A months-long聽battle聽over nickel-copper miner Noront Resources聽(TSX-V: NOT)聽may have聽come to an end as the Canadian company聽said聽on Monday聽it聽had聽聽from聽Australian mining聽billionaire聽Andrew Forrest鈥檚聽Wyloo聽Metals,聽over聽the聽latest聽offer from聽BHP.听
Wyloo鈥檚聽C$0.70 per share proposal聽represents better value for shareholders, Noront said, adding that BHP has five business days to match the offer.听The Australian miner said that its offer represented a 192% premium to Noront鈥檚 unaffected closing price on May 21, adding it 鈥渄id not intend to support any alternate offers鈥� for the takeover target.
The world鈥檚 largest miner had said in August it would consider matching Wyloo鈥檚 raised bid as part of its ongoing strategy of expanding its footprint among future-facing commodities, including nickel, lithium and copper.
The tug of war between the two Australian聽companies聽is聽the latest evidence of the rush global miners聽are聽in聽to聽secure supply of聽battery metals ahead of an expected surge in demand from electric vehicles.听
Wyloo聽Metals, which聽already is聽Noront鈥檚 top shareholder, with a 37% stake as of September, had in May offered C$0.315 per share for the stock it did not already hold in the company. Noront had adopted a poison pill strategy to stop the takeover.听
BHP quickly saw an opportunity and聽offered C$0.55 per share of Noront, representing a premium of 129% to the firm鈥檚 closing price on May 21, a day before聽Wyloo鈥檚聽first proposal.听聽
Noront had recommended that shareholders accept BHP鈥檚聽friendly聽bid, but聽Wyloo聽came back聽last month聽with the聽sweetened offer聽of C$0.70 per share.听
At stake is聽Noront鈥檚聽early-stage Eagle鈥檚 Nest nickel and copper deposit in the 鈥楻ing of Fire鈥� in northern Ontario.听The asset聽has been billed by聽Wyloo聽as the聽largest high-grade nickel discovery in Canada since the Voisey鈥檚 Bay nickel find in the eastern province of Newfoundland and Labrador. 聽聽
Eagle鈥檚 Nest is expected to begin commercial production in 2026 with the mine running initially for 11 years.听
The mine鈥檚 start date has repeatedly been pushed back by Noront due to successive federal and provincial governments鈥� inability to consult and reach unanimous聽agreement with First Nations聽in the area.听
Clean metals hub
Wyloo Metals鈥� intention is to create a 鈥渨orld-class future metals hub鈥� in Ontario. The company has already committed to invest C$25 million in studies that will look at the potential to create a local battery metals supply chain in the Canadian province and the potential for a new ferrochrome plant.
Wyloo said the metals hub in the remote area known as the Ring of Fire would be developed in consultation with regional stakeholders and First Nations communities.
鈥淭he Ring of Fire is home to expansive deposits of these metals and is ideally located near downstream markets, presenting a once-in-a-generation opportunity to transform Canada into a critical metals powerhouse,鈥� the head of Wyloo Metals, Luca Giacovazzi, 鈥淥nly Wyloo Metals鈥� offer provides shareholders with the opportunity to share in that journey.鈥�
Without the support of Wyloo鈥檚 direct interest in Noront, a competing plan of arrangement could not be successful and a competing takeover bid would be unlikely to meet any minimum tender condition, the company noted.
Nickel production would need to increase聽nearly fourfold聽to meet expected demand for electric and hybrid vehicles, the company estimates. Likewise, copper output would also need to grow exponentially to meet demand from renewable power generation, battery storage, electric vehicles, charging stations and related grid infrastructure.听
Tesla boss Elon Musk has聽expressed worries聽about a聽looming nickel shortage. He聽pleaded with miners聽last year聽to produce more nickel, promising a 鈥済iant contract鈥� for supply produced efficiently and in an 鈥渆nvironmentally sensitive way.鈥澛�
罢丑别听贰痴听尘补办别谤听became involved in March in the development聽of the conflict-ridden New Caledonia聽nickel聽mine, as part of the company鈥檚 attempt to secure enough supply.听