PERTH (miningweekly.com) – TSX-V-listed Noront Resources in December entered into a binding agreement with Andrew Forrest’s Wyloo Metals, after that company’s offer was tapped as a superior bid to mining major BHP’s bid for Noront.
Wyloo in December abandoned talks with BHP around the major’s bid for Noront, and instead launched an improved offer of C$1.10 a share for every Noront share held, trumping BHP’s own offer of C$0.75 a share.
The Wyloo offer represents an approximate 358% premium to the unaffected closing price of Noront’s common shares on May 21, 2021 and an approximately 47% premium to BHP’s cash offer.
“We are pleased to have a binding agreement with Wyloo Metals. The offer price of C$1.10 per share represents a significant premium to the unaffected price of Noront’s common shares and the improved BHP offer, and a great outcome for the shareholders of Noront following a lengthy process. Noront’s board of directors and management wish to thank shareholders for their support and patience over the last several months,” Noront CEO Alan Coutts said in December.
BHP has said that it would not match the Wyloo offer.
“BHP is committed to its strict capital discipline framework. While the Eagle’s Nest deposit is a promising resource, we do not see adequate long-term value for BHP shareholders to support an increase in BHP’s offer in order to match the C$1.10 per share proposal from Wyloo Metals,” said BHP chief development officer Johan van Jaarsveld.
BHP has also terminated a support agreement with Noront, necessitating a C$17.78-million termination payment from Noront to BHP.
Wyloo Metals has provided a loan to Noront of up to C$29.38-million to finance, among other things, the termination payment to BHP, as well as other transaction-related costs.
The term of the loan is 12 months from completion of the Wyloo Metals transaction, with interest of 5% a year payable quarterly in either cash or common shares, at the option of Noront and subject to receiving shareholder approval for the payment of interest in common shares, and subject to the approval of the TSX Venture Exchange.
Under the terms of the arrangement agreement, Wyloo Metals will be entitled to a termination payment of C$26-million, or 4% of the total equity value of the transaction, based on 100% of Noront’s fully diluted shares outstanding, if the arrangement agreement is terminated in certain circumstances.
Noront’s shareholders are expected to meet no later than the end of March to decide on the arrangement agreement with Wyloo. The transaction would also be subject to court and stock exchange approvals, with completion expected before the end of the first quarter of this year.