Auctus is offering 13.5c per share, a 29% premium to Mungana’s closing price yesterday, and a 26% premium to the 30-day volume-weighted average price of Mungana shares.

Mungana acquired the Chillagoe base metal assets off the liquidators of its former parent company Kagara last year for $A15 million.

Under a recently appointed management team, led by Tony James, the company has been evaluating the development of the high-grade King Vol zinc deposit through the Chillagoe processing facility, which was near completion when Kagara collapsed.

Auctus’ offer carries a number of conditions, including Mungana declaring that the plant is in “very good” condition and power has been secured, or allowing an independent expert to confirm those points.

Perth-based Auctus was established last month as a special purpose vehicle for the specific function of making the offer.

The Auctus board comprises Stephen Murdoch as chairman, and Paul Sims and Terry O’Connor as directors.

Murdoch and Sims have both previously been CEO of Karara Mining, while O’Connor is a mechanical engineer.

The team is one of two groups being backed by Denham in Australia through its Perth office.

Denham’s Burt Koth told MiningNews.net earlier this month that Murdoch and his team have been backed to the tune of $130 million, with the potential to rise to more than $200 million.

He said the team’s strengths included eliminating unnecessary capital expenditure components without compromising project outcomes.

“So their business case is simple – secure two or three projects in Australia and get them into production hard and fast,” he said.

Mungana has advised shareholders to take no action while it considers the offer.

Shares in Mungana jumped 33% to 14c.