BHP makes recommended all-cash offer of C$0.55 per share for Noront

Toronto, Ontario/Melbourne, Victoria – BHP Lonsdale Investments Pty Ltd ("BHP Lonsdale"), a wholly owned subsidiary of BHP, and Noront Resources Ltd. (TSXV: NOT) ("Noront" or the "Company") today announced that they have entered into a definitive Support Agreement pursuant to which BHP Western Mining Resources International Pty Ltd (the "Offeror"), a wholly-owned subsidiary of BHP Lonsdale, will make a take-over bid to acquire all of the issued and outstanding common shares of Noront for C$0.55 per share in cash (the "Offer"). BHP Lonsdale owns 3.7% of the Noront shares on a fully diluted basis. The total equity value of the transaction is C$325 million (based on 100% of the fully diluted shares outstanding). The members of the Board of Directors of Noront who voted on the matter unanimously recommend that Noront shareholders tender their shares to accept the Offer.

The cash consideration of C$0.55 per share represents a premium of 129% to Noront's unaffected closing price of C$0.24 on May 21, 2021, the last trading day prior to the date that Wyloo Metals Pty Ltd. ("Wyloo") first publicly announced its intention to make an offer for Noront, and a 69% premium to Noront's closing price of C$0.325 on July 26, 2021, the last trading day prior to the announcement of this transaction. In addition, the C$0.55 per share Offer price is C$0.235 per share, or 75%, higher than the C$0.315 per share proposed by Wyloo in its announcement on May 25, 2021.

Noront CEO, Alan Coutts: "This transaction provides a significant premium to Wyloo's indicative offer, and crystallizes immediate and certain value through an all-cash offer. After careful consideration, Noront's Board of Directors, with input from its financial and legal advisors and the Special Committee, determined this offer is in the best interests of the company and shareholders. BHP has the financial strength, world-class mining expertise, and commitment to work in partnership with stakeholders to advance Eagle's Nest and the Ring of Fire, which has the potential to deliver benefits to local communities, First Nations, and Ontario for years to come."

BHP Chief Development Officer, Johan van Jaarsveld: "We are pleased that the Noront board has seen the value in our offer and has recommended it to its shareholders. This is a win-win for both BHP and Noront shareholders. For BHP, the acquisition of Noront presents a world-class growth option, in a key future-facing commodity. The highly prospective Eagle's Nest nickel project provides an excellent platform from which to develop further opportunities in Ontario's Ring of Fire. For Noront shareholders, this offer recognizes and realizes the full value of Noront's portfolio, delivering guaranteed shareholder returns in the near term. We are excited to bring our mining expertise and capabilities to develop these long-term opportunities. We look forward to working in constructive partnerships with First Nations peoples, government and communities to realize the untapped potential of these important resources."

Reasons to accept the Offer

• Compelling premium. The Offer represents a 69% premium to the closing price of C$0.325 per Noront share on the TSXV on July 26, 2021 (the last trading day prior to the announcement of the Offer) and a 129% premium to the closing price of C$0.24 per Noront share on the TSXV on May 21, 2021 (the last trading day prior to the announcement by Wyloo of its intention to make an offer to acquire the Noront shares). The Offer represents a 75% premium to Wyloo's proposed offer price of C$0.315 per share.
• Liquidity and certainty of value. The Offer immediately crystalizes full and certain value by providing for 100% cash consideration for the Noront shares, giving depositing shareholders certainty of value and immediate liquidity while removing financing, market, regulatory and execution risks to shareholders. Shareholders who deposit their Noront shares under the Offer will have the opportunity to realize cash proceeds and certainty of value for their shares.
• Unanimous recommendation of the Noront Board. The members of the Noront Board of Directors who voted on the matter have, after consultation with the Board's financial and legal advisors and the Special Committee of the Board, UNANIMOUSLY DETERMINED that the Offer is in the best interests of Noront and the Offer price is fair, from a financial point of view, to Noront shareholders and, accordingly, UNANIMOUSLY RECOMMENDED that shareholders ACCEPT the Offer and DEPOSIT their Noront shares under the Offer.
• Support of shareholders. Certain Noront shareholders, including certain directors and each officer of Noront, have entered into lock-up agreements pursuant to which they have agreed to deposit under the Offer all Noront shares held or to be acquired by them pursuant to the exercise of options or share awards, representing in the aggregate approximately 9.9% of the issued and outstanding Noront shares on a fully-diluted basis, subject to certain terms and conditions of such agreements.
• Minimum tender condition. In order for Noront shareholders to be able to receive the Offer price for their shares, more than 50% of the outstanding Noront shares not beneficially owned or controlled by BHP Lonsdale, the Offeror or any other person acting jointly or in concert with the Offeror must be deposited under the Offer prior to the expiry of the initial deposit period. Shareholders increase the likelihood of receiving the Offer price by depositing their shares under the Offer prior to the expiry of the initial deposit period.
• Project execution and development risk. BHP Lonsdale believes that the Offer provides Noront shareholders with the value inherent in Noront's portfolio of projects, including the Eagle's Nest project, without the long-term risks associated with the development and execution of those projects. Given the relatively early stage of Noront's projects, it will be several years before the Eagle's Nest project or other projects in the portfolio reach commercial production, if at all.
• Significant growth funding required. Noront's development and exploration projects have significant funding requirements to bring them to the production stage. Noront currently has limited cash to fund the necessary capital projects and near-term debt maturities, which will be a further drain on cash. Equity financing sufficient to repay debt and fund the progress of Noront's business plan, if available, may be significantly dilutive to Noront shareholders.
• Search for the best alternative. Following Wyloo's announcement on May 25, 2021 of its intention to make an offer for the Noront shares, the Special Committee had the opportunity to consider strategic alternatives available to Noront, including, among other alternatives, maintaining the status quo as a publicly-traded company, and the Special Committee and the Noront Board ultimately determined on July 26, 2021 to support the Offer.
• TD Securities fairness opinion. TD Securities Inc. provided the Noront Board of Directors with a verbal opinion to the effect that, as of the date of such opinion, subject to the assumptions, limitations, and qualifications which will be set out in the written opinion, the Offer is fair, from a financial point of view, to Noront shareholders (other than BHP Lonsdale and its affiliates).
• Stifel independent fairness opinion. Stifel Nicolaus Canada Inc. ("Stifel"), who is also acting as independent valuator engaged to prepare a formal valuation of the Common Shares in connection with the proposed Wyloo bid, provided the Special Committee and the Noront Board of Directors with a verbal opinion to the effect that, as of the date of such opinion, subject to the assumptions, limitations, and qualifications which will be set out in the written long form opinion, the Offer is fair, from a financial point of view, to Noront shareholders (other than BHP Lonsdale and its affiliates).
• Fully financed cash offer. The Offer is not subject to a financing condition. The Offeror will satisfy the funding requirements of the Offer from its cash resources.

Transaction details

The Offeror intends to formally commence the take-over bid by mailing a take-over bid circular to shareholders shortly after this announcement. The bid will initially be set to expire 105 days after commencement. Noront has agreed to issue a deposit period news release upon request from the Offeror to reduce the initial deposit period to as few as 35 days from commencement, a right which the Offeror currently intends to exercise. The Offeror will ensure that there remain at least 10 days prior to the end of the initial deposit period at such time as it exercises its right to shorten the initial deposit period.

The Board of Directors of Noront, acting on the recommendation of the Special Committee, and after evaluating the Offer in consultation with Noront's legal and financial advisors, has determined that the Offer is fair, from a financial point of view, to Noront shareholders and in the best interests of Noront and Noront shareholders. As such, the Board of Directors of Noront is recommending that Noront shareholders tender their shares and accept the Offer.

The Offer is conditional upon, among other closing conditions, there having been deposited pursuant to the Offer and not withdrawn at the expiry of the initial deposit period more than 50% of the Noront common shares then outstanding, excluding the Noront common shares beneficially owned, or over which control or direction is exercised, by BHP Lonsdale, the Offeror and any other person acting jointly or in concert with the Offeror. BHP Lonsdale owns 21,659,385 Noront common shares, representing approximately 4.7% (or 3.7% on a fully diluted basis) of the outstanding common shares.

Shareholders holding an aggregate of 9.9% of the Noront common shares on a fully diluted basis, including certain Noront directors and senior management, have entered into lock-up agreements under which they have agreed to deposit their shares under the Offer.

The Support Agreement provides for, among other things, a non-solicitation covenant on the part of Noront (subject to customary fiduciary out provisions). The Support Agreement also provides the Offeror with a right to match any competing offer which the Noront Board of Directors determines to be a superior proposal.

The Offeror is entitled to a termination payment of C$13.0 million (equal to 4.0% of the total equity value of the transaction based on 100% of the fully diluted shares outstanding) if the Support Agreement is terminated in certain circumstances, including if Noront enters into an agreement with respect to a superior proposal, or if the Board of Directors of Noront withdraws or modifies its recommendation with respect to the Offer.

Fairness opinions

The Noront Board of Directors received a verbal opinion on July 26, 2021 from TD Securities Inc., Noront's financial advisor, as to the fairness as of the date of such opinion, from a financial point of view, of the C$0.55 per share cash consideration offered pursuant to the Offer to holders of Noront common shares (other than BHP Lonsdale and its affiliates).This opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, which will be more fully described in the written opinion to be provided by TD Securities Inc. and included in the Noront directors' circular.

The Noront Board of Directors and the Special Committee also received a verbal opinion on July 26, 2021 from Stifel, who is also acting as independent valuator engaged to prepare a formal valuation of Noront in connection with the proposed Wyloo offer, as to the fairness as of the date of such opinion, from a financial point of view, of the C$0.55 per share cash consideration offered pursuant to the Offer to holders of Noront common shares (other than BHP Lonsdale and its affiliates). This opinion was based on and subject to the assumptions made, procedures followed, matters considered and limitations and qualifications on the review undertaken, which will be more fully described in the written long-form opinion to be provided by Stifel and included in the Noront directors' circular.

Additional information regarding the Offer will be included in a take-over bid circular which will be mailed to Noront shareholders shortly, and in the Noront directors' circular, which will be mailed to Noront shareholders no later than August 11, 2021. These materials, as well as the Support Agreement, will also be available under Noront's profile on SEDAR at www.sedar.com, and on Noront's website at www.norontresources.com.

How to tender Noront shares

Only those who tender their shares will receive the cash consideration of C$0.55 per share. To tender Noront shares today please visit www.noronttender.ca.