BHP moving to take over Noront Resources
Noront Resources, the mining company that currently holds development rights in northern Ontario's Ring of Fire chromite deposit with plans to build a smelter in Sault Ste. Marie, is about to be taken over.
The company's board of directors is recommending acceptance of an offer to shareholders from BHP---a global resources company with headquarters in Australia.
The offer is $0.55 a share, in a deal worth $325 million.
"With proven expertise and capabilities in both exploration and bringing complex base metals projects into production, the BHP group is well-positioned to advance Noront's Ring of Fire projects through the next stages of development," Noront said in a news release Tuesday.
BHP's offer represents a 129 per cent premium to Noront’s closing price on May 21 and a 69 per cent premium to the closing price on July 26, the last trading day before the announcement.
The members of the Noront board who voted on the matter are unanimously recommending shareholders accept the offer.
"This is 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," said Johan van Jaarsveld, BHP chief development officer.
Noront CEO Alan Coutts agrees.
"This offer is in the best interests of the company and shareholders. 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," Coutts said.
Noront said additional information regarding the offer will be included in a take-over bid circular which will be mailed to shareholders soon.