Australia-based gold exploration company Aurum Resources has signed a bid implementation agreement (BIA) with Mako Gold that will see Aurum acquire all issued shares and options of Mako.

The off-market takeover bid is set to combine Aurum's balance sheet and drilling efficiencies with Mako's assets in northern Côte d'Ivoire, to form an emerging exploration and development gold business in West Africa.

Shareholders in Mako will receive one Aurum share for every 25.1 Mako shares they hold.

The agreement offers a premium of 112% over recent Mako share prices.

Mako's directors have unanimously recommended acceptance of the offer in the absence of a superior proposal.

The combined company will have a cash balance of more than A$20m ($13.35m) to advance the development of the Napié and Boundiali projects in northern Côte d'Ivoire.

Mako managing director Peter Ledwidge said: “We have always believed our Napié Project has potential to host multi-million ounces of gold, and pleasingly, due to [the] relative sizes of Mako and Aurum, upon close of the proposed merger, Mako securityholders will remain a meaningful part of the expanded group, and therefore will share in the continued upside to the growth in Napié, as well as gain exposure to the rapidly evolving Boundiali Project where Aurum expects to deliver its maiden resource in late 2024."

Aurum's offer will result in Mako shareholders owning 20.5% of the new company, with Aurum shareholders retaining 79.5%.

Aurum managing director Dr Caigen Wang said: “We see strong similarities between Napié and the Abujar Project where the Aurum executive team, when running Tietto Minerals Ltd, were able to rapidly grow resources to 3.8moz [million ounces], and propel Abujar into production before being acquired in mid-2024 for over A$768m.”