China-based Western Mining has entered into a definitive agreement with Inter-Citic Minerals to acquire all of its outstanding common shares for CAD250m ($252m).

The price of each share works out at CAD2.05 ($2.06) offering the existing shareholders a 41.5% premium on Inter-Citic’s last closing price of CAD1.45 ($1.46).

Western Mining is looking to expand its gold division and the acquisition is expected to bolster its efforts in this direction.

Earlier this year, Inter-Citic unveiled an updated mineral resource estimate for its Dachang Gold Project that laid out a total measured and indicated mineral resource of 22.52 million tonnes grading 3.04 grams per tonne gold, containing 2.20 million ounces of gold.

Western Mining vice president Xihong Pan said, "Our acquisition of Inter-Citic and the Dachang Project is an important step in realising our chairman’s strategic goal of expanding the gold division of Western Mining."

Inter-Citic CEO James Moore commended Western Mining for the aggressive stance taken to acquire the Dachang project while offering his company the best proposal for takeover.

The transaction, subject to various approvals, is expected to be closed towards the end of 2012.

Standard Chartered Bank was the financial adviser to Inter-Citic for the transaction with Riverstone Advisory providing similar services to Western Mining.