Diversified major BHP on Tuesday announced a recommended cash offer for Canadian nickel developer Noront Resources, outbidding Australian mining magnate Andrew Forrest’s Wyloo Metals.

The offer of C$0.55 a share valued Noront, which is active in Ontario’s Ring of Fire, at C$325-million.

Not only is it a significant premium to Noront’s closing price on Monday, but also 75% higher than the C$0.315 a share that Wyloo proposed to offer.

The Noront board “unanimously” recommend that Noront shareholders tender their shares to accept the offer.

“This transaction provides a significant premium to Wyloo's indicative offer, and crystallises immediate and certain value through an all-cash offer,” said Noront CEO Alan Coutts.

“BHP has the financial strength, world-class mining expertise, and commitment to work in partnership with stakeholders to advance Eagle’s Nest and the Ring of Fire, which has the potential to deliver benefits to local communities, First Nations, and Ontario for years to come.”

BHP chief development officer Johan van Jaarsveld said that the transaction was a “win-win for both BHP and Noront shareholders”.

“For BHP, the acquisition of Noront presents a world-class growth option, in a key future-facing commodity. The highly prospective Eagle’s Nest nickel project provides an excellent platform from which to develop further opportunities in Ontario’s Ring of Fire.

"For Noront shareholders, this offer recognises and realises the full value of Noront’s portfolio, delivering guaranteed shareholder returns in the near term," said Van Jaarsveld.

Noront has ownership of, 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.

The company’s first project is a 100%-owned, high-grade, nickel, copper and platinum group element deposit called Eagle’s Nest. It is the largest high-grade nickel discovery in Canada since Voisey’s Bay and the most advanced project in the Ring of Fire.  

The other projects in its pipeline are the Blackbird and Black Thor chromite deposits in conjunction with a ferrochrome production facility in Sault Ste. Marie.