Shares in ASX and TSX-listed Magma Metals rocketed 68% after Panoramic Resources, a nickel miner, launched a $40 million takeout bid.

Panoramic already holds a 9.34% stake in Magma, which explores for base metals and platinum group metals, making it Magma’s second largest shareholder.

Under the deal, Magma shareholders will receive two Panoramic shares for every 17 Magma shares.

“Panoramic believes that the offer represents significant value for Magma’s assets and a substantial premium to prices at which Magma has traded in the short and medium term,” Panoramic said in a statement. “Magma shareholders who accept Panoramic’s offer will become part of a larger and more diversified Australian listed mining company with a current market capitalisation (pre-offer) of $263 million and with a portfolio of operating mines, potential development projects and exploration properties.”

The offer is conditional on Magma not spinning off its gold assets.

Perth-based Panoramic owns and operates the Savannah and Lanfranchi underground nickel mines and recently acquired the Gidgee Gold Project. Magma Metals’ main property is the Thunder Bay North platinum-palladium-copper-nickel deposit. It also has precious and base metals exploration projects in the Yilgarn and East Kimberley regions of Western Australia.