Gold bars are stacked at a safe deposit room of the ProAurum gold house in Munich March 6, 2014. Gold was flat on Thursday as diplomatic efforts to cool the Ukraine crisis depressed demand for assets seen as safe, but the metal found support above $1,330
Gold bars are stacked at a safe deposit room of the ProAurum gold house in Munich March 6, 2014. Gold was flat on Thursday as diplomatic efforts to cool the Ukraine crisis depressed demand for assets seen as safe, but the metal found support above $1,330 an ounce from weak U.S. economic data and ahead of a key employment report. REUTERS/Michael Dalder REUTERS/Michael Dalder

Australian company Orbis Gold has rejected a $162 million conditional bid from Canadian miner SEMAFO. The latter wanted to acquire the firm for cash at between AUD$0.62 and AUD$0.65 per share.

Although the offer was well above its Friday close price of AUD$0.42 a share, Orbis, which went into a trading halt on Monday morning, said it rejected the offer because it undervalued the company at only between $154.94 million and $162.44 million. It said it found SEMAFO's offer quite ludicrous because the Canadian firm had declined an invitation to conduct due diligence on its assets. It likewise advised its shareholders to take no action against the offer.

Last week, Orbis hired investment bank Merrill Lynch as defence adviser after several confidential approaches came up. This prompted its shares to jump by as much as 20 per cent recently.

Orbis is being heavily wooed by interested takers because of its Burkina Faso assets, where its high-grade, low-cost flagship Natougou deposit can be found. The project has been regarded as the best held by a junior miner in West Africa, according to The Australian. But Orbis said it remain committed to seeing Natougou get developed and move into production.

Natougou, a large-scale high-grade gold deposit, has a resource of 15 million tonnes at 3.7g/t gold for 1.8 million ounces, according to Proactive Investors Australia. In September, Orbis bought from London-based private equity investor Greenstone Resources US$20 million worth of new shares at A$0.42 per share.

In a statement, Canadian miner SEMAFO said meetings were held with Orbis in September to discuss the proposal. However, it failed to receive an appropriate response, thus the unsolicited bid.

"SEMAFO has attempted to engage with Orbis in a straightforward and business-like manner. The meetings were followed by various communications, including several written proposals. Despite SEMAFO's best efforts, Orbis has so far responded in a manner that has made SEMAFO consider it appropriate to issue this statement."

SEMAFO owns and operates the Mana Mine in Burkina Faso, the AAP reported.

On Monday, prices of spot gold in Asia jumped to as much as $1,234.80 an ounce. U.S. gold futures likewise rose to $1,235.70.