Hammer Metals (ASX: HMX) is in ‘confidential’ discussions regarding a potential merger with Carnaby Resources (ASX:CNB) while also diluting its interest in the joint venture with Sumitomo Metal Mining Oceania.
The company says discussions with Carnaby remain incomplete and are at a relatively early stage, adding there is no certainty that a transaction between two will eventuate.
Carnaby Resources notes today’s (14 February 2024) ASX release by Hammer Metals and confirms it has been engaged in preliminary discussions regarding a potential corporate transaction.
“Carnaby continuously assesses a range of opportunities that make strategic and financial sense and have the ability to deliver value for Carnaby shareholders.”
Hammer’s Mount Hope prospects are located within EPM26777, along trend from Carnaby Resources’ Nil Desperandum and Lady Fanny prospects and within Carnaby’s interpreted “IOCG structural corridor”.
Meanwhile, Hammer Metals expects to begin drilling in early March 2024 at its Shadow South iron oxide copper gold (IOCG) target within its Mount Isa East Joint Venture Project in North Queensland.
Managing Director Daniel Thomas says Shadow is a ‘large and compelling’ IOCG target, with ‘significant’ geophysical, geochemical, and geological characteristics.
“We are looking forward to seeing what this drilling can deliver.”
Hammer, which has a market capitalisation of $31 million, says Shadow is a coincident magnetic / induced polarisation (IP) anomaly and its proximity to the mineralised Shadow prospect is ‘highly encouraging’.
The company’s JV partner Sumitomo Metal Mining Oceania (SMMO) has reached a milestone $6 million of exploration expenditure under the JV and has elected to continue funding the project.
For now, Hammer has chosen to dilute its interest in the JV, preserving capital to focus on its wholly owned assets.
“This is another important and positive milestone for our Mount Isa exploration efforts and secures the continued support of Sumitomo Metal Mining as a valued strategic partner in this part of our portfolio.
Importantly, this will ensure that we have ongoing funding for exploration activity within the JV, with the first cab off the rank being the start of drilling in early March at the high-priority Shadow South IOCG target.”
Hammer has also received results from the 9-hole reverse circulation drilling program completed in November last year within the Mount Isa JV.
Thomas says the results include several relatively narrow but ‘high-grade’ and broad spaced mineralised intercepts, which are considered to be worthy of more follow-up work.
Hammer Metals is a mineral explorer focused on its assets across Australia. The company’s projects are considered to be prospective for copper, gold, cobalt, and molybdenum.
As of 31 December 2023, the company had $1.8 million cash at hand, according to its latest quarterly report.
Write to Aaliyah Rogan at Mining.com.au
Images: Hammer Metals
