Cannon Resources, an Australian nickel exploration company, has agreed to an off-market takeover offer of around A$45m ($29m) from Kinterra Battery Metals Mining Fund, a critical minerals focussed private equity fund.

In this connection, Cannon Resources has entered into a bid implementation agreement with Kedalion Nickel, a fully-owned subsidiary of the private equity fund.

Kinterra Battery Metals offers to acquire all the shares of the Australian Securities Exchange (ASX) listed Cannon Resources, which it previously did not own for A$0.45 ($0.29) per share in cash.

Presently, Kinterra Battery Metals has a relevant interest in 17.1 million shares in the nickel explorer, which translates to a stake of around 19.99%.

The relevant interest is as a result of some shareholders of Cannon Resources, including its largest shareholder, Ponderosa Investments WA (15.5%), signing prebid acceptance agreements to accept the offer, based on certain conditions.

The nickel exploration company is focused on two core projects in Western Australia, which include the Fisher East and Collurabbie projects. Both projects are situated in the northern Goldfields region, around 200km north-east of Leonora.

Fisher East is the company’s flagship project. It hosts four nickel sulphide deposits, which include Musket, Cannonball, Camelwood, and Sabre, located in close proximity to each other.

The four deposits have a combined 2012 mineral resource of 134,100 tonnes of nickel at an average grade of 1.8% nickel.

Cannon Resources’ board of directors has recommended unanimously that shareholders accept the offer from Kinterra Battery Metals in the absence of a superior proposal.

Cannon Resources chairman Alex Passmore said: “Kinterra’s offer creates an excellent opportunity for Cannon shareholders to realise value for their investment whilst moving the asset to Kinterra who can take Fisher East to the next stages of development.

“Fisher East is at an inflection point and this transaction removes the risks and equity dilution associated with the next phase of intensive project development work.”