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Vango Mining is hunting troubled fellow gold explorer Dampier Gold and shareholders are already jumping ship.

Vango (ASX:VAN) has tabled an all-scrip takeover bid of two of its shares for every seven Dampier (ASX:DAU) shares, which values the target at 5.6c per share, or around $6.7 million – an 87 per cent premium to the 3c closing price last Friday.

Vango has a market cap of $93 million while Dampier is worth about $3.6 million.

Shareholders accounting for about 13 per cent have already agreed to take Vango’s offer and have signed pre-bid acceptance agreements.

Vango is Dampier’s joint venture partner in a West Australian gold mine called “K2”, but the pair have been embroiled in a dispute over the partnership.

Shareholders have expressed frustration over the lack of progress at K2. Dampier blames Vango for not earning its 50 per cent stake in the project.

Vango’s main focus, meanwhile, is its “Plutonic Dome” gold project and bringing that into production.

Dampier says it is “considering its response to the offer” and told shareholders not to take any action just yet.

Since the start of the year Dampier’s shares have slumped over 42 per cent from a 52-week high of 5.2c.

Dampier Gold (ASX:DAU) shares over the past 12 months.
Dampier Gold (ASX:DAU) shares over the past 12 months.

Dampier is primarily a West Australian focused gold explorer — but it has dabbled in exporting food to China via its Aurigin Foods business.

But chairman Malcolm Carson told Stockhead earlier this year that Dampier is definitely a mining company and not a food business company.

Dampier revealed in January that it had entered into a share sale agreement to sell Aurigin Foods to Aurigin Australia Limited, a company associated with Mr Carson and another Dampier director, Annie Guo.

The deal would see Dampier retain a 33.3 per cent stake in Aurigin.

But shareholders did not like the path Dampier was taking.

Mr Carson did say though that Dampier was looking at expanding in the gold space.

In June, the company revealed it had picked up another gold project – the Ruby Plains project in the East Kimberley region of WA.

Stockhead is seeking comment from Dampier and Vango