Franco-Nevada royalty over Black Thor and other Noront chromite deposits

On March 23, 2015, Noront Resources Ltd. (Noront) entered into an agreement to acquire, among other things, the shares of Cliffs Chromite Ontario Inc. (CCOI) and Cliffs Chromite Far North Inc. (CCFNI), both indirect wholly owned subsidiaries of Cliffs Natural Resources Inc. (Cliffs), which hold mining claims in the Ring of Fire mining district. The acquisition was completed for a purchase price of US$27.5 million pursuant to an Approval and Vesting Order granted by the Quebec Superior Court on April 28, 2015.

To finance the transaction, concurrently with the execution of the share purchase agreement—pursuant to which Noront acquired the shares of CCOI and CCFNI from certain subsidiaries of Cliffs, including Cliffs Quebec Iron Mining ULC (CQIM)—Noront entered into a loan agreement with Franco-Nevada Corporation (Franco-Nevada) through which Franco-Nevada loaned US$25 million to Noront for a five-year period at a 7% interest rate with interest to be accrued and paid at the end of the loan term. In return, Franco-Nevada received a 3% royalty over the Black Thor chromite deposit and a 2% royalty over all of Noront's property in the region with the exception of the Eagle's Nest deposit, which was excluded. The loan is secured against the CCOI and CCFNI assets acquired in connection with the acquisition. In addition, Noront received US$3.5 million in cash consideration from Franco-Nevada as part of the granting of the royalty arrangements. The loan proceeds and a portion of the royalty payment were used to fund the acquisition price of the transaction.

Further information can be found on Noront's website.

Noront is focused on development of the high-grade Eagle's Nest nickel, copper, platinum and palladium deposit and the high-grade Blackbird chromite deposit, both of which are located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire.

Franco-Nevada is a gold focused royalty and stream company with additional interests in platinum group metals and other resource assets.

Cliffs is a leading mining and natural resources company in the United States.