Noront pays off US$15 million Wyloo loan with shares

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Noront Resources Ltd. [NOT-TSXV] said it has issued 96.15 million common shares in full satisfaction of its US$15 million amended and restated loan agreement held by Wyloo Canada Pty. Ltd., which now holds a 37.25% stake in Noront.

The announcement comes just weeks after Noront acknowledged the receipt of a form of arrangement from Wyloo’s Australian parent Wyloo Metals Pty Ltd., which outlines the terms of a proposed transaction that see Wyloo acquiring all of Noront’s outstanding shares for 70 cents each.

That would mark a 27% premium on a previous all-cash offer worth 55 cents a share from a subsidiary of Australian mining giant BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK].

Noront directors and senior management, plus major shareholders holding 9.9% of Noront shares (fully diluted) have agreed to tender their shares to the $325 million BHP offer. They have recommended that shareholders accept the bid from BHP.

Wyloo is the mining division of Tattarang, one of Australia’s largest private investment groups.

In a September 7, 2021, news release, Noront said it understands that the potential Wyloo transaction remains subject to the satisfaction of preconditions, including the completion of due diligence.

Meanwhile, Noront said it will also be making the final interest payment due under the Wyloo loan agreement of $350,789 for the period from July 1, 2021 to September 22, 2021 by delivering 468,969 common shares at an effective price per interest rate, subject to exchange acceptance.

The calculation of the number of interest shares to be issued is based on the volume-weighted average trading price of the common shares during the 20 days prior to September 22, 2021.

After giving effect to the issuance of the conversion and interest, there will be 559.5 million Noront shares issued and outstanding. Wyloo will hold a direct interest of 37.25% in the company.

Noront looks to be the target of a potential bidding war after it signed agreements with Algoma Steel Inc. and engineering firm Hatch Ltd. to facilitate development of the Ring of Fire mineral district in northern Ontario 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 announced its offer on July 27, 2021, saying that 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.

News that Noront had satisfied the US$15 million loan came after the close of trading on September 30, 2021, when Noront shares closed unchanged at 79 cents. The shares are trading in a 52-week range of 83 cents and 15 cents.


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