Big news this week! Australian company Wyloo Metals, which recently purchased a 23% share in Noront Resources, has publicly announced that it intends to make an offer to buy up the rest of the common shares in the company. This offer was “unsolicited” (read: unwanted), and Noront was quick to beg investors not to be too hasty in taking any action. No official proposal has yet been made; once it has, shareholders will have 105 days to respond.
In response to the announcement, Noront has responded with a “poison pill” plan, which is designed to stop other companies or big investors from amassing ownership stakes over a certain threshold. This is made possible by allowing the company under threat to sell new stock to shareholders at a discount, which dilutes the ownership interest of the new, hostile company.
Since the original announcement on May 25th, more information has been released about what Wyloo intends to do if its offer goes through. According to a May 31st press release, Wyloo wants to establish itself as a key player in the Ontario battery metals supply chain and develop a “Future Metals Hub” that it says would be net zero emissions and developed in collaboration with First Nation communities.
The question remains: is anybody actually talking to Matawa First Nations about this? What will this mean for the environmental assessment processes already underway, and the promises that Noront has made to Indigenous communities in the so-called Ring of Fire?
May 25, 2021 (Northern Ontario Business):
Australians look to go all-in on the Ring of Fire
Wyloo Metals makes takeover bid for Noront Resources
“Noront Resources largest shareholder, Australia’s Wyloo Metals, intends to make a bid to acquire the Ring of Fire mine developer. Perth, Australia-headquartered Wyloo Metals announced May 25 that it intends to make an offer to acquire all of the outstanding common shares in Noront that it does not currently own in a proposed $133-million deal. Privately-held Wyloo made its initial buy-in last December, through a subsidiary company, Wyloo Canada Holdings, taking a 23 per cent stake of Noront’s common shares.” Read more here…
May 25, 2021 (Reuters):
Australian Forrest’s Wyloo makes bid valuing Canada’s Noront at C$133mln
“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. Noront responded on Tuesday saying it recommends that shareholders defer taking any action while it considers alternatives to Wyloo’s C$0.315 per share take-private offer. Wyloo said the deal would remove Noront shareholders’ exposure to uncertainty of “several further years” of infrastructure and mine development.” Read more here…
May 25, 2021 (Regina Leader-Post):
Noront responds to unsolicited proposal by Wyloo Metals
“The Board of Directors of Noront Resources Ltd. (“Noront” or the “Corporation”) (TSX Venture: NOT) notes the announcement today by Wyloo Metals Pty Ltd., (“Wyloo”) a subsidiary of Tattarang Pty Ltd. (“Tattarang”), that it intends to commence an unsolicited proposal to acquire all of the common shares of Noront (the “Proposal”). The Corporation will review the terms of the Proposal and will communicate with its shareholders as appropriate.
Noront recommends that shareholders defer taking any action in respect of the Proposal. Shareholders are reminded that the announcement does not constitute an offer, and no offer may ever actually be made. As an unsolicited proposal by an insider of the Corporation, shareholders will be entitled to receive a valuation of the Corporation in order to consider the Proposal. Further, if the Proposal is ever formally made to shareholders, shareholders will have a period of 105 days to consider their alternatives and respond to any such offer, and will be provided with advice to shareholders in relation to such offer.” Read more here…
May 25, 2021 (yorkregion.com):
Australian co. plans offer for Noront Resources
“An Australian company says it plans to make a takeover offer for Ring of Fire developer Noront Resources Ltd. that values the Canadian company at about $133 million. Wyloo Metals Pty Ltd. says it will offer 31.5 cents in cash for each Noront share that it does not already hold. Noront is developing nickel, copper, chrome and platinum projects in Ontario’s Ring of Fire region. The offer is a 31 per cent premium based on the closing price of 24 cents for Noront shares on the TSX Venture Exchange on Friday. Noront says its board of directors has formed a special committee including three independent directors to review the proposal.” Read more here…
May 27, 2021 (Financial Post):
Canada’s Noront to adopt poison pill against Australian Forrest’s Wyloo
““The rights plan is designed to ensure that all Noront shareholders are treated fairly in connection with any takeover bid and to protect against ‘creeping bids’ for the outstanding common shares of Noront,” the miner said in its statement. Poison pills prevent other companies and investors from amassing ownership stakes above a certain threshold by authorizing the targeted company to sell new stock to its shareholders at a discount.
The company said it would issue one right for each outstanding share, effective May 26, and the right will allow the shareholders, other than the acquiring person and its related parties, to purchase additional shares at a 50% discount to the then prevailing market price.” Read more here…
May 31, 2021 (Northern Ontario Business):
Wyloo Metals want to rain money for a clean mining, inclusive Ring of Fire
Australian miner floats battery metals supply chain concept, proposes $100 million in First Nation contract awards
“If a mine gets built in the Ring of Fire under the Wyloo Metals flag, it will be a net zero emissions operation. The Australian mining investment company, which is making a play to take over Noront Resources’ nickel, chrome and metal assets in the James Bay region, said it’s prepared to open its wallet to find ways to reduce the environmental impact of mining in the Far North, will train and hire Indigenous people, and will award millions in contracts to First Nation-owned companies.
The Perth-headquartered company is floating the concept of a Future Metals Hub that would be developed in collaboration with First Nation communities and other regional stakeholders. Their intent is to look at the possibility of establishing a supply chain in Ontario to make the materials needed for the electric vehicle battery industry.” Read more here…
May 31, 2021 (The Globe and Mail):
Australia’s Wyloo Metals looks to spend $25-million to study viability of battery metals processing plant in Ontario
Unfortunately this article is behind a paywall. If you have a subscription to the Globe and Mail, you can read the article here.
June 1, 2021 (Creamer Media’s Mining Weekly):
Wyloo to study Ontario battery metals hub
Wyloo Metals, part of Australian private investment group Tattarang, has outlined its commitment to long-term investments in Canada, as it seeks to tap into the “once-in-a-generation opportunity” of the country to establish itself as a major player in the battery metals space.
“Wyloo, which recently announced a planned offer for nickel junior Noront Resources, has committed C$25-million towards feasibility studies to investigate the potential for battery material production in Ontario. The proposed hub, the company says, will be developed in consultation with regional stakeholders and First Nations to create battery material supply chain capabilities. First Nations stand to benefit from C$100-million in contract awards, the investment firm states, adding that a training and employment centre will guarantee job opportunities.” Read more here…