Australia’s Wyloo Metals is considering making a superior offer for Canada’s Noront Resources, whose Ring of Fire land package in Ontario late last month attracted a C$325-million offer from diversified major BHP.

Wyloo, a unit of Australian mining magnate Andrew Forrest’s Tattarang investment group, pointed out on Thursday that it had a 37.5% partially diluted interest in Noront and that BHP’s bid was unlikely to satisfy the minimum mandatory tender condition without Wyloo’s support.

“Wyloo Metals continues to firmly believe in the immense potential of the Ring of Fire and therefore does not intend to support or tender its Noront shares to BHP's offer,” the company said in a statement.

Wyloo confirmed that it would consider proposing a superior offer to acquire the outstanding shares of Noront that it did not already own, but only if it was granted due diligence “on reasonable terms for a shareholder with a cornerstone position”.

The Noront board on July 27 recommended the C$0.55-a-share cash offer from BHP, arguing that it was a significant premium to Wyloo’s indicative offer. Noront’s stock is currently trading 12% higher than BHP’s offer and closed C$0.62 a share on Thursday.

Should Wyloo make a superior offer, it would have to accommodate the C$13-million break fee payable to BHP.

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.

BHP sees Noront’s presence in the Ring of Fire, and particularly its Eagle’s Nest nickel project, as a “world-class growth option, in a key future-facing commodity”, BHP chief development officer Johan van Jaarsveld said last month.

Noront’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.