NORONT AND BAOSTEEL RESOURCES SIGN BINDING TERM SHEET
May 16 2011 - 7:00AM
PR Newswire (Canada)
TORONTO, May 16 /CNW/ -- TORONTO, May 16 /CNW/ - Noront Resources
Ltd. ("Noront" or the "Company") (TSX Venture: NOT) is pleased to
announce that the Board of Directors of Baosteel Resources
International Co., Ltd. ("Baosteel"), part of The Baosteel Group,
one of China's largest steel producers, has approved the strategic
investment in Noront by way of a non-brokered private placement of
Units (the "Offering"). Noront and Baosteel have signed a
binding term sheet in respect of the strategic investment which
includes a termination fee of 5% of the total value of the Offering
payable by either Noront or Baosteel, in certain circumstances, if
the Offering is terminated. Noront anticipates the closing of the
Offering to occur on or about June 2, 2011. Noront's President and
CEO, Wes Hanson, notes, "Baosteel's investment in Noront
provides the necessary funds to advance the feasibility study on
both the Eagle's Nest nickel, copper, PGE deposit and the Blackbird
chromite deposits as well as allow Noront to maintain its project
schedule with planned production from Eagle's Nest commencing in
2015/2016. This initial investment lays the groundwork for a
long-term partnership that would provide key financial and
technical support to Noront. This includes access to China's
rapidly expanding stainless steel markets, knowledge in sales of
concentrates and technical assistance with the processing of
chromite for the production of ferrochrome." Under the terms of the
Offering, Noront will issue such number of shares as is equal to
9.9% of the total issued and outstanding common shares of Noront at
the time of closing at a price of C$0.86 per Unit. Each Unit
consists of one common share and one half of one common share
purchase warrant (each whole warrant a "Warrant"). Each Warrant
shall be exercisable to acquire one common share of Noront at an
exercise price equal to C$1.16 for a period of 24 months following
the closing date. Net proceeds of the common share portion are
anticipated to be approximately C$17.4 million. Exercise of the
Warrants would increase Baosteel's equity ownership interest in
Noront to 14.15%, with additional aggregate proceeds to Noront of
approximately C$11.7 million. The Offering provides Baosteel with
the right to nominate one individual to the Noront Board of
Directors, a right to increase their ownership in Noront to 19.9%
for a one year period commencing on May 2, 2012 and a standstill
provision which expires on May 2, 2013. Baosteel has also
been granted a 90 day exclusivity period to negotiate a direct
property interest and/or off-take agreement with respect to any of
Noront's properties with such exclusivity period to commence any
time prior to production at Noront's discretion. Proceeds from the
Offering will be used to: -- Fund the Eagle's Nest feasibility
study; -- Fund the feasibility study on the Blackbird chromite
deposit including exploration drilling to increase the current
resource; and -- Fund further exploration work on Noront's Ring of
Fire properties and corporate expenses. The Offering is subject to
customary conditions, including the completion of definitive
agreements and final approval by securities and regulatory
authorities in Canada and China, including the TSX Venture
Exchange. About Baosteel Resources International Co. Ltd.: Baosteel
Resources International Co. Ltd., headquartered in Hong Kong, is
the overseas headquarters of Baosteel Resources Co. Ltd., a
subsidiary of Baosteel Group Corporation, one of the largest and
most profitable steel enterprises in the world with an annual
production capacity of 50 million tons per year. Baosteel Group
Corporation ranked 276 in the Global Fortune 500 companies in 2010
with 2009 revenues of US$28.6 billion. Baosteel Resources
International Co. Ltd's core business is investment, trading and
logistic services in relation to iron ore, coal, non-ferrous
metals, stainless steel, raw materials and scrap. About Noront
Resources Ltd.: Noront holds mineral title to the largest area in
the Ring of Fire, an emerging multi-metals district in the James
Bay Lowlands of northern Ontario. With established NI-43-101
compliant mineral resources that include the Eagle's Nest Ni-Cu-Pt
and Pd deposit and the Blackbird chromite deposit, Noront is
committed to responsible exploration and development in the Ring of
Fire. Wesley (Wes) Hanson President & Chief
Executive 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. Forward-looking statements are
based on a number of material factors and assumptions, including,
the result of drilling and exploration activities, that contracted
parties provide goods and/or services on the agreed timeframes,
that equipment necessary for exploration is available as scheduled
and does not incur unforeseen break downs, that no labour shortages
or delays are incurred, that plant and equipment function as
specified, that no unusual geological or technical problems occur,
and that laboratory and other related services are available and
perform as contracted. Forward-looking statements involve
known and unknown risks, future events, conditions, uncertainties
and other factors which may cause the actual results, performance
or achievements to be materially different from any future results,
prediction, projection, forecast, performance or achievements
expressed or implied by the forward-looking statements. Such
factors include, among others, the interpretation and actual
results of current exploration activities; changes in project
parameters as plans continue to be refined; future prices of gold;
possible variations in grade or recovery rates; failure of
equipment or processes to operate as anticipated; the failure of
contracted parties to perform; labour disputes and other risks of
the mining industry; delays in obtaining governmental approvals or
financing or in the completion of exploration, as well as those
factors disclosed in the Company's publicly filed documents.
Although Noront has attempted to identify important factors that
could cause actual actions, events or results to differ materially
from those described in forward-looking statements, there may be
other factors that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking statements. Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. To
view this news release in HTML formatting, please use the following
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