BHP (ASX:BHP) share price on watch after announcing Ring of Fire acquisition

The Big Australian is adding to its nickel exposure…

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Looking down on two African workers shaking hands over an agreement in an open pit mine.

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The BHP Group Ltd (ASX: BHP) share price could be on the move on Wednesday.

This follows the announcement of a potential acquisition this morning.

What did BHP announce?

The Big Australian has announced that it has made a recommended all-cash offer to acquire all the issued and outstanding common shares of Noront Resources for C$0.55 per share. This values Noront Resources’ equity at C$325 million.

The offer is also a significant premium to one which Noront Resources received in May from Twiggy Forrest’s Wyloo Metals of C$0.315 per share.

Positively, BHP and Noront have entered into a definitive support agreement, whereby Noront has agreed to support the takeover bid.

What is Noront Resources?

Noront Resources is a Canadian based mining company, listed on the TSX Venture Exchange.

The release explains that it is focused on the development of its high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and chromite deposits. This includes Blackbird, Black Thor, and Big Daddy, all of which are located in the James Bay Lowlands of Ontario in an emerging metals district known as the Ring of Fire.

BHP’s Chief Development Officer, Johan van Jaarsveld, commented: “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,” he added.

“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,” van Jaarsveld concluded.

The BHP share price is up 24% in 2021.

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