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(Bloomberg) -- Ramelius Resources Ltd. will buy gold developer Spartan Resources Ltd. in a transaction valuing the smaller Australian producer at A$2.4 billion ($1.5 billion), as miners seek more supply amid soaring bullion prices.

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The offer represents an 11.3% premium to Spartan’s closing price on March 14, Ramelius said in a statement on Monday. The value of the takeover deal is about A$1.8 billion, according to Bloomberg calculations.

The agreement will give Ramelius ownership of Spartan’s flagship Dalgaranga gold project in Western Australia. The combined group is set to become a leading Australian producer with overall output rising to more than 500,000 ounces a year by 2030, Ramelius said.

The offer comes as prices for bullion last week topped $3,000 an ounce for the first time, with strong central bank buying and haven demand driving the metal’s 38% rally over the last 12 months.

Soaring prices have sparked a flurry of takeover activity among companies that mine the metal in recent months — including Australian producer Northern Star Resources Ltd.’s A$5 billion purchase of De Grey Mining Ltd. and Equinox Gold Corp. Ltd.’s C$2.6 billion ($1.8 billion) acquisition of Calibre Mining Corp. in Canada.

Shares of Spartan were trading 9.1% higher in Sydney shortly after opening on Monday. Ramelius fell as much as 4.6%.

Spartan shareholders, excluding Ramelius which already has a 19.9% shareholding in the smaller firm, will own 39.5% of pro-forma shares outstanding of the enlarged company after the deal is complete, it said. The proposed deal will see Spartan shareholders issued with 0.6957 new Ramelius shares and A$0.25 in cash for each stock.

(Updates with more details on takeover throughout)

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