- 01Hammer approves Austral bid; 99.8% of votes cast in favour.
- 02WA gold demerger also approved.
- 03$80.8m deal advances Austral’s copper strategy.
Austral Resources’ (ASX: AR1) proposed takeover of Hammer Metals (ASX: HMX) has been approved by Hammer shareholders at a scheme of arrangement meeting held earlier this month.
The resolution was passed by the requisite majorities of Hammer — who collectively control 141 million shares, or 16% of the company — with 99.8% of the total number of votes cast in favour of the scheme.
Shareholders also voted in favour of the proposed demerger of Hammer’s Western Australian gold assets by way of a capital reduction and in-specie distribution.
Austral chairn David Newling said the strong level of support from Hammer shareholders reinforced the company’s confidence that the acquisition would accelerate the delivery of this strategy.
The board of Hammer had previously issued a unanimous recommendation that shareholders vote in favour of the scheme.
Mid-Tier Copper Powerhouse
Austral’s takeover represents an important step in its strategy to build Australia’s next mid-tier copper powerhouse, bringing together complementary copper resources, exploration opportunities, and existing processing infrastructure across the Mt Isa Inlier in north-west Queensland.
Austral made a bid to acquire Hammer in July for a total implied value of $0.087 per Hammer share, equating to $80.8 million equity and representing a 29.9% premium to an existing takeover bid by Larvotto Resources (ASX: LRV).
The offer consisted of equity in a new spin-off company housing Hammer’s WA gold projects at Bronzewing South, Orelia North, and Mt Sefton via a demerger to Hammer shareholders at the same $0.007 price per share agreed between Hammer and Larvotto.
It also contemplated the provision of a $6m working capital facility to Hammer, on matching or more favourable terms than a $4m facility offered by Larvotto.
Austral made moves to proceed with its proposal in August after Larvotto withdrew its right
to submit a counter-offer to Austral’s bid.
Queensland Portfolio
Austral’s portfolio comprises key assets across Queensland’s world-class copper terrain including the Mt Kelly processing facility, the Lady Annie project and surrounding infrastructure, and the Rocklands processing hub.
The company is currently targeting a recovery in copper production after its Mt Kelly operation produced 1,457 tonnes in the September quarter, 21% below the lower end of guidance.
December quarter output is expected to be in the range of 1,600t as newly exposed ore feeds its Western Operations, although a complete recovery remains subject to operating conditions.
Meanwhile plans remain on schedule to restart operations at the mothballed Rocklands hub in late 2027.
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