Nov 3 (Reuters) -

Australia's Tietto Minerals said on Friday that a takeover offer by a unit of China's Zhaojin Mining Industry "materially undervalues" the company.

Tietto said it was recommending shareholders not accept the A$629 million ($404.57 million) offer by Zhaojin Capital to buy all the shares of the Australian miner that it does not already own, to which the Chinese gold firm expressed disappointment.

"We are disappointed that the Tietto Board has not seen the value in our cash offer, which represents an attractive premium for shareholders," Zhaojin Mining said in a statement.

Tietto had said the offer was "opportunistically timed" by Zhaojin as it came after an improvement in its flagship Abujar gold mine in Ivory Coast.

October was a record month for the mine, with about 12,057 ounces of gold recovered, according to Tietto.

Under the terms of the offer, Zhaojin Capital, which already owns about 7% of Tietto's shares, would buy the remaining 93% stake for A$0.58 per share. That represented a 36.5% premium to the stock's Oct. 29 close.

The offer is subject to a number of approvals, including from regulatory authorities in China and Ivory Coast, and has already been approved by Australia's foreign investment review board.

Shares of the Perth-headquartered company edged about 0.9% higher to trade at A$0.57 per share following the announcement. ($1 = 1.5547 Australian dollars) (Reporting by Archishma Iyer in Bengaluru Editing by Paul Simao and Chris Reese)