Noront Resources Ltd. [NOT-TSXV; NOSOF-OTC] on Monday December 7 said Wyloo Metals Pty Ltd. 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 Metals 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 is picking up 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 will become a control person of Noront and will have the right to nominate two members to Noront’s board of directors, one of which must be independent of Wyloo Metals.
“We are delighted that Wyloo Metals has chosen to acquire a cornerstone interest in Noronto,” said Noront President and CEO Alan Coutts.
Noront shares advanced on the news, rising 18.2% or $0.03 to 19.5 cents on volume of almost 2.98 million. The shares are trading in a 52-week range of 22.5 cents and 11.5 cents.
Monday’s announcement comes 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.
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 in stainless steel.
Noront has been hoping to see construction of a related Ferrochrome production facility in Sault Ste Marie.
Based in Sault Ste. Marie, Algoma is a fully integrated producer of hot and cold rolled steel products, including sheet and plate.
The agreement with Algoma provides Noront with a five-year renewable option to lease a brownfield property in Sault Ste. Marie for up to 99 years. Noront plans to design, construct and operate a ferrochrome production facility which will service the company’s Ring of Fire chromite deposits.
The agreement provides the two companies with an opportunity to repurpose an existing brownfield location with a view to sharing infrastructure.