Austral Resources Australia Ltd (ASX: AR1) has announced a binding agreement to acquire Hammer Metals Limited (ASX: HMX) through a scheme of arrangement valued at approximately $80.7 million, delivering $0.087 per Hammer share. Hammer Metals, an explorer focused on copper and gold projects in Australia, has entered into a binding Scheme Implementation Deed for the acquisition. Austral Resources, an ASX-listed copper producer and developer operating in Queensland, aims to expand its regional footprint and operational capabilities through this acquisition.
Under the terms of the agreement, Hammer shareholders will receive 1.2903 Austral shares for each Hammer share, valued at $0.080, along with an implied $0.007 per share from their proportional interest in the demerged gold vehicle, named SpinCo. This total consideration represents a 29.4% premium to the implied offer price of $0.067 per Hammer share under a previously announced, but now terminated, scheme with Larvotto Resources Limited. SpinCo will hold Hammer’s prospective Yandal gold assets, including the Bronzewing South, Orelia North, and Mt Sefton Gold Projects, with shares distributed to existing Hammer shareholders. Post-transaction, Hammer shareholders will collectively own approximately 31.1% of the enlarged Austral and 100% of SpinCo.
The transaction is expected to create an enlarged Queensland-focused copper producer, developer, and explorer, leveraging Austral’s existing oxide production at Mt Kelly and its planned sulphide processing restart at Rocklands. The proximity of Hammer’s Kalman project to Rocklands is noted as a strong strategic fit for long-term sulphide feed. For Hammer shareholders, the deal offers materially higher headline value, exposure to a larger copper entity, and retained direct exposure to the exploration upside of the Yandal Assets through SpinCo. To support Hammer through to implementation, Austral will provide an unsecured loan facility of up to $6.0 million, which will also cover the $1.0 million outstanding loan and a $550,389 break fee payable to Larvotto. Hammer’s board unanimously recommends the scheme, subject to no superior proposal and the independent expert’s conclusion.
