Noront Resources Ltd. raised its hostile takeover bid for Freewest Resources Monday, leaping over a rival bid from American Cliffs Natural Resources Inc. .
Noront said its "final offer" will see it issue two Noront shares and a five-year purchase warrant with a strike price of $4 for every seven Freewest shares held.
The new deal would value Freewest at $222-million or 86 cents per share, based on the Friday closing price of Noront shares, the company said.
Freewest would hold 27 per cent of the combined company
Last week, Freewest management said it supported an all-stock bid from Cliffs that valued Noront at $150.6-million or 70 cents per Freewest share, based on the public stock prices at that time.
Cliffs also said it would spin off Freewest's non-chromite assets into a separate company, to keep the Freewest name and management, while preparing to use three chromite proprieties in northern Ontario for a new mining operation.
Cliffs already has a minority stake in Freewest and said it had accelerated its efforts to make an offer after Noront publicly announced its initial takeover bid.
Noront said Monday that Freewest's management "has failed its shareholders" by supporting the Cliffs' offer. It added that its increased offer would expire Dec. 11. All previous conditions on its original offer have been waived.
Noront said a merged Noront-Freewest would allow for aggressive exploration of assets in the so-called Ring of Fire region in the James Bay Lowlands of Ontario, something which cannot be done as well with the Cliffs' offer.
Noront is a miner focused on nickel-copper-platinum-palladium, chromite and vanadium discoveries in Ontario's Ring of Fire region.
Noront shares closed at $2.25 on Friday while Freewest shares stood at 64 cents Friday on the TSX Venture Exchange.