Northern Ontario — An Australian company’s bid to take control of what are believed to be large nickel and chromite deposits in the Ring of Fire mineral belt has been accepted by shareholders.
Toronto-based Noront Resources reported late Tuesday that its shareholders “overwhelmingly” voted this week in favour of a bid of $1.10 per share, that had been put forward by Wyloo Metals.
Just over 66 per cent of shareholders who voted had to be in favour of the proposal before it could become effective.
The deal is set to close by April 7, Noront said. It’s not yet clear what the new company will be named.
Wyloo’s final offer came in December following a prolonged bidding war with a rival Australian company — oil, mining and gas giant BHP.
For several years, Noront has been positioning itself to build the first nickel mine in the Ring of Fire located about 550 kilometres northeast of Thunder Bay. The mining of chromite — a main ingredient in stainless steel — was to follow at adjacent deposits.
When Noront found it could no longer finance the projects, it initially recommended its shareholders accept a takeover proposal by BHP.
Wyloo, which already owned a substantial amount of Noront shares, countered with higher offers after it was unable to reach a mutual agreement with BHP.
Mining development in the Ring of Fire isn’t expected to occur until after all-season roads or a rail route have been established for transporting ore.
Carl Clutchey, Local Journalism Initiative Reporter, The Chronicle-Journal
Noront Resources
Noront Resources (TSXV: NOT; US-OTC: NOSOF) was the target of a heated takeover contest, won by Australian miner Wyloo Metals last year. A shareholder vote on the takeover is slated for mid-March and the acquisition is expected to close in the first quarter. Noront’s assets are located in Ontario’s Ring of Fire, near James Bay. It holds 100% interests in the Eagle’s Nest high-grade nickel-copper-platinum group metals deposit, the Blackbird chromite discovery, and the Black Thor chromite deposit. It also holds a 70% interest in the Big Daddy chromite deposit and a 100% interest in the Black Label deposit.
With so many riches in the ground, there remains much to be settled about the Ring of Fire — Indigenous participation, rail or road access, economic production decisions, and financing. A ferrochrome production facility is under consideration, perhaps in Sault Ste. Marie, Ont.
Noront has already produced a preliminary economic assessment for the Eagle One deposit (2008), a PEA at McFaulds Lake (2010), a prefeasibility study for Eagle’s Nest (2011), a feasibility study for Eagle’s Nest (2012) and a 43-101 technical report for the Nikka copper-zinc deposit (2020).
The first development in the Ring of Fire will probably be Noront’s Eagle’s Nest project. The feasibility study gave the project an after-tax net present value with an 8% discount rate of C$543 million and an internal rate of return of 28%. A conventional 3,000 tonne per day, blasthole open stope underground mine with paste backfill is planned. Returning the tailings underground as fill means there would be no management facility at surface.
The Eagle’s Nest project has proven and probable reserves of 11.2 million tonnes grading 1.68% nickel, 0.87% copper, 0.89 gram platinum per tonne, and 3.09 grams palladium per tonne. The inferred resource is 9 million tonnes at 1.1% nickel, 1.14% copper, 1.16 grams platinum per tonne, and 3.49 grams palladium per tonne. Production of concentrates containing 34.2 million lb. nickel, 19.2 million lb. copper, 23,470 oz. platinum and 90,022 oz. of palladium annually is planned.
Capital costs were estimated at C$609.4 million with operating costs of C$1.1 billion over the life of the project. The study used metal prices of $9.43 per lb. nickel, $3.60 per lb. copper, $1,600 platinum per ounce, and $599 palladium per ounce.
The decision to begin development on Eagle’s Nest or any other of Noront’s projects in the Ring of Fire is dependent on the new owner.
Noront Resources has a market cap of C$605 million.
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