Australia-based mineral explorer Cauldron Energy plans to initiate an off-market takeover bid for Energia Minerals.

The company is offering one Cauldron share for every eight Energia shares, representing a 29% premium to the 5 day value weighted average price (VWAP) of the latter’s stock price.

Cauldron executive chairman Tony Sage stated, "Our bid for Energia rests on our confidence that we are on the verge of defining a major new uranium province in the Carnarvon Basin, and that both Cauldron and Energia have huge exploration and corporate synergies."

The company also stated that the offer was subject to a minimum acceptance condition of 90% of the issued shares in Energia at the end of the offer period.

Following the completion of the deal, the merged entity will be awarded with a highly prospective uranium province in the Carnarvon Basin region of Western Australia.

The combined assets of both the companies account to 32.4 million pounds (Mlbs) of uranium oxide.

"By combining these companies we can create a uranium-focused entity that holds a dominant land position in an emerging and potentially significant uranium province," added Sage.

Cauldron had recently reported an exploration target increase at its wholly owned Yanrey Project in Western Australia.