Austral Resources Australia Submits Binding Hammer Metals Bid after Superior Proposal Finding

Austral Resources Australia (ASX: AR1) has submitted a definitive written and binding proposal to acquire Hammer Metals (ASX: HMX) through a scheme of arrangement, with Hammer board unanimously determining that the offer is superior to its existing transaction with Larvotto Resources (ASX: LRV).

The proposal values Hammer at approximately $80.7 million, or $0.087 per share, comprising 1.2903 Austral shares intended to represent about $0.080 and a further $0.007 attributable to a demerged vehicle holding Hammer’s Western Australian gold assets.

If implemented, the transaction would combine Austral’s Queensland copper production and processing infrastructure with Hammer’s regional resource base and exploration portfolio.

Hammer shareholders would own approximately 31.1% of the enlarged group.

Larvotto now has a five-business-day matching period, during which Hammer cannot enter a definitive agreement with Austral.

Regional Copper Platform

Austral considers Hammer’s Kalman copper-gold-molybdenum-rhenium resource a potential long-term feed source for its Rocklands processing facility, linking a stated 39.2 million tonnes mineral resource estimate grading 1.1% copper equivalent to infrastructure about 60 kilometres away by existing roads.

The combination would expand Austral’s resource inventory and tenement footprint across the Mount Isa region, including Hammer’s approximately 3,600 sq km of Queensland tenure and its interests in the Kalman, Overlander, Lakeview, Elaine, and Jubilee deposits.

Located 17km west of Cloncurry, Austral’s Rocklands flotation plant is being recommissioned for a targeted mid-2027 restart and offers a potential processing pathway for Hammer’s copper-gold sulphide resources without relying on a standalone development or third-party tolling arrangement.

The merged group could have a market capitalisation above $250m, while Austral expects its balance sheet and regional operating capability to support renewed exploration and portfolio development.

Offer Structure and Funding

Under the proposed structure, each Hammer shareholder would receive 1.2903 Austral shares for every Hammer share and retain ownership of the Bronzewing South, Orelia North, and Mt Sefton gold assets through the proposed SpinCo demerger, with existing Austral shareholders expected to hold 68.9% of the combined group.

Austral has offered Hammer a bridging facility of up to $6m to support operations during the scheme period, repay the outstanding Larvotto loan, and fund any break fee payable under the existing scheme implementation deed.

The Austral proposal is not subject to financing or due diligence conditions, although implementation remains conditional on Hammer shareholder and court approvals, a favourable independent expert conclusion, regulatory clearances, and completion of the SpinCo demerger.

Matching Period Sets Next Step

Larvotto’s matching right expires at 11.59pm AWST on 10 August, and Hammer cannot enter a binding agreement with Austral before that deadline.

There is currently no binding agreement between Austral and Hammer, and completion is not assured despite Hammer’s board having classified Austral’s proposal as superior.

“The transaction brings together two highly complementary Queensland copper businesses and provides a pathway to combine Hammer's high-quality resource base with Austral's existing processing infrastructure, operational capability and strong balance sheet,” chair David Newling said.

“We believe the combined group will be well positioned to accelerate development opportunities across the broader region and deliver long-term value for shareholders as we continue to build out Australia’s next mid-tier copper powerhouse."

Subject to the matching process and subsequent approvals, Austral’s indicative timetable targets a scheme booklet and first court hearing in September, shareholder and second court hearings during October or November, and implementation following that.