Australian gold producer Norton Gold Fields has launched an unsolicited takeover offer A$24.1m ($22.6m) for Bullabulling, as part of its efforts to strengthen its core operations in Western Australia.
The company is offering to pay A$0.07 per share of Bullabulling, a 30% premium to its closing price on 17 April.
Norton Gold Fields CEO Dianmin Chen said that the Bullabulling Gold Project has significant funding challenges which a small company such as Bullabulling will have ongoing difficulties managing.
"By accepting the Offer, Bullabulling shareholders will remove their exposure to these major financing risks and the likely continued dilution in the value of their shareholdings," Chen said.
Bullabulling has one project, the Bullabulling Gold Project, which requires over A$300m capital expenditure to bring it into production, according to Norton.
Headquartered in Perth, Bullabulling Gold has a market value of around A$19.6m, and operates wholly-owned subsidiaries Bullabulling Gold UK and Bullabulling Operations.
With a market capitalisation of about A$117m, Norton is one of the leading gold producers in the region, and it produced 172,739oz of the metal in 2013.