the production stage.
In addition, the company currently holds limited cash to fund the necessary capital projects and near-term debt maturities.
The deal is expected to result in advancing Eagle’s Nest and the Ring of Fire.
BHP chief development officer Johan van Jaarsveld said: “We are pleased that the Noront board has seen the value in our offer and has recommended it to its shareholders. This is a win-win for both BHP and Noront shareholders.
“We look forward to working in constructive partnerships with First Nations peoples, government and communities to realize the untapped potential of these important resources.”
In a separate development, London’s Court of Appeal gas agreed to reopen a $7bn lawsuit against BHP, over the collapse of the Fundao dam in Brazil in 2015, Reuters reported.
The dam is owned by a joint venture between BHP and Brazilian iron ore mining giant Vale.