Tietto Minerals, a gold producer in West Africa, has received a buyout offer of nearly A$629m ($400.9m) from Zhaojin Capital, a fully-owned subsidiary of Zhaojin Mining Industry.

Zhaojin Mining already owns a 7.02% stake in the Australia-based Tietto Minerals. Under the terms of the conditional, non-binding indicative proposal, Zhaojin Mining intends to acquire the remaining stake in the company for A$0.58 ($0.37) per share in cash.

The consideration represents a 36% premium to Tietto Minerals’ last closing price and a premium of 42% to Tietto Minerals’ five-day VWAP as of 27 October 2023.

Through the acquisition of the gold production and smelting company, Zhaojin Mining aims to expand its business overseas as well as enhance the overall profitability of its operations.

Tietto Minerals’ core asset is the Abujar gold project located in the western Côte d’Ivoire. The company achieved commercial production at the gold mine in July 2023.

The company completed the commissioning of the process plant at the gold mine in March 2023. This was preceded by the first gold pour in January 2023.

Following the completion of the proposed deal, Zhaojin Mining intends to support and expedite the growth of Tietto Minerals including, the development of the Abujar gold mine and continued exploration in Côte d’Ivoire, Liberia, and other regions.

Tietto Minerals’ board has engaged Barrenjoey and Corrs Chambers Westgarth as financial and legal advisers with respect to the indicative proposal.

According to the gold production company, there is no assurance whether the offer will result in a binding proposal that the Tietto Minerals’ board would recommend to its shareholders.

The completion of the proposed deal is subject to fulfilment or waiver of certain conditions before the end of the offer period.