Avanco Resources Limited (ASX:AVB) has received a $444 million bid from major miner OZ Minerals (ASX:OZL) with both boards endorsing the takeover.
The off-market takeover values Avanco at 16.8 cents per share, which is a 118% premium to yesterday’s closing price of 7.7 cents.
Not surprisingly, the company’s shares closed about 101% higher today, at 16 cents.
Avanco is a strategic fit for OZ Minerals
Under the offer, Avanco shareholders will receive 8.5 cents in cash and 0.009 OZ Minerals shares for each Avanco share held.
If the offer goes ahead, Avanco shareholders will effectively own up to 7.3% of OZ Minerals.
Avanco is a strategic fit for OZ Minerals, diversifying its portfolio and adding to its organic growth pipeline of development and exploration opportunities in the Carajás province of Brazil.
2.2 million ounce gold resource in Brazil
Avanco’s Antas mine in Brazil produces about 14,000 tonnes a year of copper in concentrate, with improvement in production, grades and costs expected.
The company also holds the Centro gold project, which has a 2.2 million ounce gold resource, with a scoping study expected in the coming weeks.