Canadian nickel junior Noront Resources on Tuesday confirmed that it had received an arrangement agreement from suitor Wyloo Metals, which outlines the terms and conditions of its C$0.70-a-share offer.
Noront said that it was reviewing the arrangement agreement and stressed that the board would seek to achieve maximum value for shareholders.
The company also confirmed that it had signed a confidentiality agreement in the form provided by Wyloo, thus allowing for a due diligence to be completed.
Noront’s statement follows a press release by Wyloo late on Monday, which accused the Canadian firm’s board of frustrating a “clearly superior offer” by continuing to “publicly support” BHP’s C$0.55-a-share offer.
Noront's stock is currently trading at C$0.80 a share.
Responding to Wyloo’s request that directors and officers disclose if they were afforded any benefits by BHP that would not be made available to other shareholders, Noront said that it was “simply incorrect” to assert that the exercise of options and share awards was unusual.
“The acceleration provisions provided in the support agreement for the options and share awards are also customary for a transaction of this nature and are fully disclosed in the support agreement and other public filings relating to the proposed transaction with BHP. As is customary, the lock-up agreements BHP entered into with the directors and officers of Noront will automatically terminate if the support agreement is terminated in accordance with its terms, including if Noront terminates the support agreement to accept a superior proposal.”
Both BHP and Wyloo have their eye on Noront’s early-stage Eagle’s Nest deposit, in the emerging Ring of Fire mining area. The deposit is billed as the biggest high-grade nickel discovery in Canada since the Voisey’s Bay nickel find.