Hammer Metals (ASX:HMX) has entered into a binding scheme of arrangement with Austral Resources Australia (ASX:AR1), as the Queensland copper producer is set to acquire all issued Hammer securities for approximately $80.7 million.
Concurrently, Hammer’s Western Australian gold assets currently held in Carnegie Exploration — including the Bronzewing South, Orelia North, and Mt Sefton projects — and other associated assets will be demerged via a capital reduction and in-specie share distribution to Hammer shareholders.
The scheme and demerger combined value Hammer at $0.087 per share, representing a 29.4% premium to the implied offer price under the previously announced scheme with Larvotto Resources (ASX:LRV).
Under the scheme, Hammer Metals shareholders will receive 1.2903 Austral shares for each Hammer share held, valued at $0.080 per share based on Austral’s closing price on 31 July 2026.
Shareholders will also receive $0.007 per share of implied value through shares in SpinCo.
In aggregate, Hammer shareholders will acquire approximately 31.1% of Austral and 100% of Carnegie Exploration or the resulting entity from the demerger.
The Hammer Metals board unanimously recommends the scheme in the absence of a superior proposal and subject to an independent expert concluding the transaction is in shareholders’ best interests.
Major Hammer shareholders controlling approximately 16% of the company, alongside board members representing 7% of shares, intend to vote in favour of the deal.
Chairman Russell Davis says the scheme delivers materially higher value than the Larvotto proposal and provides shareholders with an expected 31.1% ownership interest in a larger Queensland-focused copper producer and developer.
“Austral’s existing oxide production at Mt Kelly, planned restart of the Rocklands sulphide processing facility, and ongoing regional consolidation strategy provide an attractive development and production pathway for the combined portfolio,” Davis says.
“The board also believes Austral’s regional operating capability, processing infrastructure, and funding capacity provide a stronger platform to advance Hammer’s broader Mt Isa portfolio and unlock value from its substantial resource and exploration portfolio.”
The transaction creates an enlarged Queensland copper producer combining oxide production at Austral’s Mt Kelly facility, a planned sulphide processing restart at Rocklands, and regional exploration scale.
To support operations through scheme implementation, Austral has provided Hammer with an unsecured loan facility of up to $6 million.
Subject to court, regulatory, and shareholder approvals, the scheme meeting is expected to be held in October–November 2026, with implementation targeted for November 2026.
Just yesterday (10 August), Larvotto announced that it had decided to forfeit its proposal to acquire Hammer, with the board noting that the terms required to match Austral’s proposal would not “satisfy the value and return thresholds applied to all growth opportunities under Larvotto’s strategic plan”.
Hammer Metals is a mineral explorer focused on copper, gold, and critical energy metals, with major tenements in the Mt Isa region and WA’s Yandal Belt.
Write to Paula Fabe at Mining.com.au
Images: Mining.com.au
