An Australian slug fest appears to be shaping up in a contest to acquire Noront Resources and some of the choice, almost mining-ready, nickel and chromite deposits in the Ring of Fire.
Wyloo Metals said in an Aug. 19 news release it's not backing down from a rival bid by BHP to acquire Toronto-based junior miner Noront, insisting it has no intention of relinquishing its majority position to maintain control of Canada's next great mining camp in the James Bay region.
Perth-headquartered Wyloo finally broke its month-long silence after Melbourne-based BHP, one of the world's largest mining companies, jumped into the fray in July with a cash offer of $325 million, at $0.55 cents a share, to Noront investors, besting Wyloo's overture to Noront last May of $133 million, at $0.315 per share.
Viewing Wyloo's move as a hostile takeover, Noront's board of directors recently recommended shareholders accept the BHP offer.
In the release, Wyloo said its "disappointed" Noront's board chose not to "meaningfully engage or negotiate" prior to accepting BHP's offer.
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Privately-held Wyloo came aboard as Noront's largest shareholder last December, picking up the 23 per cent stake vacated by Resources Capital Fund. By late May, Wyloo boldly elected to acquire all of the outstanding common shares of Noront before BHP entered the scene in late July.
BHP's offer came through BHP Lonsdale, a BHP subsidiary company and owner of 3.7 per cent of Noront shares.
Wyloo is a Perth-based subsidiary of Australian mining magnate Andrew Forrest's Tattarang. The company said it intends to increase its stake in Noront from 24 per cent to 37 per cent by converting a US$15-million convertible loan into common shares of Noront.
In the release, Wyloo said BHP's bid is unlikely to succeed given the "minimum mandatory tender condition...is unlikely to be satisfied" without Wyloo's support as a cornerstone investor in Noront.
Wyloo further claims it's being stonewalled by Noront from being able to upgrade its offer to Noront's shareholders. The company said it's prepared to make a "superior offer" if only it were allowed to access the books.
"Despite numerous attempts to date, the Noront board has denied Wyloo Metals from obtaining access to due diligence on reasonable terms for a shareholder with a cornerstone position.
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"Unfortunately, the total value of any superior offer contemplated by Wyloo Metals must accommodate the Cdn$13 million break fee payable to BHP, which was agreed to by the Noront Board to the direct detriment of Noront’s shareholders."
Wyloo said Noront's land package "hosts some of the most prospective mineral deposits in the world" with the potential for become "Canada’s next great mineral district, supporting the production of future-facing commodities for multiple generations."
"Wyloo Metals continues to firmly believe in the immense potential of the Ring of Fire and therefore does not intend to support or tender its Noront shares to BHP's offer."