Latest takeover offer for Noront Resources could mean end of 'bidding war'
Australian companies Wyloo Metals, BHP have put in offers on the Ring of Fire region this week
A bidding war for ownership of a mining company with a significant stake in northern Ontario's Ring of Fire region may soon be over.
This week, Australian companies Wyloo Metals and BHP announced new offers to take over Canadian company Noront Resources.
Both companies have made two offers this year.
In May, Wyloo offered to pay 31.5 cents cash for each Noront share. In July, another Australian company, BHP, joined the playing field, offering 55 cents cash for each share. At the time, Noront's board of directors recommended shareholders accept that offer.
Wyloo's latest offer is for 70 cents per share. On Wednesday, BHP put an offer in of 75 cents a share.
"It's very significant," said mining columnist Stan Sudol, who has been watching the bidding war unfold. Sudol said the "most interesting part" of Wyloo's announcement on Monday is that BHP was given just five business days to respond with a matching offer, which it did. Sudol said he's been told the five day window is fairly standard.
"So we're finally coming to the end of this bidding war, or we're hoping we do," Sudol said.
In a release, Noront stated it is recommending shareholders accept the "improved BHP offer," which expires on Nov. 9.
'Very deep pockets'
No matter which company takes over a controlling share of Noront, Sudol said the interest in the company and its Eagle's Nest mine site is good news for decarbonization efforts and local communities.
"Both these companies have very very deep pockets. They realize that battery metals; nickel, copper, are the future with our decarbonization initiatives to arrest global warming. And the Ring of Fire has huge, huge potential," Sudol said.
"So basically, whoever wins, the Ring of Fire and the Aboriginal communities around it are basically the winners."
Some Indigenous communities are opposed to the Ring of Fire project — citing concerns about lack of proper consultation, and whether impact assessments will be thorough enough. Despite those ongoing concerns, Sudol believes both Wyloo and BHP would be prepared to work with First Nations.
"Both companies have cut their teeth in Australia which has similar Indigenous communities … which they've consulted with in many projects, so they're very familiar with Indigenous consultations," Sudol said.
In its news release this week, Wyloo touted a "proud and continuing legacy of partnering with Indigenous and local communities."