HONG KONG – China Hanking Holdings launched a takeover bid for Australia's Primary Gold on Wednesday in line with a plan to build a long-term Australian gold business, valuing the target firm at A$37.5-million.
China Hanking, which owns 8.4% of Primary Gold, will offer A$0.0575 a share for the miner through its unit Hanking Australia Investment, it said in a filing to the Hong Kong bourse on Wednesday.
Shares in Primary Gold, which have been on a trading halt since February 16, jumped as much as 33% to A$0.52 a share when trading resumed.
Primary Gold, which has interests in the Coolgardie gold project in Western Australia and the Mt Bundy gold project in the Northern Territory, said the offer was pitched at a significant premium.
Its independent directors unanimously recommended that shareholders accept the offer, in the absence of a superior proposal and subject to an independent expert's report, it said in a statement to the Australian stock exchange.
China Hanking said it would fund the deal through internal resources.