Junior gold producer Allied Gold Ltd
(ASX:ALD) says it intends to make a takeover offer for all of the outstanding shares in Toronto listed Australian Solomons Gold.
Allied is offering 0.85 Allied Gold shares for every Australian Solomons Gold share valuing the company at $56.3 million.
Independent directors of Australian Solomons Gold have unanimously recommended the offer in the absence of a superior proposal.
Allied Gold which operates the Simberi gold mine in Papua New Guinea says the merger of Allied Gold and Australian Solomons Gold will create a larger, more diversified gold production and exploration company with material mining interests in the Pacific Rim.
The new company is expected to produce upwards of 300,000 ounces of gold per annum from 2013 from current projects.
Allied Gold says it is seeking to list on the Toronto stock exchange.
Allied Gold has posted net losses over the last five years.
