ACCRA, Aug 5 (Reuters) - Ghana said on Tuesday it was not opposed to AngloGold's ANGJ.J proposed $1.1 billion takeover of its miner Ashanti Goldfields ASL.N , but was not certain it was the best possible deal for one of its national treasures.

AngloGold made a formal bid overnight in the deal first announced in May, but it needs approval by Ghana's government.

"We are not opposed to the deal, but we don't want to be cheated," Finance Minister Yaw Osafo-Maafo told Reuters.

Ashanti's board and biggest shareholder has approved the deal, but Ghana owns a 17 percent stake in the firm and a golden share allowing it to veto a takeover.

Osafo-Maafo said AngloGold had agreed that the government could hold onto the golden share, which also empowers it to block any sale of assets in Ghana.

It was unclear what concessions Ghana might demand, but analysts said these could range from a greater stake in the merged company or assurances about the level of investments AngloGold would make in Ghana by a certain date.

Ghana was awaiting a report by government advisor Societe Generale due by the end of the month before considering its next move, but its was positive about AngloGold's technical expertise, the minister said.

AngloGold has pledged to use its experience in deep level mining and pour $570 million in capital expenditure to extend the life of Ashanti's massive Obuasi mine.

"Anglo has the know-how for that sort of deep mining. The resources required to get the ore are also steep, and you need a company with those resources," Osafo-Maafo said.

The deal would bring AngloGold neck-and-neck with U.S. rival Newmont Mining Corp. NEM.N as the world's top gold producer.

UPBEAT ABOUT APPROVAL

Analysts said Ghanaian politicians, eyeing elections next year, must tread carefully in approving any deal.

"It's a politically sensitive asset. They have to be seen as doing the right thing and not just giving it away to a bunch of foreigners," said fund manager Patrice Rassou at Old Mutual Asset Managers in Johannesburg.

The chiefs of AngloGold and Ashanti both voiced optimism about eventual approval from Ghana, especially since the government would start receiving income from its investment after Ashanti had suspended dividends to shareholders.

"The early indications and signals we got from the government couldn't be more welcoming to Ashanti being in partnership with Anglo," Ashanti's Chief Executive Sam Jonah told a conference call.

Most analysts did not think a bidding war for the firm would erupt since other companies were unlikely to have the financial muscle or be as attractive a merger partner as AngloGold.

"To me, the merger of the two companies does make reasonable business logic," said Graham Birch, London-based manager of Merrill Lynch World World Mining Trust, which has shares in both AngloGold and Ashanti.

The bid that AngloGold revealed on Monday was largely unchanged from what it first announced in May, under which Ashanti shareholders would receive 26 AngloGold shares for each 100 Ashanti shares held.

Lonmin Plc LONJ.J , Ashanti's top shareholder with 27.6 percent, pledged on Monday to vote in favour of the transaction.

Combined, AngloGold and Ashanti produce about 7.3 million ounces of gold annually -- a level matched only by Newmont. The merged company would also boast the world's largest proven gold reserves at 93.2 million ounces.

AngloGold shares closed 0.42 percent higher at 241 rand, outperforming the sector's gold mining index .JGLDX , which shed 0.73 percent.

Ashanti's U.S.-listed shares fell 3.3 percent to $7.85 by 1530 GMT. AngloGold's offer valued Ashanti at $8.36 per share based on Friday's closing prices.