• NORONT SEEKS PUBLIC DISCLOSURE BY FREEWEST AS TO THE REASONS FOR SETTING A RECORD DATE OF DECEMBER 10, 2009 AND WHETHER CLIFFS WILL BE ENTITLED TO VOTE ITS SHARES
• NORONT’S OFFER EXPIRES AT 11:59 PM ON FRIDAY, DECEMBER 11, 2009
Toronto, Ontario, December 9, 2009. Noront Resources Ltd. (“Noront” or the “Company”) (TSX Venture: NOT) requests Freewest Resources Canada Inc. (“Freewest”) to publicly disclose:
- The reasons for setting the record date of December 10, 2009 for its special meeting of shareholders on January 15, 2010, where a resolution to approve the December 3, 2009 plan of arrangement between Freewest and Cliffs Natural Resources Inc. (“Cliffs”) will be considered;
- Whether Freewest intends to permit Cliffs’ wholly owned subsidiary to vote the shares acquired as a result of the private placement announced in connection with its offer for Freewest ; and
- Why Freewest’s senior management and Board of Directors would agree to reduce the C$6.5m change of control payment due to senior management under the Cliffs deal to C$2.5m and not reduce those same payments under the Noront Offer or any other offer
Noront calls on Freewest to be transparent and to dispel the reasonable inference that it is employing tactics to limit its shareholders’ ability to make choices that are in their best interests.
Noront’s President and CEO Wes Hanson notes: “Freewest’s management appears to be purposefully employing defensive tactics to frustrate Noront’s Offer at the expense of Freewest’s shareholders. Noront’s Offer is a simple, unconditional offer predicated on the fact that Freewest shareholders should have the right to participate in any significant upside of the Ring of Fire.”
Additionally, Noront has asked the Director appointed under the Canada Business Corporations Act to consider whether any form of initial order sought by Freewest in connection with the special meeting is fair and reasonable in the circumstances of a pending takeover offer and that Cliffs be prevented from voting its Freewest shares at the special meeting of shareholders on January 15, 2010.
It does not appear to Noront that there is a legitimate purpose for Freewest to set the record date one day before Noront has the opportunity to take up shares tendered to its Offer. There is no urgency for the special meeting of shareholders to be held, nor the corresponding record date set as it has been; Freewest and Cliffs have until March 31, 2010 to hold a shareholder meeting. Freewest’s decision appears entirely a defensive tactic designed to assist in Freewest management’s opposition to Noront’s right to vote, as an owner, any shares it may own at the special meeting on January 15, 2010.
Voting of Cliffs Shares in Freewest
In a recent high profile ruling, with respect the combination of Hudbay Minerals Inc and Lundin Mining Corporation, the Ontario Securities Commission stated that “an acquirer should not generally be entitled, through a subscription for shares carried out in anticipation of a merger, to significantly influence or affect the outcome of the vote on that transaction”. Cliffs has increased its ownership in Freewest by way of a recent private placement. It should not be permitted to vote its shares at the special meeting of shareholders. Cliffs does not have the same economic interest as other Freewest shareholders and should not be permitted to influence the vote as a result of its opportunistic acquisition of additional Freewest shares.
Freewest Change of Control Payments
Mackenzie Watson stated in the December 8, 2009 shareholder conference call, “I will note that when Cliffs and Freewest entered into a definitive agreement on November 23, Freewest’s senior management agreed to reduce the change of control payments due to us from C$6.5 million to C$2.5 million. We did so to help secure a deal that we absolutely believe is in the best interest of Freewest and its shareholders. We did not initially advertise this part of the deal, but now we feel that it is necessary to set this record straight. In contrast, a deal with Noront would result in the full C$6.5 million in change of control payments to management.”
Noront believes that Freewest’s management and Board of Directors willingness to reduce these change of control payments in order to secure a deal with Cliffs is evidence that these payments are excessive and significantly out-of-line as Noront stated in its Offer to Purchase dated October 13, 2009. Further, Noront feels that by holding these payments in force under the Noront Offer, Freewest’s management and the Board of Directors are attempting to use these payments to lessen the value of the Noront Offer at the expense of Freewest’s shareholders.
Noront’s Offer for Freewest
Under the current Offer, for each seven (7) Freewest shares held, Noront will issue two (2) freely tradeable Noront shares and one (1) five-year (5) purchase warrant with a strike price of C$4.00. The implied value at the time of the offer was estimated to be C$0.86 per Freewest share and is currently valued at C$0.90 per Freewest share, based on the closing price of Noront’s shares on December 9, 2009.
Noront believes Cliffs’ Offer does not allow shareholders to continue to benefit from the exciting exploration potential of the Ring of Fire. Additionally, Freewest’s management has:
- Negotiated for themselves and at the expense of the of its shareholders, preferential treatment with respect to their options by receiving cash at a premium to the current Freewest share price;
- Undertaken a private placement from Cliffs at a discount to both of Cliffs’ offers; and
- Agreed to conditions with Cliffs, such as the break fee, and a timetable for completion that frustrates and hinders other potential competing offers.
Noront’s Offer expires at 11:59 p.m. on December 11, 2009. All Freewest shareholders are urged to tender their shares to the Noront Offer, the only offer that will provide all Freewest shareholders with the opportunity to partake in the upside of the Ring of Fire.
For more information on the Freewest Offer, please visit Noront’s website at www.norontresources.com or contact Noront’s Investor Relations Department at +1 (416) 367 1444. ext 126
To tender your Freewest shares, please contact;
Laurel Hill at Laurel Hill Advisory Group
North American Toll Free Phone: +1 (888) 882 6742
Outside North America, Banks and Brokers Call Collect: +1 (416) 637 4661
Noront Resources Ltd. is focused on its significant and multiple, high-grade nickel-copper-platinum-palladium, chromite, gold and vanadium discoveries in an area known as the “Ring of Fire”, an emerging multi-metals district located in the James Bay Lowlands of Ontario, Canada. Noront is the dominant land holder at the Ring of Fire and continues to delineate and prove up its discoveries with NI 43-101 technical and economic reports and an aggressive and well financed drill plan for the remainder of 2009 and 2010. All material information on Noront can be found on the Company’s website at www.norontresources.com or at SEDAR at www.sedar.com
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.
Wesley (Wes) Hanson
President & Chief Executive Officer