BHP in talks with Wyloo over Noront takeover

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BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK] is in talks with another Australian firm Wyloo Metals Pty Ltd. regarding its potential support of BHP’s $0.75 per share offer to acquire Noront Resources Ltd. [NOT-TSXV].

To allow more time for those discussions to progress, BHP said it is extending the initial expiry of its offer from November 9, 2021 to November 16, 2021. The earliest time BHP will be taking up Noront shares under its bid will be the new expiry time, BHP said in a press release.

“BHP and Wyloo Metals have engaged in initial conversations and are considering a mutually beneficial arrangement regarding the acquisition of Noront by BHP. There is no assurance that any agreement will be reached between BHP and Wyloo Metals,” BHP said.

The announcement comes after BHP raised its all-cash offer for Noront to $0.75 per share, surpassing Wyloo’s $0.70 proposal.

Wyloo is the mining division of Tattarang, one of Australia’s largest private investment groups. Wyloo had previously agreed in December, 2020, to acquire the equity and debt interests in Noront that where previously held by U.S. private equity firm Resource Capital V L.P.

Wyloo currently holds a 37.25% stake in Noront, a Toronto-based company with ownership or a controlling interest in all the major discoveries in the Ring of Fire, an emerging multi-metals area located in the James Bay Lowlands of Northern Ontario.

The company said it is developing resources that will be essential to the decarbonized future, including, nickel, copper, chrome and platinum.

Noront is being targeted by both BHP and Wyloo after it signed agreements with Algoma Steel Inc. and engineering firm Hatch Ltd. to facilitate development of the Ring of Fire mineral district and associated processing facilities.

Noront is hoping to extract nickel and chromite from its properties in the Ring of Fire area in partnership with local First Nations. Those properties include the company’s 100%-owned Eagle’s Nest deposit, which it has described as the highest- grade nickel-sulphide find in Canada since the Voisey’s Bay discovery in Labrador.

BHP has said Noront represents a growth opportunity in a prospective nickel basin capable of delivering a scalable, new nickel-sulphide district and provides the BHP group with more growth options in future facing commodities.

On November 2, 2021, Noront closed at 78 cents after almost 4.3 million shares had changed hands. The shares are currently trading in a 52-week range of 87 cents and 15 cents, leaving the junior with a market cap of $437 million, based on 436.4 million shares outstanding.

Noront’s board of directors has unanimously recommended that its shareholders tender their shares to the BHP offer.

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