(Yicai Global) Sept. 8 -- Shandong Gold Mining, China's biggest producer of the precious metal, has raised its original offer price for Cardinal Resources by 67 percent to outbid Russian contender Nord Gold for control of the Australian firm which owns gold mine assets in Ghana.

Shandong Gold has raised its bid to AUD1 (USD0.73) per share from its original tender of AUD0.60 to outdo Nord Gold's current offer of AUD0.90 per share, the Perth-based gold miner said in a statement yesterday.

Moscow-based Nord Gold is the largest shareholder in Cardinal with a 28.39 percent stake. The two sides have been in a bidding war since Shandong Gold first made its offer on June 16, offering AUD0.60 for 100 percent equity in Cardinal. The Jinan-based firm also agreed at the time to buy 26 million newly issued shares at AUD0.46 each, giving Cardinal a price tag of AUD321 million (USD234 million).

Cardinal owns the Namdini and Bolgatanga projects in northeastern Ghana and three gold mines in Subranum in the West African nation's southwest. The Namdini project is expected to finish and go into production in 2023 when it will produce an average of 280,000 ounces of gold per year. The other two pits are still in the prospecting phase.

Cardinal’s stock price [ASX:CDV] closed up 2.94 percent at AUD1.05 today, while shares of Shandong Gold [SHA:600547] ended the day down 1.84 percent at CNY27.21 (USD4) apiece.

Cardinal's stock has more than doubled since the Chinese gold miner first made its bid in June. And the price of gold has gained as much as 20 percent since then as risk averse investors have poured money into the precious metal market to avoid the recent uncertainties and turmoil in the world economy brought about by the Covid-19 pandemic.

Shandong Gold will acquire its first Ghana gold mining project through the deal, and this will help cement its position as a global producer. Further prospecting may find even more reserves in the target assets, the firm said in June.

A minimum of 50.1 percent of shareholders in Cardinal need to be in agreement for Shandong Gold's offer to be accepted.

Editor: Kim Taylor