News: UPDATE 1-Miner SolGold says BHP Billiton offer not in its best interest

(Adds background, share movement, company comment)

Oct 10 (Reuters) - Gold miner SolGold Plc said on Monday that an offer from global miner BHP Billiton Plc (BHP) to buy a stake in the company was not in its best interest.

BHP Billiton on Saturday offered $30 million, or 22 cents per share, for a 10 percent stake in SolGold, which had a market capitalisation of 203 million pounds ($252.4 million) as of Friday's close.

Shares in SolGold rose as much as 22 percent to 20.4 pence on the London Stock Exchange.

The offer also includes an additional $275 million proposal, linked with acquiring a 70 percent stake in the unit managing the Cascabel project, SolGold said.

SolGold, which owns an 80 percent stake in the Ecuador project, said it preferred the $33 million financing proposal from investment fund Maxit Capital and gold miner Newcrest Mining Ltd (NCM). [nRSZ8025Ka]

BHP Billiton declined to comment. A jump in the price of gold this year has made acquisitions in the sector more expensive, though executives acknowledge growth will be a challenge without deals.

Gold, a traditional safe haven, touched a high of $1,375 per ounce after Britain's historic vote in favour of leaving the European Union, boosting the valuations of gold miners.

"The tangible interest of a second major mining company in the Cascabel project draws attention to the quality of the project," SP Angel analysts wrote in a note, adding there is a good chance that BHP might return with an improved proposal.

"The current $33 million financing with Maxit and Newcrest is the preferred option at this time as it leaves us in control of this very exciting project at Cascabel," Executive Director Nick Mather said. [nRSJ0966Ma]

BHP shares were up 0.7 percent at 1,241 pence, in line with the broader basic resources sector in Europe .SXPP.

($1 = 0.8042 pounds)