OZ Minerals has unveiled a takeover bid to acquire all shares in Brazil-focused copper / gold mining and development firm Avanco Resources for A$418m ($323.2m) with the aim of expanding its operations into South America.

OZ Minerals is set to offer A$0.085 in cash and 0.009 shares to Avanco shareholders for each Avanco share currently held under the proposed deal.

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The acquisition is expected to strengthen OZ Minerals’ copper production profile.

In addition, the deal will provide the company with various expansion options in the Carajás copper province and Gurupi gold belt in Brazil.

"Avanco is a good strategic fit for OZ Minerals, diversifying our portfolio and adding to our organic growth pipeline with its development and exploration opportunities."

OZ Minerals chairman Rebecca McGrath said: “Avanco is a good strategic fit for OZ Minerals, diversifying our portfolio and adding to our organic growth pipeline with its development and exploration opportunities in the Carajás province.

“Avanco is a disciplined acquisition, representing approximately 16% of OZ Minerals’ market capitalisation.”

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The transaction is slated to offer the company a potential organic pathway to seven mines in the next six years, including Prominent Hill, Carrapateena, West Musgrave, Antas, CentroGold, Pedra Branca and Pantera.

OZ Minerals chief executive Andrew Cole said: “We believe combining Avanco’s experienced, in-country management team with OZ Minerals’ funding capacity and underground technical expertise will accelerate and enhance the growth and development prospects of Avanco’s assets.

“On completion of the transaction, we will undertake a business execution review to hone our pathway to optimising the portfolio, improving operating costs to position the business in the bottom half of the cost curve, and accelerate growth.”

The transaction has received approval from Avanco’s board and is subject to minimum acceptance from 50.1% of Avanco’s shareholders.

OZ Minerals is currently planning to send bidder’s and target’s statements to Avanco shareholders next month.