Noront Resources Ltd. [NOT-TSXV; NOSOF-OTC] released a statement Monday May 31 saying its Australian suitor Wyloo Metals Pty. Ltd. is committed to developing a sustainable world-class metals hub in Ontario. Such a hub would create new industry and employment opportunities across the region, Noront said.
The announcement follows Wyloo Metals’ statement on May 25, 2021, regarding its intention to make an offer to acquire all of the outstanding shares of Noront that it doesn’t already own.
Back in December, 2020, Wyloo Metals has agreed to acquire the equity and debt interests in Noront that were previously held by U.S. private equity firm Resource Capital V L.P.
Wyloo is the mining division of Tattarang, one of Australia’s largest private investment groups. Under a purchase agreement between Wyloo Metals and Resource Capital Fund V and Resource Capital Annex Fund V (collectively RCF), Wyloo acquired 22.5% of Noront’s issued and outstanding shares, a US$15 million debenture, and a 1.0% Net smelter royalty interest in Noronto’s Eagle’s Nest deposit.
As a result, Wyloo became a control person of Noront and gained the right to nominate two members to Noront’s board of directors.
The Wyloo transaction came roughly one year after Noront 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.
The Ring of Fire region is an area that Ontario government officials have previously described as “one of the most promising mineral development opportunities in Ontario in almost a century.”
Recent estimates suggest multi-generational potential for chromite production as well as significant production of nickel, copper and platinum.
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.
It was envisioned that the chromite would be extracted and then concentrated at source. It would then be shipped by road or rail to processing facilities further south in one of Ontario’s major mining centres, where it would be turned into Ferrochrome, a critical ingredient used to manufacture stainless steel.
Noront has been hoping to see construction of a related Ferrochrome production facility in Sault Ste Marie.
Through the future metals hub, Wyloo Metals intends to invest directly in local businesses, create training and employment pathways, and support world-leading sustainable mining technology.
The project will be centred on the following key commitments, including the development of Eagle’s Nest as a zero-emissions mine; $25 million towards feasibility studies designed to investigate the potential for battery material production in Ontario; targeting $100 million in contract awards to first nations businesses; and creating and sustaining Northern Ontario and first nations’ employment opportunities.
Head of Wyloo Metals, Luca Giacovazzi, said the commitments reinforce Wyloo Metals’ belief in Canada’s long-term potential to be a globally relevant producer of reliable and responsibly sourced battery metals.
Noront shares eased 1.6% or $0.005 to 31 cents on volume of 523,840. The shares are currently trading in a 52-week range of 32.5 cents and 13 cents.