Metals exploration group African Gold plans to acquire mining company Mwana Africa in what amounts to a reverse takeover which will value the combined company at about £76 million (€111.5 million).

The new group will be called Mwana Africa, meaning "sons of Africa".

The original Mwana Africa is a private company owned by wealthy African shareholders and run by former Anglo-American engineer, Kalaa Mpinga. It has producing assets in Zimbabwe and exploration and development assets in the Democratic Republic of Congo.

African Gold is a UK-registered company with its headquarters in Dublin. The group made a loss of £532,316 in the 12 months to the end of March.

The reverse takeover, which is subject to approval by shareholders at an extraordinary general meeting (egm) next month, will give the new company access to London finance, something which was not available to Mwana Africa as it existed before.

"It is a win-win situation for both companies," said Mr Mpinga, who will be chief executive of the combined group. "By combining their knowledge of the Irish and London markets and our knowledge of Africa, we have a very powerful group."

At the egm, the company will also seek permission from shareholders to consolidate its share capital so that every 10 ordinary shares, currently worth one pence each, will be worth 10 pence.

Under the terms of the proposed deal, three Mwana directors, including Mr Mpinga, will join the board of the combined company, which will have about 3,000 employees in Zimbabwe, South Africa, Ghana and the Democratic Republic of Congo.

David Fish, formerly executive director of finance at Mwana, will be finance director of the combined group and Tim Wadeson will be technical director.

John Teeling, formerly joint executive chairman of African Gold, resigned from the group on Thursday ahead of yesterday's announcement.

The company is also seeking to raise £4.35 million through the sale of 8.7 million shares to help finance the costs of the acquisition and to provide working capital for the enlarged group.

Mr Mpinga also said the new company would be looking to move into copper over the next two years.