Noront Resources announces take-over bid for Freewest Resources
- Noront's Offer of one (1) Noront share for four (4) Freewest shares represents an implied offer price of C$0.3975 per share and a 51% premium to Freewest Resources' 30-day volume-weighted average price ("VWAP"). - The transaction allows all shareholders to benefit from Noront's high-grade nickel, copper, PGM Eagle's Nest discovery, while simultaneously consolidating the chromite discoveries made by both companies. - Noront's established, well-funded development team is mandated to aggressively explore and develop the Ring of Fire. Symbol: NOT:TSX-V Shares Outstanding: 163,631,957 Fully Diluted: 173,461,957
Highlights of the Offer
- Based on the number of fully diluted Freewest common shares, as publicly disclosed, Noront will issue under the Offer approximately 57 million common shares (equivalent to 27% of the enlarged Noront) to Freewest shareholders. - Our Offer extends to all Freewest common shares that are currently issued and outstanding or may be issued prior to the expiry of the Offer, upon conversion, exchange or exercise of any Freewest securities or entitlements. We anticipate that by their terms the outstanding convertible securities of Freewest will, if our Offer is successful, become securities convertible into Noront common shares based on the Exchange Ratio. - Based on the closing price of Noront's common shares on October 2, 2009, the implied offer price represents a premium of approximately 26% and 51% based on the latest closing price on October 2, 2009 and on the 30-day VWAP to the same date of Freewest's common shares, respectively. - Noront has a thorough understanding of the potential of Freewest's Ring of Fire discoveries and other assets and believes that the Exchange Ratio and implied premium offered represents full and fair value to Freewest shareholders.
Ring of Fire Consolidation
The acquisition of Freewest will allow the respective shareholders to benefit from the consolidation of the exploration and development potential of the Ring of Fire and the rationalization of activities, paving the way for the sharing of essential infrastructure and logistics. This will result in the capture of synergies between both companies' chrome deposits and Noront's high-grade Eagle's Nest nickel, copper and PGM deposit. Additionally, the combination of the two companies offers Freewest shareholders the benefits of an established, well-funded development team mandated to aggressively explore, and ultimately develop the Ring of Fire in the optimal and least dilutive manner.
Offer Overview
It was Noront's intention to proceed with a friendly Offer. On
Noront's Offer is not a Permitted Bid for the purposes of the Freewest shareholder rights plan. Accordingly, in order for the Offer to proceed, the shareholder rights plan must be terminated or action must be taken by the Freewest board of directors or by a securities commission or court of competent jurisdiction to remove the effect of the shareholder rights plan and permit the Offer to proceed.
Details of the Offer
Full details of the offer will be contained in a formal offer and take-over bid circular to be filed with security regulatory authorities and mailed to Freewest shareholders. Noront expects to formally launch the Offer as soon as practicable and the Offer will remain open for at least 35 days following the commencement of the Offer.
Noront will formally request from Freewest a list of shareholders for the purpose of disseminating the Offer documents to such holders and expects to mail the take-over bid circular and corresponding Offer documents to Freewest's shareholders as soon as reasonably practicable, following receipt of the shareholder list. The Offer will be open for acceptance for 35 days.
The Offer will be subject to certain customary conditions of completion, including:
- That a minimum of 66 2/3% of the outstanding common shares of Freewest on a fully diluted basis are tendered to the Offer; - Receipt of all necessary regulatory approvals, including the approval of the TSX Venture Exchange; - Absence of any material undisclosed litigation or liabilities; - Absence of any material and adverse changes; - The absence of certain prohibited activities on the part of Freewest (including share issuances, material debt issuances, acquisitions and dispositions) between the date hereof and the expiry of the Offer; - No untrue statements or omissions in Freewest's public disclosure; and - Other usual and customary conditions of offers of this type.
Additionally, Noront will require that the Freewest shareholder rights plan shall have been waived, invalidated or cease traded.
Currently, Freewest has in place certain management change of control payments, including a one-time payment of C$4,000,000 payable to
Noront has engaged Rothschild as financial advisor and deal manager and Fraser Milner Casgrain LLP as legal counsel in connection with the Offer.
This press release does not constitute an offer to buy or sell, or the solicitation of an offer to buy or sell, any of the securities of Freewest. Such an offer can only be made pursuant to an offer to purchase and accompanying offering circular filed with the securities regulatory authorities in
About Noront:
Noront Resources is focused on its significant and multiple, high-grade nickel-copper-platinum-palladium, chromite and vanadium discoveries in an area known as the "Ring of Fire", an emerging multi-metals district located in the
Wesley (Wes) Hanson President & Chief Financial Officer
FORWARD LOOKING STATEMENTS
This release contains "forward-looking statements" within the meaning of applicable Canadian securities legislation, including predictions, projections and forecasts. Forward-looking statements include, but are not limited to, statements that address activities, events or developments that the Company expects or anticipates will or may occur in the future, including such things as future business strategy, competitive strengths, goals, expansion, growth of the Company's businesses, operations, plans and with respect to exploration results, the timing and success of exploration activities generally, permitting time lines, government regulation of exploration and mining operations, environmental risks, title disputes or claims, limitations on insurance coverage, timing and possible outcome of any pending litigation and timing and results of future resource estimates or future economic studies.
Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "planning", "planned", "expects" or "looking forward", "does not expect", "continues", "scheduled", "estimates", "forecasts", "intends", "potential", "anticipates", "does not anticipate", or "belief", or describes a "goal", or variation of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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For further information: regarding this Offer, please contact Wes Hanson, President and Chief Executive Officer or Joanne Jobin, Vice President Corporate Communications at (416) 367-1444, or visit Noront's website at: http://www.norontresources.com
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