Monsters of Rock: M&A heats up as BHP offers 213pc premium to outbid Twiggy on Noront
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The nickel war between Fortescue billionaire Andrew Forrest and BHP (ASX:BHP) has taken a new twist after the world’s biggest miner flexed its muscle by immediately upping the stakes in their fight over Canada’s Noront Resources.
Before the takeover stoush began you would have been forgiven for not knowing much about Noront, which holds a dominant ground position in Ontario’s Ring of Fire mining district.
BHP’s new C$0.75 a share bid came just a day after Twiggy formalised a $0.70/share offer at a whopping 213% premium above Noront’s TSX share price before this whole thing began.
The ball is now in Twiggy’s court. BHP’s bid has been accepted by Noront, and only needs 50% of the votes in the company to accept it to pass, meaning Twiggy’s company Wyloo Metals can’t use its ~36% holding in Noront as a blocking stake.
The all cash bid values Noront at around C$400 million, chump change for BHP but a sure sign that takeover premiums are beginning to emerge at this stage in the mining cycle.
Evolution Mining (ASX:EVN) beat its production and all in sustaining cost guidance in a solid September Quarter to get its financial year off to a good start.
Australia’s third largest gold miner produced 170,681oz at $1413/oz, outstripping its guidance of 155,000-167,000oz at $1450/oz.
All in costs were considerably higher at $2038/oz once growth capital was taken into account, with Evolution selling its bounty at a margin of $326 per ounce, delivering group cash flow of $30.2 million.
It focus now is on bedding down the Mungari operations near Kalgoorlie in WA, where it paid $400 million to incorporate Northern Star’s (ASX:NST) Kundana operations.
Evolution is also progressing the $380 million development of the underground operation at Cowal, which was approved last month by the New South Wales Government and is aiming to improve its Red Lake operations in Canada.
Speaking on a conference call this morning, Evolution bosses downplayed the impact of labour and Covid-19 supply chain costs, blamed by a number of mining companies for operational issues, on its business.
Evolution’s Sydney based executive chairman Jake Klein said one thing that was concerning him was long wait times to get core back from assay labs.
“Probably one thing that (VP of exploration) Glenn (Masterman) is certainly sick of me contacting him about, previously via phone call or Teams, now that we’re getting back to the office in person is assay results from this good looking core that he tells me about,” Klein said.
“And then I keep hammering on about it, we got have we got the assays yet? Assays are a bottleneck for sure.”
The Materials Index, up 0.21% today as the ASX 200 rose by 0.53%, with few standouts aside from $1.6 billion-capped lithium explorer Vulcan Energy (ASX:VUL), which closed up 4.55%.