Minerals explorer Copper Strike says it plans to accept Kagara's offer to buy its Einasleigh copper project in north Queensland for about $19 million, unless it receives a better proposal.
Perth-based Kagara, a base metals miner, announced today it had offered $16 million in cash and the cancellation of its 17.5 per cent interest in Copper Strike in exchange for the Einasleigh project.
The project is about 210 west of Ingham in north Queensland.
The 17.5 per cent stake is worth about $3 million, based on Copper Strike's share price at 1330 AEST of 14 cents, up half a cent or 3.7 per cent on the day.
Copper Strike said it intended to finalise a binding deal with Kagara and recommend the transaction to its shareholders.
Kagara said the planned acquisition would provide ore feed to complement production from its Balcooma operations to the south of Einasleigh.
Kagara managing director Geoff Day said the proposal was consistent with the company's objective of strengthening its resource and reserve positions at each of its perating centres.
"This proposal ... would deliver genuine win-win outcomes for shareholders of both companies," Mr Day said in a statement.
"From CSE's perspective, it would immediately monetise the identified copper resources at Einasleigh - which we believe were unlikely to ever be developed as a standalone project - and deliver a cash injection which could be used to underpin their core business as a focused explorer.
"From Kagara's perspective, it further increases our copper resource inventory and strategic exploration tenement holdings in North Queensland.
"We believe we can develop and efficiently mine the Einasleigh copper project, providing a complementary ore feed to the high-grade ore coming from our Balcooma operations to the south and, in due course, lower grade feed from Baal Gammon."
Kagara's $14.3 million takeover bid for Copper Strike earlier this year was unsuccessful.