THUNDER BAY — Shareholders of Ring of Fire proponent Noront Resources are to vote no later than March 31 on a proposed agreement that will see an Australian investment firm take control of the company.
In an update last week about its agreement reached with Wyloo Metals, Toronto-based Noront said it expects the arrangement to be finalized before the end of the first business quarter of 2022.
“Under the arrangement agreement, shareholders of Noront will be given an option of remaining as a shareholder of Noront following the completion of the arrangement, or receiving a cash consideration of $1.10 per common share for some or all of their common shares,” a Noront news release said.
Noront holds what are believed to be substantial deposits of nickel, copper and chromite in the Ring of Fire, located about 550 kilometres northeast of Thunder Bay.
After a prolonged bidding war for control of Noront, Wyloo competitor BHP announced on Dec. 21 it would not match Wyloo’s upped offer of $1.10 per share. BHP, also of Australia, had earlier offered 75 cents per share.
Prior to the competition between the two industry heavyweights, Wyloo had already owned just over 37 per cent of Noront’s outstanding common shares.
In the wake of Wyloo’s victory, company chief executive Luca Giacovazzi said development in the Ring of Fire “will require patience, determination and respectful consultation with First Nation communities, federal and provincial governments, and regional stakeholders.”
Giacovazzi added: “We look forward to the work ahead of us.”
A backgrounder about Wyloo, which is headquartered in Perth, says the company “seeks to work closely with all stakeholders to accelerate projects through the development cycle while meeting the highest international environmental, social and governance standards.”
For several years prior to its discussions with Wyloo and BHP, Noront had sketched out a proposal to develop the first nickel mine in the Ring of Fire, with plans to ship chromite ore by truck and rail to a future smelter in Sault Ste. Marie.
The plans are largely dependent on the construction of all-weather road access into the remote Ring of Fire region.
Of the agreement reached with Wyloo, Noront chief executive Alan Coutts declared it “a great outcome for the shareholders of Noront following a lengthy process.”
According to the Noront news release, Wyloo’s offer of $1.10 per share represents “an approximate 47 per cent premium to the cash offer of 75 cents per common share made by BHP on Oct. 19.”
Under the terms of the agreement, “Wyloo has provided a loan to Noront of up to $29.38 million to finance, among other things, the termination payment of $17.78 million, which has been paid to BHP, as well as other transaction-related costs,” the news release added.
Carl Clutchey, Local Journalism Initiative Reporter, The Chronicle-Journal