The company’s offer is a 27% premium to the C$0.55 ($0.44) offered by BHP, which values 100% of Noront Resources at C$325m ($257.83m)

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Wyloo Metals sweetens bid for takeover of Noront Resources. (Credit: Khusen Rustamov from Pixabay)

Wyloo Metals has proposed to takeover Canada-based Noront Resources by acquiring the remaining shares it previously didn’t own in the latter for C$0.7 ($0.56) per share in cash.

The Australian mining company already holds a stake of 37.5% in Noront Resources through its fully-owned subsidiary Wyloo Canada.

Wyloo Metals’ offer is a 27% premium to the C$0.55 ($0.44) offered by mining major BHP, which values 100% of Noront Resources at C$325m ($257.83m). Last month, Wyloo Metals said that it does not support BHP’s offer and will not tender its shares in the Canadian miner.

In May 2021, Wyloo Metals had offered C$0.315 ($0.25) per share for the takeover, valuing 100% of Noront Resources at C$133m ($105.51m).

Noront Resources is primarily focused on developing Eagle’s Nest nickel, copper, and palladium deposit in the Ring of Fire region in Northern Ontario, Canada.

Wyloo Metals head Luca Giacovazzi said: “In April this year, we were deeply concerned when the Noront Board proposed to farm out Noront’s exploration projects to BHP for only C$25m.

“Rather than consenting to such a transaction, we decided to make an offer to acquire the Company. Our fears were justified when the Noront Board completed a deeply discounted 5% placement to BHP, giving away a strategic toehold in the Company to an obvious suitor.”

Responding to the latest offer from Wyloo Metals, the Canadian miner said that the publicly-announced interest in the company is not an offer but a non-binding proposal to its board of directors.

Furthermore, the proposal is subject to completion of due diligence by the Australian firm along with negotiation and signing of a definitive arrangement agreement.

The Canadian miner said that Wyloo Metals hasn’t yet made a formal offer to its shareholders, and that there can be no assurance that a deal will materialise from the proposal.

Noront Resources CEO Alan Coutts said: “With BHP’s consent, Noront intends to provide Wyloo with a confidentiality agreement in the same form as Noront’s confidentiality agreement with BHP, but without the customary standstill provision.

“This will allow Wyloo to complete the due diligence that Wyloo claims is required, and to decide whether or not to make a binding offer to acquire the common shares of Noront that Wyloo does not already own.”

On the other hand, BHP said that Wyloo Metals’ proposal is uncertain and conditional and that its offer is the only transaction available as of now for Noront Resources’ shareholders.