BHP to acquire Noront Resources Limited

Yesterday, BHP Lonsdale Investments Pty Ltd (BHP Lonsdale), a wholly-owned subsidiary of BHP Group Limited, announced that BHP Western Mining Resources International Pty Ltd (BHP WMR), a wholly-owned subsidiary of BHP Lonsdale, has made a recommended all-cash offer to acquire all of the issued and outstanding common shares of Noront Resources Limited (Noront) for C$0.55 per share in cash.

BHP Lonsdale, BHP WMR and Noront have entered into a definitive support agreement, whereby Noront has agreed to, among other things, support the takeover-bid by BHP WMR.

Noront is a Canadian based mining company, listed on the TSX Venture Exchange. It is focused on the development of its high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and chromite deposits including Blackbird, Black Thor, and Big Daddy, all of which are located in the James Bay Lowlands of Ontario in an emerging metals district known as the Ring of Fire.

BHP Lonsdale owns 3.7% of the Noront shares on a fully diluted basis. The total equity value of the transaction is C$325 million (based on 100% of the fully diluted shares outstanding). The members of the Board of Directors of Noront who voted on the matter unanimously recommend that Noront shareholders tender their shares to accept the Offer.

The cash consideration of C$0.55 per share represents a premium of 129% to Noront’s unaffected closing price of C$0.24 on May 21, 2021, the last trading day prior to the date that Wyloo Metals Pty Ltd. (“Wyloo”) first publicly announced its intention to make an offer for Noront, and a 69% premium to Noront’s closing price of C$0.325 on July 26, 2021, the last trading day prior to the announcement of this transaction. In addition, the C$0.55 per share Offer price is C$0.235 per share, or 75%, higher than the C$0.315 per share proposed by Wyloo in its announcement on May 25, 2021.

Noront CEO, Alan Coutts: “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 Chief Development Officer, Johan van Jaarsveld: “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. For BHP, the acquisition of Noront presents a world-class growth option, in a key future-facing commodity. The highly prospective Eagle’s Nest nickel project provides an excellent platform from which to develop further opportunities in Ontario’s Ring of Fire. For Noront shareholders, this offer recognizes and realizes the full value of Noront’s portfolio, delivering guaranteed shareholder returns in the near term. We are excited to bring our mining expertise and capabilities to develop these long-term opportunities. We look forward to working in constructive partnerships with First Nations peoples, government and communities to realize the untapped potential of these important resources.”

Leave a Reply

Your email address will not be published. Required fields are marked *