Austral Resources Moves on Hammer Metals After Larvotto Pulls Bid

Austral’s bid reflects a premium of 29.4% to the implied offer price of $0.067 per Hammer share under Larvotto’s proposal.

Austral will provide Hammer with an unsecured working capital facility of up to $6m on terms considered to be generally more favourable than the $4m facility offered by Larvotto, with a portion of the funds to be used to repay an outstanding Larvotto loan (including a $550,000 break fee incurred on termination of Larvotto’s proposal) and support Hammer’s ongoing operations through to completion of the acquisition.

Austral chair David Newling said the takeover marked an important step in Austral’s strategy to build a leading Queensland copper company.

“Hammer’s resource base and exploration portfolio are highly complementary to Austral’s existing operations, infrastructure, and development plans–the combination creates a stronger regional platform with potential to unlock significant value through greater scale, infrastructure utilisation, and future resource development,” he said.

“Together, Austral Resources and Hammer will create a stronger platform to pursue our ambition of becoming Australia’s next mid-tier copper powerhouse.”

Hammer chair Russell Davis believes Austral’s proposal would provide a compelling outcome for shareholders.

“The scheme delivers materially higher headline value and provides our shareholders with an expected 31.1% ownership interest in a larger Queensland-focused copper producer, developer and explorer,” he said.

“Austral’s existing oxide production at Mt Kelly , the planned restart of the Rocklands sulphide processing facility, and an ongoing regional consolidation strategy provide an attractive development and production pathway for the combined portfolio.”

“The proximity of our Kalman resource to Rocklands creates strong strategic logic and potential for it to become an important long-term source of sulphide feed.”