Larvotto Resources will acquire 100 per cent of Hammer Metals, creating a consolidated, district-scale copper and critical minerals giant in Queensland’s Mt Isa region.
The transaction, to be implemented via a board-recommended scheme of arrangement, values Hammer at approximately AU$54 million.
Under the all-scrip offer, Hammer shareholders will receive one new Larvotto share for every 22 Hammer shares held, implying an offer price of 6 cents per share.
The merger combines Hammer’s advanced copper-gold portfolio with Larvotto’s near-term producing Hillgrove antimony-gold project in New South Wales, where production is locked in to commence this August.
The enlarged group will boast a formidable pro forma market capitalisation of roughly AU$871 million.
The acquisition advances Larvotto’s strategy to build a leading, Australian critical minerals and precious metals company with a focus on antimony, gold and copper production.
Meanwhile, the enlarged company will give Hammer shareholders an attractive mix of near-term production, large scale and highly prospective exploration assets backed by enhanced liquidity.
Larvotto Managing Director Ron Heeks said: “This transaction is a highly compelling tactical and strategic fit that significantly strengthens Larvotto’s position as an emerging Australian critical minerals and precious metals company.
“By combining the Hammer assets with our adjacent Mt Isa Project, we are creating a district-scale copper portfolio with the resource inventory and development optionality to become a major participant in the region.”
In a vote of confidence, global commodities giant Glencore has committed to a strategic AU$15 million equity placement in Larvotto at AU$1.53 per share.
These funds will be used to accelerate drilling and development studies across the combined Mt Isa asset base, which now commands a substantial resource inventory of around 530,000 tonnes of copper equivalent.
The cornerstone of the acquisition is Hammer’s Kalman project, which hosts a JORC Resource of 39.2 million tonnes at 1.27 per cent copper equivalent.
Hammer’s board has unanimously recommended the deal. In tandem with the takeover, Hammer shareholders will also receive shares in a spin-off company, Yandal Gold Co, containing Hammer’s Western Australian gold assets.
Daniel Thomas, Managing Director of Hammer, said: “The Hammer board believes this transaction delivers compelling value for shareholders while preserving exposure to the significant upside potential of our Queensland copper and critical minerals assets.
“The board unanimously supports the transaction and believes it represents the best opportunity to accelerate development of Hammer’s Queensland portfolio within a larger, well-funded and more diversified Australian resources company.”
Subject to court and shareholder approvals, the transaction is scheduled for completion in October.
