Canada's Orvana Minerals Corp said it has formally commenced its all-cash C$29.3 million ($26 million) takeover offer for Kinbauri Gold Corp.

Earlier, Kinbauri had rejected Orvana's offer of 55 Canadian cents a share as an investment deal with Glen Eagle Resources Inc was on the verge of completion.

Glen Eagle had on April 17 offered to invest C$32 million in Kinbauri for a 45 percent stake in Kinbauri Espana unit -- which holds interests in the El Valle/Carles gold and copper project in northwestern Spain.

We are offering Kinbauri shareholders a choice: tender to our offer and receive liquidity, value and certainty today or face a risky future with Kinbauri, whose plan to bring its Spanish properties into production relies upon uncertain financing and inexperienced management, Kent Jespersen, Orvana's chairman, said in a statement.

Orvana said its offer was open for acceptance until June 30, and is subject to the condition that Kinbauri terminate its previously announced deal with Glen Eagle.

Shares of Kinbauri were up 3 Canadian cents at 57 Canadian cents in morning trade on the Toronto Stock Exchange. ($1=1.127 Canadian Dollar)

(Reporting by R. Manikandan in Bangalore; Editing by Himani Sarkar)