Australian gold mining company Capricorn Metals has received a non-binding, indicative takeover bid from gold and nickel explorer Regis Resources.

Under the offer, Regis proposed to acquire 100% of the company and to be issued shares in Capricorn in exchange for 11.4 cents in Regis shares per each Capricorn share.

Regis claimed that it received confirmation from Capricorn’s board that it would unanimously recommend the proposal.

Additionally, the company stated that two of Capricorn’s shareholders, Nedlands Nominees and Centrepeak Resources Group, are in favour of the transaction.

Regis is working on securing the support of Capricorn’s largest shareholder, Hawke’s Point (18.9% interest).

“Capricorn Metals is currently working on the development of its flagship fully owned Karlawinda gold project in the Pilbara region of Western Australia.”

In response to the proposal, Capricorn said in a statement: “The proposal is subject to a number of conditions, including a Capricorn board recommendation along with the support of key Capricorn shareholders and the execution of a binding implementation agreement.

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By GlobalData

“While the proposal received unanimous support from the Capricorn board, not all of the conditions have been satisfied such that there is a transaction that can be put to shareholders.”

Capricorn Metals is currently working on the development of its flagship fully owned Karlawinda gold project in the Pilbara region of Western Australia.

A final investment decision on the project is expected to be made later this year, subject to certain conditions.

Last month, the company reported positive results following reverse circulation drilling at the Tramore Prospect, which is located south of the 1.5Moz Bibra deposit at the Karlawinda project.

Results of an optimisation study released in June indicated that the pre-tax project net present value (NPV) increased by 69% to $243m, while the mine life increased by two years to eight and a half years.