* Cliffs bidding C$1/shr, values Freewest at C$240 mln
* Ciffs, Noront want Freewest's chromite deposit
* Freewest shares up 10 pct at C$0.97/shr
TORONTO, Dec 10 - Cliffs Natural Resources (CLF.N) raised its friendly takeover offer for chromite explorer Freewest Resources (FWR.V) for the second time in a week on Thursday in an attempt to triumph over rival bidder Noront Resources (NOT.V).
Cliffs is now offering C$1 a share -- valuing Freewest at about C$240 million ($228 million) -- which is up 11 percent from its most recent bid a week ago, and more than 2-1/2 times the 39.75 Canadian cents a share that Noront offered on Oct. 5, when it began what has become a heated bidding war.
Freewest's shares, which have tripled since the beginning of October, rose 10 percent to 97 Canadian cents on the TSX Venture Exchange on Thursday, suggesting investors doubt a sweeter bid will be on the way.
Cliffs raised its offer even though Noront did not raise its most recent Nov. 30 offer to match Cliffs' Dec. 3 bid. The Cliffs offer is all stock and the fraction of shares to be offered will be determined before the transaction closes to ensure a value of C$1 a share.
We decided to raise our offer to make it as clear and simple as possible for Freewest shareholders to choose Cliffs over Noront, Cliffs Chief Executive Joseph Carrabba said in a statement.
Cliffs, which already owns about 12 percent of Freewest, also said that it would shift its offer to an all-cash takeover bid if Noront manages to accumulate more than 12.5 percent of Freewest shares.
Doing so would prevent Noront from acquiring a blocking stake, as the cash bid would eliminate the need for a Freewest shareholder vote, Cliffs said. Under the current friendly agreement, the transaction must receive approval of 66.7 percent of Freewest shares.
Noront's latest offer is two shares and one purchase warrant for every seven Freewest shares, which Noront says values Freewest at a little more than C$220 million.
Cliffs and Freewest have disputed that valuation, saying Noront is assigning too much value to the warrant portion of the offer.
Noront struck high grade nickel and copper in the remote Ring of Fire area west of James Bay in Ontario about two years ago, and has since uncovered chromite, which is an essential raw material for stainless steel additive chrome.
Freewest has been defining its own chromite deposit near Noront's find, while New York-listed Cliffs is North America's largest producer of iron ore pellets.
Noront has said its offer is superior to Cliffs as it will allow Freewest shareholders to continue to benefit from the eventual development of the Ring of Fire area, which would undoubtedly boost Noront's valuation.
Noront has said its Nov. 30 offer is its final bid. The bid expires on Friday.
Separately, Noront said on Thursday that it would retract revenue projections and estimates of the mine life of its chromite deposit at the request of the Investment Industry Regulatory Organization of Canada.
It said the estimates, which it released on Wednesday, were not supported by an independent economic analysis.
Noront's shares were down 13 Canadian cents at C$2.23, while Cliffs was down 1.7 percent at $42.39.
($1=$1.05 Canadian) (Reporting by Cameron French; editing by Peter Galloway)