Agoracom Blog

BREAKING NEWS – The Latest And Biggest Battle For A Canadian Junior Resource Company

Posted by AGORACOM at 1:29 PM on Thursday, October 9th, 2008

Fresh off the heels of the battle for control of Aurelian Resources, in which Aurelian shareholders used their community on AGORACOM to launch a massive campaign against a “friendly bid” by Kinross Resources, the Canadian junior resource market is once again embroiled in what may be the mother of all battles for Noront Resource (NOT: TSXV).

(FULL DISCLOSURE: Noront Resources Is An AGORACOM Client)

Noront Resources has been the sector darling over the past 12 months, including being named to the 2008 TSX Venture 50, a ranking of Canada’s top emerging public companies listed on TSX Venture Exchange. Within the TSX Venture 50, Noront Resources was the #1 ranked company in the mining category.

Noront achieved much of its success and notoriety following the September 2007 discovery of a high-grade deposit of nickel, copper, platinum and palladium in the McFaulds Lake area in the James Bay Lowlands.  The discovery created a surge of staking and exploration in the area, which is now commonly referred to as the “Ring Of Fire”.

Rosseau Asset Management Ltd. Proposes To Replace Noront’s Board At Upcoming AGM

Rosseau, a hedge fund,  issued this press release at 7:30 AM today, advising it would be running its own slate of directors at the upcoming Noront AGM.  You can review the reasons but it basically states “we can do better”.

In a huge twist of irony, the Rosseau press release names Patrick Anderson as one of the slate members.  That’s right, the CEO of Aurelian Resources that many shareholders believe gave away the world’s best gold find over the last 20 years to Kinross Gold (please review links at the top of the page).

With respect to share ownership, Rosseau its officers and employees collectively own or control a total of 11,912,901 common shares of Noront, representing approximately 9.2 per cent of the common shares of Noront entitled to be voted at the meeting.  However, I think it is fair to assume that Rosseau has already spoken to other shareholders sharing their views.


As expected, Noront Resources issued this press release shortly after 11 AM, advising shareholders to vote against the Rosseau slate.  What was both surprising and a rallying point for Noront shareholders is the fact that Noront attempted to avoid a proxy battle and address Rosseau concerns:

“In an effort to avoid the cost and dislocation to all Noront shareholders that
would inevitably accompany a proxy fight, the Special Committee sought to
address Rosseau’s concerns and attempted to negotiate a compromise position
that would result in a more balanced Board of Directors than the slate of directors
suggested by Rosseau. Rosseau rejected Noront’s compromise proposal and
has commenced its proxy fight with the filing of the Dissident’s Circular.”


Despite Noront’s best and reasonable efforts, Rosseau balked and went ahead with its plans.  This clearly puts Rosseau’s motives in question, unless the Rosseau group wants investors to believe the entire current board and management team was worth jettisoning.

I’m a reasonable guy and just as interested as any shareholder to maximize the value of our 175,000 shares – but I’ve watched this team build Noront to where it is today, so don’t try selling shareholders on them suddenly being useless.  Especially not under the guise of “enhancing value for the benefit of all shareholders of Noront.” The sector is weak, Noront’s share price is weak and you are moving in for the kill. I can respect that – but call it what it really is.

As such, in a post made earlier today but prior to seeing Noront’s press release, I stated as follows:

“…can you trust (Patrick) Anderson with Noront? Do you want to risk seeing Noront
lipped into a bigger company for a song? In my opinion, this is nothing more
than an opportunist move on Noront by people interested in getting their hands
on yet another incredible world-class project. It has nothing to do with creating
shareholder “value” for indiviudal shareholders. Their prosperity will come first. Period.”

Evidently, Noront saw things the same way once it was clear that Rosseau had no interest in negotiating a compromise – and stated as much in its press release:


The press release rallied Noront Resources investors who, by an overwhelming majority, are up in arms and rallying against the Rosseau plan.  I wish I could provide you with examples but there have been well over 450 posts made on the Noront Discussion Forum since 7:30 AM and climbing by about 1 per minute.  Yes, some are unhappy with the company’s share price performance over the last few months but many acknowledge that much of this is attributed to general market weakness that should not affect the long-term value of Noront’s projects.

With the AGM less than 3 weeks away, this promises to be yet another example of shareholder activism 2.0.  This time, however, shareholder and management interests are aligned against an uninvited guest.


4 Responses to “BREAKING NEWS – The Latest And Biggest Battle For A Canadian Junior Resource Company”

  1. […] October 9th, the most recent and biggest battle for a Canadian junior resource company – Noront Resources – commenced.  As the company’s investor relations firm, we went to work […]

  2. mustangman (Larry) says:

    Well I think the ARU fiasco has to scare people enough into not wanting the Rosseau Fund to be running the administrative branch of Noront now or in the future. My worry isn’t only Rosseau but the possible control that would likely be linked to Pinetree Capital and its CEO. Lets face it Pinetree is having major SP declines since the 2006 insider trading investigation of its CEO. The stock was sitting below 1.00 as of last week (not sure what it is today). I’m afraid there are too many personal egos at work here trying to get a quick piece of Noront’s shareholders action. It’s their profession to get the best return for their clients. If I was a client of these investment firms I would be thinking twice of why I invest with them.

    For example. Look at Aurelian Resources and the fiasco there. The poor longstanding retail shareholders, who saw this play move from pennies to near 10.00 were no doubt jubilant in their 10 and 20 bagger returns (providing they sold at 10.00). Now we had the same here with Noront (NOT.V). Its the poor investors that got in at the 5.00 to 10.00 range that have nothing to win and everything to lose by the deal struck with ARU. The same likely would hold true with NOT.

    Note the tonnage numbers (gold) from the ARU 2007 re-statement:

    “Aurelian Resources Inc. is a publicly-listed (TSX:ARU) company engaged in exploring, discovering and developing mineral wealth in Ecuador. The Fruta del Norte (FDN) discovery lies at the heart of the Condor Project, located in south-eastern Ecuador. The initial Inferred Resource for FDN was released in October 2007 and included 58.9 million tonnes grading 7.23 g/t gold and 11.8 g/t silver for 13.7 million ounces of contained gold and 22.4 million ounces of contained silver (Report titled “A Mineral Resource Estimate for the Fruta del Norte Deposit, Cordillera del Condor Project, Zamora-Chinchipe Province, Ecuador” and dated November 15, 2007 filed on Visit for more information. ”

    This baby was going to go….as is Noront. And what then happens. Kinross just walks in and takes the ball from the private shareholders (of course I am guessing the other funds no doubt have a lot of Kinross shares, even without looking at thier sheets), paying off the puppet management team and then taking the reins.

    What makes these two horror stories so simiilar. DRASTIC STOCK PRICE REDUCTION

    ARU dropped suddenly in April 2008 due to the closing of the Ecuador Mines by the Ecuadorian governement. Their biggest asset was now unattainable and their stock price plummetted overnight by over 50%. The price only regained a small amount before the installation of new management and the ensuing Kinross takeover. I guess the question was..and I can’t answer it….did the ARU Ecauadorian Mine have any light at the end of the tunnel to re-open. If not then their biggest money making mine was likely to be put on hold for an extended period of time. I am not fully updated as to what happened here and would love an ARU investor to put me right where I have errored in my history.

    The bottom line for Noront: The same thing….great intial results…investor euphoria and herding in September 2007. Then…..less spectaculor news and the price droops significantly…then the soft bashing…then the Feb 08 ecomomic burp which put it down into the 2.75 range. Then comes the “EAGLE 2 has landed” the price zooms back up to the 7.50 range and then….is pushed back down to where we are now….. All the Chromite in the world hasn’t pushed the price back up…..and now the market has dropped us lower than the last major low in Feb 08. We are in a position for the Hedgies to play management roulette with us. WE MUST VOTE AND PREVENT THIS FROM HAPPENING. Those who bought Noront shares over 3 and 4 dollars may have the most to lose if this hostile management takeover bid succeeds.

    In addition to what I’ve noted and what has been said too many times to mention on the ARU and NOT boards regarding Rosseau and Mr Anderson…..I would personally like to have their people provide me and the other investors in Noront a history of their management takeovers indicating where the management changeover took place (what price and what phase of development) and where they got off the boat (sold, got voted out etc). I would like to see where they have held LONG……in their control of the newly managed company. I would like to see where they got off the boat and how in each case. Until I see that they have worked with the “entire” investment community within that company…I will NEVER deal with them and will fight them in every way I can to keep them out of Noront. Trust me….all other Noront shareholders (including those voting for Rosseau who may think a change is good) must put this zigsaw puzzle into complete perspective prior to considering in any way some possible advantage to the removal of our management team who have been proven to be dedicated hard working individuals…and having them replaced by those who aren’t IMHO dedicated to the company and its shareholders in any way, shape or form.



  3. baz says:

    As was evidenced by ARU shareholders,now NOT holders face the same enemy.Patrick Anderson used every trick to MINIMISE shareholder value so as to make it cheaper for K to walk in,while padding their accounts with options,warrants etc…..Make no mistake this is what will happen to NOT if they succeed…VOTE for the current BOD.
    Dont let the snakes in………baz

  4. ron smith says:

    Good post! Members must resist as SPQ shareholders did to stop reverse split a couple of months ago.
    Shareholders must be knowledgeable about this “raiders” tactics and poor results for shareholders when dust settles
    and they get left crumbs while the big guys get even bigger.