China-based gold producer Shandong Gold Mining has agreed to acquire Cardinal Resources, a Ghana-focused miner, for around A$321m ($221m) in cash.

The directors of Cardinal Resource who own a total of 6.37% stake in the company intend to accept the Shandong Gold’s 100% off-market cash takeover offer.

Cardinal CEO and managing director Archie Koimtsidis said: “The board of directors of Cardinal has negotiated what we consider a strong offer for our shareholders and one which delivers a significant premium to Cardinal’s market price, at a time of considerable volatility and uncertainty in global markets.

Shandong Gold is committed to developing Namdini mine in Ghana

Koimtsidis noted that Shandong Gold is committed to developing Namdini to establish the first long-life gold mine in the Upper East Region of Ghana, should the takeover be completed.

As per the bid implementation agreement, Shandong Gold Mining will offer A$0.6 per share to Cardinal Resources shareholders for each share held.

The agreement is subject to 50.1% minimum acceptance by Cardinal shareholders; Foreign Investment Review Board (FIRB) approval; and approvals of certain Chinese regulatory bodies.

Shandong Gold chairman Li Guohong said: “We will build on our positive track record and reputation as we expand our business into Ghana with this agreed Cardinal transaction.

“This is a positive track record and reputation we plan to uphold, as we continue to expand our operations to additional overseas jurisdictions, including our expansion into Ghana with this agreed transaction with Cardinal.

“We look forward to working closely with stakeholders, the local communities and the Government of Ghana to deliver the Namdini Project that will create employment and deliver many significant benefits for the regional economy and Ghanaians for many years to come.”

Cardinal Resource said that the Shandong Gold’s offer premium is a significant increase on the Nord Gold’s non-binding indicative and preliminary proposal of A$0.45775 made in March 2020.