Wyloo Metals Proposes Offer to Shareholders To Participate in Noront’s Future

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Ring of Fire Map

  • Wyloo Metals’ proposal will provide each Noront shareholder with the option of either accepting a superior price for their shares or participating in Noront’s growth potential by remaining as a shareholder
  • Noront shareholders have a unique opportunity to participate in Canada’s next great mineral hub led by Dr. Andrew Forrest AO, the Founder and Chairman of Fortescue Metals Group (ASX:FMG), who intends to replicate his success at Fortescue with Noront’s Ring of Fire assets
  • Consideration of Cdn$0.70 in cash per share represents a 192% premium to Noront’s unaffected closing price on May 21, 2021 and a 27% premium to BHP’s Cdn$0.55 per share take-over bid price1

PERTH – MINING – Wyloo Metals Pty Ltd (“Wyloo Metals”) has today submitted a proposal (the “Acquisition Proposal”) to the Board of Noront Resources Ltd. (TSXV:NOT) (“Noront” or the “Company”) as part of a comprehensive strategy to rebuild the Company and unlock the future of the Ring of Fire. Under its Acquisition Proposal, Wyloo Metals will provide each Noront shareholder with the option of either participating in Noront’s growth potential by remaining as a holder under a new and proven leadership team, or accepting a superior price for some or all of their shares.

Overview of the Acquisition Proposal

The Acquisition Proposal will provide those shareholders who, like Wyloo Metals, believe in the long-term potential of Noront with the opportunity to participate in the Company’s growth potential by remaining as holders of some or all of their shares.

Alternatively, Wyloo Metals is prepared to acquire Noront shares at a price of Cdn$0.70 in cash per share. This price represents a significant premium of:

  • 192% to Noront’s unaffected closing price of Cdn$0.24 on May 21, 2021, the last trading day prior to the date that Wyloo Metals first publicly announced its intention to make an offer for Noront; and
  • 27% to the Cdn$0.55 price offered under the take-over bid for Noront by BHP Western Mining Resources International Pty Ltd. (“BHP”).

The acquisition will be made by a Canadian affiliate of Wyloo Metals and structured as a Plan of Arrangement under the Ontario Business Corporations Act.

Commenting on the structure of the transaction, Luca Giacovazzi, Head of Wyloo Metals, said:

“In April this year, we were deeply concerned when the Noront Board proposed to farm out Noront’s exploration projects to BHP for only Cdn$25 million. Rather than consenting to such a transaction, we decided to make an offer to acquire the Company. Our fears were justified when the Noront Board completed a deeply discounted 5% placement to BHP, giving away a strategic toehold in the Company to an obvious suitor.

Since our initial proposal, we have listened to the feedback from shareholders who, like us, believe in the future of the Ring of Fire. We believe Noront shareholders deserve the chance to decide whether to join us in rebuilding the Company, and not be pressured into selling all of their shares unless they want to.”

Benefits of the Acquisition Proposal

  • Wyloo Metals’ Acquisition Proposal is clearly financially superior to BHP’s take-over bid.
  • Wyloo Metals is providing existing Noront shareholders with the option of remaining as shareholders of Noront under new leadership and retaining some or all of their exposure to the immense potential value of the Ring of Fire mineral district, rather than forcing an exit upon them.
  • Wyloo Metals’ Acquisition Proposal has a higher certainty of success than the take-over bid proposed by BHP given that Wyloo Metals owns approximately 37.5% of Noront’s shares (partially diluted) and does not intend to support or tender to BHP’s offer. Without Wyloo Metals’ support, BHP’s take-over bid transaction structure is unlikely to meet the minimum tender condition.
  • Noront will be revitalized under the leadership of a world-class Board of Directors led by Dr. Andrew Forrest AO, who has an unparalleled track record in the development of remote mining projects and a proud and continuing legacy for partnering with Indigenous and local communities. Dr. Forrest led Fortescue from a junior exploration mining company to one of the world’s largest mining companies, with a current market capitalization in excess of A$65 billion.
  • Wyloo Metals reiterates its commitments to the development of a Future Metals Hub in Ontario (see below), announced on May 31, 2021, should its Acquisition Proposal be successful.

New Leadership at Noront

Wyloo Metals believes that Noront’s shareholders have seen value eroded under the custodianship of Noront’s existing Board of Directors. Consequently, upon successful completion of the Acquisition Proposal, Wyloo Metals intends to put in place a new, world-class Board of Directors to lead Noront to the benefit of those shareholders who choose to participate in its future, consisting of the following:

Dr. Andrew Forrest AO (Chair)

Dr. Forrest is Australia’s most active philanthropist and one of the most effective business leaders of his generation. As its Founder and Chairman, he has led Fortescue Metals Group from inception to its top 10 status on the Australian Securities Exchange with a current market capitalization of over A$65 billion, during which time Fortescue invested more than US$30 billion in the resources sector. In 2017, Dr. Forrest was appointed an Officer of the Order of Australia (AO) for distinguished service to the mining sector, to the development of employment and business opportunities, as a supporter of sustainable foreign investment, and to philanthropy.

Mr. Ian W. Delaney (Non-Executive Director)

Mr. Delaney brings decades of experience in mining, investment banking and corporate governance to the Noront Board. He has previously served as Chairman of the Board and Chief Executive Officer of Sherritt International Corporation. He has also served as President and Chief Executive Officer of Viridian Inc. (formerly Sherritt Inc.) and the Horsham Corporation, President and Chief Operating Officer of Merrill Lynch Canada Inc, and Vice President and Director for McLeod, Young, Weir (now Scotia McLeod). He has also served on the boards of MacMillan Bloedel, Cenovus Energy and Co-Steel International. Mr. Delaney is currently the Chairman of the not-for-profit organization Ornge and serves on the Board of Directors of The Westaim Corporation.

Mr. Warren Gilman (Non-Executive Director)
Mr. Gilman is a mining engineer with more than 30 years of experience as a deal maker in the metals and mining sector and currently serves as Chairman and CEO of Queen’s Road Capital Investment Ltd., a resource-focused investment company. He was a founder of the Canadian Imperial Bank of Commerce (CIBC) Global Mining Team in Toronto in 1988, leading the team’s efforts out of Australia and Hong Kong, during which he was responsible for some of the largest equity capital markets financings in Canadian mining history. From 2011, Mr. Gilman led CEF Holdings Ltd, a global mining investment company. Warren is currently Chairman of the International Advisory Board of Western University, and serves as a director for NexGen Energy Ltd, Gold Royalty Corp and Los Andes Copper Ltd.

Existing Noront Director Mr. Luca Giacovazzi will retain his position on the Board of Directors as a nominee of Wyloo Metals and Wyloo Metals will also ensure any director nomination rights of Baosteel Resources Holding (Shanghai) Co are fully respected. We also intend to conduct a search process for additional directors and executive management.

Partnering with First Nation communities

Wyloo Metals is committed to creating value from resource developments and retaining that value in the region in which it is generated. In respectful consultation with First Nation partners, we will together generate value for the coming seven generations of First Nation communities. When developed responsibly, the employment and business opportunities for First Nation communities in the Ring of Fire will be truly transformative and self-sustaining.

At Fortescue Metals Group, Dr. Forrest has demonstrated his commitment to creating First Nation business opportunities. Fortescue’s Indigenous procurement program, Billion Opportunities, was established in 2011 with the stretch goal of awarding a billion dollars in contracts to Aboriginal businesses. Now after the 10th anniversary of the program’s establishment, more than A$3.5 billion has been awarded to Aboriginal businesses and joint ventures.

Similarly, Fortescue’s Vocational Training and Employment Centre (VTEC), established in 2006, provides training to Aboriginal candidates with the promise of guaranteed employment for candidates if they complete their course. More than 1,000 candidates have completed a course since the project’s inception and been employed at Fortescue.

Next steps

Wyloo Metals has requested from the Noront Board a modest period of time in which to conduct confirmatory due diligence, which Wyloo Metals intends to complete in parallel with the finalization of transaction documentation. In its statement on August 20, 2021, Noront correctly asserted that Wyloo Metals was provided an opportunity to access due diligence information subject to the execution of a confidentiality agreement but declined to do so. However, what Noront did not disclose is that the confidentiality agreement proposed by Noront contained a standstill clause that would have prevented Wyloo Metals from making its initial and subsequent offers directly to shareholders. The standstill clause also would have adversely and inappropriately restricted Wyloo Metals’ rights as an existing shareholder, including by prohibiting it from proposing alternative nominations to Noront’s board of directors, which is unacceptable to Wyloo Metals.

Wyloo Metals notes that its ability to formalize this Acquisition Proposal is subject to the Noront Board’s timely and good faith negotiation of an Arrangement Agreement in line with its fiduciary duties. We look forward to working productively with the Noront Board towards a successful transaction for the benefit of Noront shareholders.

Advisors

Wyloo Metals has engaged Maxit Capital LP to act as its financial advisor and McCarthy Tétrault LLP to act as its legal advisor. Shorecrest Group has also been engaged to act as Wyloo Metals’ strategic communications advisor and proxy solicitation and information agent.