Ring of Fire takeover target Noront Resources announced it has entered into a binding agreement with Australian mining upstart Wyloo Metals to take over the junior mining company and its prized Far North mineral assets in a deal valued at $616.9 million.
Wyloo, Noront's majority shareholder at 37 per cent, will be acquiring all of the Noront common shares it does not currently own.
The six-month-long bidding for Noront and its rich Eagle's Nest deposit in the James Bay region ended abruptly this week when BHP, the world's largest mining company, choose not to match or beat Wyloo Metals' latest offer of C$1.10 per common share.
Shareholders of Noront will vote on the transaction at a special meeting on March 31.
Wyloo said it's providing Noront with a $29-million loan to cut ties with BHP by financing a termination payment of $17.78 million to BHP along with other transaction-related costs.
With the air now cleared, Noront CEO Alan Coutts weighed on how pleased he was with the agreement with Wyloo.
"The offer price of C$1.10 per share represents a significant premium to the unaffected price of Noront's common shares and the improved BHP offer, and a great outcome for the shareholders of Noront following a lengthy process," said Coutts in a news release. "Noront's board of directors and management wish to thank shareholders for their support and patience over the last several months."
Wyloo's chief executive Luca Giacovazzi expressed similar sentiments.
"We are very pleased to have reached an agreement with Noront that provides shareholders with an opportunity to crystallise real and immediate value, alongside an option to participate in the company's future. The journey to realise the full potential of the Ring of Fire will require patience, determination and respectful consultation with First Nation communities, federal and provincial governments, and regional stakeholders. We look forward to the work ahead of us."
Wyloo Metals is one of Australia's largest private investment groups, owned by Andrew Forrest.
Noront's high-grade Eagle's Nest nickel, copper, platinum and palladium deposit and its Blackbird, Black Thor, and Big Daddy chromite are located in the James Bay lowlands, some 500 kilometres northeast of Thunder Bay.