Noront will place 21.66 million shares at 28.3c each to raise gross proceeds of about C$6.1 million.
On May 25, about 23% shareholder Wyloo announced its intention to make an offer for Noront and indicated that it would make available a C$5 million convertible loan to its takeover target.
Noront will place 21.66 million shares at 28.3c each to raise gross proceeds of about C$6.1 million
Noront said that its board, with the input of external advisers, had determined taking on additional debt was not advisable for a development company that did not generate operating revenue.
Noront also pointed out Wyloo was not permitted to start a takeover bid until an independent valuator has completed a formal valuation of Noront’s assets, something only expected to happen in the coming weeks.
Under an investor rights agreement between Noront and Wyloo, Wyloo would be entitled to acquire common shares to maintain its pro-rata equity interest in the company calculated on a partially-diluted basis. If Wyloo exercises its top-up right in total, an additional 12.53 million shares would be issued to Wyloo Canada for additional gross proceeds of C$3.5 million.
Baosteel Resources also has a top-up right, which, if exercised in full, could result in an additional 1.96 million shares being issued for $550,000.
Wyloo is owned by Tattarang, a holding company for Australian billionaire Andrew Forrest’s family interests.
Wyloo currently holds a 23% stake in Noront, a $15 million convertible loan maturing at the end of September, and a 1% net smelter return (NSR) royalty on Eagles Nest, acquired from Resource Capital Funds in December. Its proposed offer of $133 million for the remaining Noront shares represents a 31% premium, based on the junior’s trading price as of May 21.
Wyloo had not yet made an official offer, prompting Noront to implement a shareholders’ rights plan, effective May 26, to protect it against creeping bids and ensure all shareholders are treated fairly.
Wyloo has previously outlined a plan to create a “world-class Future Metals hub” in the Canadian province starting with a commitment to invest C$25 million in studies that will look at the potential to create a local battery metals supply chain in the province and the potential for a new ferrochrome plant.
