Ramelius Resources has made a takeover offer to acquire all of the ordinary shares of Australian exploration company Explaurum, which owns the Tampia Hill gold project, located near Narembeen in Western Australia (WA).

Under the terms of the offer, Ramelius will offer one share to Explaurum shareholders for every four shares held by them.

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“There is clear logic in the combination of Explaurum’s assets with Ramelius’ WA operations.”

The deal values Explaurum at $0.123 per share, which represents a 66.2% premium to Explaurum’s last closing price of A$0.074 on 07 September.

Ramelius Resources managing director Mark Zeptner said: “There is clear logic in the combination of Explaurum’s assets with Ramelius’ WA operations.

“After the successful acquisition of Edna May last year, Ramelius is focused on building on its growth strategy to extend mine life and maximise the value of existing infrastructure in its portfolio.

“This compelling offer is the next step in that growth strategy and is expected to provide significant benefits to both Explaurum and Ramelius shareholders.”

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The Tampia Hill project is located 240km east of Perth and in proximity of Ramelius’ Edna May mine.

In its offer, the company stated that the proximity of the projects will deliver significant capital cost savings and operational synergies.

Ramelius believes the acquisition of the Tampia Hill project will provide potential for flexibility around mining operations at Edna May.

Based on a feasibility study, the Tampia Hill project contains a mineral resource of 11.7 million tonnes at 1.79g/t Au for a total Resource of 675,000oz of gold.

The project is estimated to have reported ore reserves of 7.2 million tonnes at 2.09g/t Au for 485,000oz of gold.

In response to the takeover offer, Explaurum has asked its shareholders not to take any action.

In a statement, Explaurum said: “The proposed consideration is inadequate and undervalues Explaurum’s underlying assets and future prospects.”