Freewest Battle

Finance

An aerial view of the 'ring of fire' area in Ontario

Publishing Date: 09 Dec 2009 10:11am GMT
Author: Mining Journal

The battle between Noront Resources Ltd and Cliffs Natural Resources Inc for Freewest Resources Canada Inc has reached boiling point. The two companies have each accused the other of providing false and misleading statements.

The two companies are fighting for control of platinum group metal and chrome resources as part of the 'ring of fire' area in Ontario.

Cliffs called on Freewest shareholders to “disregard false and misleading statements” made by Noront, an action the latter responded to with “dismay”.

Cliffs’ friendly offer for Freewest, in which it already holds a 12.4% interest, values Freewest at C$211 million, while Noront’s offer of 7 Noront shares for every 2 Freewest shares, plus a five-year warrant (at a price of C$4.00), would value the company at C$222 million.

Cliffs appears to have the upper hand, however, having received support for its offer from Freewest’s board of directors. The latter have unanimously recommended that shareholders do not tender their shares to the Noront offer; and vote for the Plan of Arrangement with Cliffs.