‘Ring of Fire’ asset sale descends into chaos – by Peter Koven (National Post – April 24, 2015)

The National Post is Canada’s second largest national paper.

The sale of prized chromite assets in Northern Ontario’s “Ring of Fire” mineral belt has descended into chaos, according to sources and court filings, with multiple bidders and dissenters and no certainty about the endgame.

The whole mess should be sorted out on Friday, when the Quebec Superior Court will listen to arguments and determine how the contested bidding process should proceed. Until recently, this process did not seem controversial in the least.

On March 23, Noront Resources Ltd. announced a deal to buy the chromite assets from Cliffs Natural Resources Inc. for US$20 million. Cliffs is making a much-publicized retreat from Canada, and sold the assets for a fraction of what it paid to acquire them.

The Noront deal was expected to close in mid-April. But on April 13, Cliffs received a $23 million rival bid for the assets, court filings show, which prompted another round of bidding and a disputed result. Additionally, four First Nations groups are contesting Noront’s takeover and told the Superior Court they are plotting their own bid. (Cliffs’ Canadian unit is currently in creditor protection, meaning everything is being done through the courts.)

The rival bid was made by a man named Mohammad Al Zaibak. He is best known as the co-founder of Teranet Inc., Ontario’s land registry system.

Al Zaibak, who did not respond to requests for comment, has no discernible mining experience. However, multiple sources believe he is working with Bill Boor, a former senior executive at Cliffs. Boor used to be in charge of Cliffs’ Ring of Fire development plans, meaning he is well-acquainted with the assets and the stakeholders. Two First Nations communities near the Ring of Fire are also backing Al Zaibak.

After Al Zaibak made his offer, Cliffs re-opened bidding and told both parties that they had until 5 p.m. on April 15 to submit final bids. Both Noront and Al Zaibak made new offers. Al Zaibak’s is worth $25.3 million, while Toronto-based Noront’s has not been disclosed.

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