(Alliance News) - BHP Group PLC on Monday increased its cash offer for Noront Resources Ltd as the global mining heavyweight ups the ante in a bidding war with Australian miner Wyloo Metals Pty Ltd.
Noront is a Canadian mining company, listed on the TSX Venture Exchange. It is focused on the development of its Eagle's Nest nickel, copper, platinum and palladium deposit as well as chromite deposits located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire.
BHP increased its offer to CAD0.75 per share, up from its original offer of CAD0.55 made in late July, and besting Wyloo's updated CAD0.70 offer made at the end of August. Wyloo first made an offer for Noront in May for CAD0.315 per share.
BHP's new offer is more than triple Noront's share price of CAD0.24 on May 21, which was the day before Wyloo made its first offer, sending the stock higher.
Noront shares ended marginally lower at CAD0.78 on Tuesday in Toronto, with a market capitalisation of CAD436.1 million, around USD353.1 million.
Noront supports BHP's improved offer and recommends shareholders tender now to receive the cash consideration offered before its expiry date on November 9.
BHP Chief Development Officer, Johan van Jaarsveld, said: "Our increased offer of CAD0.75 per share provides a compelling premium for Noront shareholders and is available to shareholders now. Our offer provides shareholders with the value inherent in Noront's portfolio of projects, including the Eagle's Nest project, delivering shareholders who accept our offer certainty of value and immediate liquidity."
BHP noted that delivering Noront's portfolio of projects in the Ring of Fire is expected to take many years, require significant capital investment and development of remote infrastructure.
BHP shares were down 1.3% to ZAR397.54 each in Johannesburg on Wednesday morning, and lost 2.0% in London at 1,968.00 pence each.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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