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Australians look to go all-in on the Ring of Fire

Wyloo Metals makes take-over bid for Noront Resources
Noront Resources Esker camp aerial (June 2020)
(Noront Resources photo)

Noront Resources largest shareholder, Australia's Wyloo Metals, intends to make a bid to acquire the Ring of Fire mine developer.

Perth, Australia-headquartered Wyloo Metals announced May 25 that it intends to make an offer to acquire all of the outstanding common shares in Noront that it does not currently own in a proposed $133-million deal.

Privately-held Wyloo made its initial buy-in last December, through a subsidiary company, Wyloo Canada Holdings, taking a 37 per cent stake of Noront's common shares and convertible debt.

Wyloo is owned by Australian mining and green energy billionaire Andrew Forrest and his privately-held investment company Tattarang. 

Wyloo succeeded Resources Capital Fund as Noront's biggest shareholder.

The Australian company invests in mines and exploration projects mostly in nickel, copper, platinum group metals and potash in Western Australia. This was their first investment in a North American exploration project. Wyloo has a keen interest in projects related to battery-related metal commodities.

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The Ring of Fire is a multi-commodity, greenfield mineral belt in the remote James Bay region in Northern Ontario, characterized by its world-class discoveries of high-grade nickel, chromite and a slew of other commodities that could last for decades.

But there have been chronic delays over the years in extending road access infrastructure into the Far North to reach these stranded deposits due to the inability of both the federal and provincial government in securing region-wide consensus among some First Nation communities.

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This is born out in Noront's most recent investor relation presentation which pushes out the start of the commercial production date on its first mine, the Eagle's Nest nickel deposit, by one year to mid-2026.

In a May 25 news release, Wyloo said its offer "crystallizes full and certain value for Noront shareholders while removing their exposure to the uncertainty of several further years of infrastructure and mine development associated with the Ring of Fire assets."

A take-over bid circular is being sent to Noront shareholders.

In response, Noront cautions its shareholders defer from taking any action, calling this an "unsolicited offer" by a corporate insider and that no formal proposal has been made. A special committee of three Noront directors has been struck to to put a proper valuation on their assets and will advise shareholders on alternatives. 

Noront said once the official proposal is made, shareholders will have a 105 days to respond to the offer.

On the development front, environmental assessments (EAs) are underway on the proposed network of community and industrial access roads to the Ring of Fire. Scheduled completion of the EA's are now pegged by the end of 2023, immediately followed by a 30 to 36-month construction period of the roads slated to start at the beginning of 2024.

In Noront's mine development plan, Eagle's Nest would be the first proposed mine to go into production in 2026 - Canada's highest-grade nickel discovery since Voisey's Bay - followed by a succession of four high-grade chromite deposits in the years that would feed a ferrochrome production proposed for Sault Ste. Marie. As the leading mine developer in this region, Noront has also made promise discoveries of gold, zinc, iron, titanium, vanadium and silver.