Australian mining magnate Andrew Forrest‘s Wyloo Metals said on Tuesday it would launch an unsolicited bid for shares in Noront Resources it does not already own, an offer valuing the Canadian miner at C$133 million (US$110 million).
Noront responded by recommending that shareholders defer taking any action while it considers alternatives to Wyloo’s C$0.315 per share offer.
Wyloo said a deal would remove Noront shareholders’ exposure to uncertainty of “several further years” of infrastructure and mine development.
The bid would add to a global green drive by Forrest, who over more than two decades turned Fortescue Metals into the world’s fourth-biggest iron ore miner.
Noront’s main asset is the high-grade Eagle’s Nest nickel, copper and palladium deposit in Canada‘s so-called Ring of Fire.
That region contains rich mineral resources but development has been hampered by a lack of power and transportation infrastructure in the area in the far north of Ontario, some 1,000 miles northwest of Toronto.
Wyloo, a subsidiary of Forrest’s Tattarang, one of Australia’s largest private investment groups, became Noront’s top shareholder with a 23% stake in December.
It said the offer represents a 31% premium based on the closing price of Noront shares on May 21, the last trading day prior to the offer announcement.
Noront shares were up 29% at C$0.31 at midday.
Wyloo Metals also said it was prepared to make available to Noront a C$5 million unsecured, extendable loan.
In January, Wyloo announced a C$25 million option and joint venture agreement with Canadian junior Orford Mining covering the West Raglan nickel project in Nunavik, Quebec.
(US$1 = C$1.21)
(Reporting by Jeff Lewis;Editing by Alexander Smith and Richard Chang)
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