Austral Resources Australia Ltd. has locked in a binding agreement to acquire 100 per cent of Hammer Metals in an AU$80.7 million deal, trumping a rival proposal from Larvotto Resources and creating an enlarged Queensland copper company.
Under the agreed scheme of arrangement, Hammer shareholders will receive 1.2903 Austral shares for every Hammer share held, alongside an in-specie share distribution in SpinCo, a new entity created to demerge Hammer’s Western Australian gold assets in the Yandal region.
The transaction delivers a total implied consideration of 8.7 cents per share, representing a 29.4 per cent premium over Larvotto’s previous bid and up to a 70.6 per cent premium to Hammer’s pre-bid trading price. Larvotto confirmed it will not match Austral’s offer.
The combination creates an enlarged, Queensland-focused copper producer, developer, and explorer. It aligns Austral’s Mt Kelly oxide production and Rocklands sulphide processing facility with Hammer’s nearby flagship Kalman deposit, which hosts 39.2 million tonnes at 1.1 per cent copper equivalent, located just 60 kilometres away.
Upon implementation, Hammer shareholders will hold approximately 31.1 per cent of the merged group while retaining 100 per cent ownership of the demerged WA gold portfolio. Austral has also provided an interim AU$6.0 million unsecured loan facility to fund Hammer through to completion.
Hammer Chairman Russell Davis said the board unanimously determined the offer delivered a superior outcome for shareholders.
“The scheme delivers materially higher headline value and provides Hammer shareholders with an expected 31.1 per cent ownership interest in a larger Queensland-focused copper producer, developer and explorer,” Davis said.
“In particular, the proximity of Kalman to Rocklands creates strong strategic logic and the potential for Kalman to become an important long-term source of sulphide feed.”
Austral Chairman David Newling added that the combination creates a stronger platform to pursue the group’s ambition of becoming Australia’s next mid-tier copper powerhouse.
“The combination creates a stronger regional platform, with the potential to unlock significant value through greater scale, infrastructure utilisation and future resource development,” Newling said.
Major Hammer shareholders representing roughly 16 per cent of issued stock have pledged support. The scheme meeting and court approvals are slated for October and November, with implementation targeted for late November.
