WA nickel producer Panoramic Resources has mounted a $36 million takeover bid for explorer Magma Metals.

Panorama, which holds a 9 per cent shareholding in Magma, is seeking to acquire all outstanding shares in an off-market bid which values the company at about $40 million.

Panoramic has offered Magma shareholders two Panoramic shares for every 17 Magma shares, implying a value of 14.94 cents per share.

The price is based on Panoramic's closing share price of $1.27 yesterday.

The ASX-listed Magma has base and precious metals projects in WA and Canada.

"Magma Shareholders who accept Panoramic's Offer will become part of a larger and more diversified Australian listed mining company with a diverse portfolio of operating mines, potential development projects and exploration properties," Panoramic chairman Brian Phillips said.

"Panoramic has a history of generating strong operating cash flows, profits and paying dividends to shareholders," he said.

"Further, Panoramic has a highly experienced, multidisciplined management and operating team with a strong track record of project delivery and growing value for shareholders.

Magma shares were up 4.5 cents, or 56 per cent, to 12.5 cents at 9.25am. They have traded as high as 14 cents this morning.