PERTH (miningweekly.com) – Takeover target Cardinal Resources has backed an increased offer from suitor Shandong Gold Mining, which was offering shareholders 70c in cash for each share not already owned.

Shandong recently increased its bid for the ASX- and TSX-listed Cardinal from the 60c a share offered in June this year, to 70c a share, after a competing bid from shareholder Nordgold emerged, which offered Cardinal shareholders 66c in cash for each of their shares held.

Cardinal told shareholders on Monday that after careful consideration of the revised Shandong Gold offer and Nordgold’s unconditional on-market takeover offer, the directors have unanimously recommended that shareholders accept the revised Shandong Gold offer and reject the Nordgold bid.

The revised offer from Shandong Gold valued Cardinal Resources at around A$395-million on a fully diluted basis, and represented a 6.1% premium to the Nordgold bid.

“While the board acknowledges that the Nordgold bid is unconditional, based on the information available at the date of this announcement, the board has no reason to believe that the conditions for the revised Shandong Gold offer, which include a 50.1% minimum acceptance condition and Foreign Investment Review Board approval, cannot be satisfied within a reasonable timeframe,” the company told shareholders.

“Cardinal understands that Shandong Gold has received all necessary Chinese regulatory approvals, with the result that the revised Shandong Gold offer is no longer conditional on any Chinese regulatory approvals.”

Cardinal holds an interest in a number of tenements within Ghana, and is currently focused on the development of its Namdini project, which has an ore reserve of some 5.1-million ounces.

A feasibility study into the project estimated that it would produce 4.2-million ounces of gold over a mine life of 15 years, with an estimated 1.1-million ounces expected over the first three years of the operation. Namdini is expected to cost $390-million to develop.