Today, Australian mining giant BHP Group announced it made a $258.45 million offering for Canadian-based Noront Resources; thus, rivaling an offer from Australian mining billionaire Andrew Forrest’s Wyloo Metals for the nickel-copper miner.
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Why the offerings?
According to Reuters, these offerings for Noront underscore the race to secure supplies of battery metals among miners; particularly, ahead of an expected surge in demand due to the rise of electric vehicles.
BHP’s offer also comes after the mining giant moved its exploration headquarters to Canada. Thus, VHP Group said it would almost double exploration spending for base metals within five years.
In fact, Noront Resources owns the early-stage Eagle’s Nest deposit, billed as the most extensive high-grade nickel discovery in Canada. Mainly since the Voisey’s Bay nickel find in the eastern province of Newfoundland and Labrador; for instance, with an initial mine life of 11 years.
Comments at BHP Group and other considerations
Therefore, BHP said on Tuesday its offer valued Noront at C$0.55 per share; thus, representing a premium of 129% to the firm’s closing price on May 21; indeed, a day before Wyloo unveiled its proposal.
In this regard, BHP Chief Development Officer, Johan van Jaarsveld, said in a statement; “For BHP, the acquisition of Noront presents a world-class growth option, in a key future-facing commodity.”
On the other hand, Noront said its board recommended the Anglo-Australian company’s offer.
Indeed, and it is worth noting, Wyloo Metals, Noront’s top shareholder with a 23% stake as of December, had in May offered C$0.315 per share; specifically for the stock, it did not already hold in the company.
