Noront Resources

Toronto-based Rosseau Asset Management is proposing to replace the board of the junior, which set off a frenzy of staking and exploration activity last year with its Eagle One copper-nickel-platinum group elements find, in Ontario's James Bay lowlands.

Warren Irwin, Rosseau's president and chief investment officer, wouldn't comment on record on the reasons for the action, but referred to a circular issued today.

In it, the hedge fund company, which owns 9.2% of Noront's shares, accused management of wasting money and the company's first-mover advantage in the "Ring of Fire" area it discovered.

"Noront has squandered opportunities, wasted substantial monies on non-core properties, diluted its property interests through option agreements and made exaggerated claims that have never materialized," says the Rosseau circular.

Although Rosseau says it has faith in Noront's McFauld's Lake discovery, it says that an unfocused leadership and exploration strategy has led the company to dilute its resources with 11 different option agreements rather than focusing on its core project.

Its proposed new directors include: Irwin; Patrick Anderson, president and CEO of Aurelian Resources; Bruce Durham, chairman of Temex Resources; Joseph Hamilton, president of Pickax International; Keith McKay, chief financial officer of Aurelian; Thomas Obradovich, Independent Nickel; and Michael Woollcombe, partner in law firm Voorheis & Co.

In a press release, Noront management urged shareholders to re-elect the company's current board and reject Rosseau's proposal. The company said it had formed a special committee of independent directors to address Rosseau's concerns, but that Rosseau had rejected a compromise proposal for changes to the company's board and management.

"Noront's special committee and board of directors believes Rosseau's action is not in the best interests of Noront shareholders," Noront said in a statement. "It is an opportunistic attempt, in light of extraordinary recent market conditions, to obtain control of Noront through control of the board."

The company listed some of its accomplishments in the press release, including its aggressive exploration program in the McFauld's Lake area, new appointments to its board and management team, and a July 2008 resource estimate at its Eagle One deposit, which it says is rich enough to consider direct shipping of mineralized material.

A spokesperson for Noront said the company would be responding in detail to the charges in Rosseau's circular next week.

Noront stock was up 21¢ in late afternoon trading to $1.16 on the news on volume of 1.1 million shares. It has traded in a 52-week range of 90¢-$7.42. The company has 129.8 million shares issued.

A July 2008 technical report put indicated resources at Eagle One, part of Noront's Double Eagle property, at 1.8 million tonnes grading 1.96% nickel, 1.18% copper, 1.12 grams platinum per tonne, 3.91 grams palladium, 0.15 gram gold and 3.81 grams silver. The deposit also holds 1.1 million inferred tonnes averaging 2.39% nickel, 1.27% copper, 1.37 grams platinum, 4.5 grams palladium, 0.13 gram gold and 4.21 grams silver.