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BHP backs out of Ring of Fire bidding war

World's largest mining company will not match Wyloo's offer for Noront Resources
Noront drilling
(Noront photo)

After evaluating the value of Noront and its promising Eagle's Nest deposit in the Ring of Fire, BHP will not match Wyloo Metal's $1.10 per common share offer, thus ending the bidding war which began last summer.

This clears the path for Wyloo to acquire Toronto junior miner Noront Resources. Wyloo came aboard late last year as Noront's largest shareholder, currently at 37 per cent, began its acquisition bid to control Noront last May.

Noront is the leading mine developer in the James Bay region with multiple untapped nickel, copper and chromite deposits and resources, a remote area of the province where no permanent roads exist.

"BHP is committed to its strict capital discipline framework," said Johan van Jaarsveld, BHP's chief development officer, in a news release.

"While the Eagle's Nest deposit is a promising resource, we do not see adequate long-term value for BHP shareholders to support an increase in BHP's offer in order to match the C$1.10 per share proposal from Wyloo Metals Pty Ltd."

The Noront board of directors has indicated that Wyloo's latest offer is the "superior proposal."

BHP had five business days, starting today, to match Wyloo's offer.

Talks initiated by BHP to reach a deal with Wyloo to acquire Noront broke off earlier this month, followed immediately by an improved offer from Wyloo - by 47 per cent - for Noront.

Earlier this year, BHP moved its global nickel and copper exploration office to Toronto because of the demand for these metals in the coming electrical vehicle boom, in smart phones and computers.