Coolgardie-Kambalda region gold miner Ramelius Resources (ASX: RMS) today threw into the ring a 2-for-1 scrip offer for a merger with another regional gold miner Dioro Exploration NL(ASX: DIO).

A deal appeared to have been settled yesterday when Dior directors recommended the increased Avoca Resources ((ASX: AVO) bid in the light of no other bid being evident.

Ramelius claimed that its bid valued Dioro at $A1 per share ($US0.82) for a total bid worth $A92 million ($US75.6 M)

Joe Houldsworth, managing director of Ramelius said the offer represents a premium of 40% over the implied value of the upped Avoca bid, and at least a 153% rise to the last traded price before the Avoca offer.

Dioro shareholders have the opportunity to merge with a like-sized peer and share in a far higher degree of upside as part of a very profitable, high-grade WA based gold miner on superior terms to the Avoca offer, the company said.

Ramelius, which mines gold at Wattle Dam where there is an identified deeper high grade ore system, said if the company acquires 100% of Dioro, the Dioro shareholders would hold about 45% of the merged entity.

Dioro owns the Kalgoorlie South mine and has a 49% stake in the Frog's Leg mine.

Rameliius said there was a close proximity between Wattle Dam and gold plant at Burbanks near Coolgardie with the Frog's Leg mine.

If Ramelius acquires 100% of Dioro's shares on the basis of a 2-for-1 merger ratio, Dioro shareholders will hold about 45% of the merged entity, with Ramelius shareholders holding the balance.

The offer is subject to certain conditions including a 50.1% minimum acceptance condition.

The current mining plan for Wattle Dam could see production in 2010 reaching 67,000oz at q recovered grade of 20.5 grams/tonne with the resource open at depth.

Previous drilling at Wattle Dam resulted in high grade hits including 16 metres @ 482 g/t and 48m @ 154g/t located within the current mining plan.

Ramelius owns 100% of the Burbanks treatment plant to process Wattle Dam ore, is debt-free with cash on hand as at June 30 of $A26.7 M ($US21.95 M).