TORONTO (miningweekly.com) – Toronto-based Noront Resources has jumped back into the fight for Freewest Resources Canada, raising an earlier hostile bid to beat a friendly offer for Freewest from US miner Cliffs Natural Resources.

Noront said on Monday that its “final” offer, of two Noront shares and a five-year purchase warrant for each seven Freewest shares, will expire on December 11 and will not be increased.

The offer has an implied value of C$0,86 a Freewest share, or C$222-million, and represents a 173% premium to the closing price a day before Noront announced its initial offer, the company said.

Noront originally offered one of its own shares for four Freewest shares in early October, implying a value of about C$0,3975 for Freewest shares, but Freewest said at the time that the offer was opportunistic and undervalued its prospects.

The company said later on Monday that it would assess the sweetened offer from Noront with its financial adviser, but urged shareholders to take no action over the offer in the meanwhile.

If Freewest's board decides that the new Noront offer is superior to the Cliffs arrangement, Cliffs has the right to change the terms of its agreement with Freewest within five business days.

Freewest's main assets are two chromite projects and an interest in an adjacent joint venture, in the Ring of Fire mineral district in the James Bay Lowlands of Ontario.

Noront is also active in the area, and has found high-grade nickel, copper, platinum, palladium, chromite and vanadium mineralisation on its properties.

The company argues that a tie-up with Freewest would mean the emerging Ring of Fire district could be more aggressively explored and developed under a consolidated company.

However, US-based Cliffs announced last week that Freewest's board had agreed to support an offer of the share equivalent of C$0,55 a share for the company. Shareholders would also receive a share in a new company that would be spun off to hold Freewest's exploration assets other than the three Ring of Fire chromite projects.

Including the share in the new company, valued at C$0,15, the Cliffs offer would be worth C$0,70 a share.

The company, which produces coal and iron-ore, said it planned to build a chrome mine producing between one-million and two-million tons a year of high-grade chromite ore, which would be processed into 400 000 t to 800 000 t of ferrochrome.

But Noront said on Monday that Freewest's management had “failed” its shareholders by supporting the Cliffs offer.

It accused the management of negotiating a better deal for themselves by receiving cash at a premium for their options at the expense of Freewest shareholders.

The conditions agreed to with Cliffs, such as the break fee and deal timetable, would also frustrate and hinder other competing offers, Noront protested.

The company also said that the C$0,15 apiece value ascribed to the shares of the 'new Freewest' company that will be spun off under the Cliffs offer is “highly inflated”.

The Cliffs offer requires approval by two-thirds of Freewest shareholders to succeed.

Shares in Freewest gained 20,3% on Monday, to C$0,77 apiece by 15:56 in Toronto. Noront rose 2,22%, to C$2,30 a share. Cliffs' shares edged up just 1c, to $44,08 in New York.