Having completed the sale of three sub-blocks at its Mount Hope South tenements in Queensland, Hammer Metals (ASX:HMX) has enjoyed a $4 million windfall while staking its claims as Carnaby Resources’ (ASX:CNB) largest shareholder.
Under the agreement, Carnaby has acquired an initial 51% interest in the subblocks for $4 million in cash and just over 9 million shares at $0.55 each, which are to be escrowed for 12 months.
As a result, Hammer’s total shareholding in Carnaby stands at 5.6%.
Hammer, which has a market capitalisation of $35.45 million, says the total consideration payable by Carnaby for the Mount Hope sub-blocks is up to $20 million.
A further $5 million cash payment will be payable to Hammer upon a decision to mine, which will increase Carnaby’s interest to 70%.
Hammer will hold the remaining 30% equity and will be free-carried to production.
A final $6 million cash payment will be made upon a final investment decision for any separate new development on the sub-blocks. This could include the South Hope, the Mount Hope U/G Extensions, and the Stubby prospects.
Hammer Metals Managing Director Daniel Thomas says the company has completed its preparations for an upcoming diamond drilling program at the Hardway prospect.
A geophysical crew will be on site in the coming days to conduct a downhole electromagnetic survey.
Once completed, the company anticipated to conduct diamond drilling towards the end of May 2024.
Hammer Metals is a diversified mineral explorer focused on its strategic tenement position covering 2,800km2 within the Mount Isa mining district.
Write to Aaliyah Rogan at Mining.com.au
Images: Hammer Metals
