Larvotto Resources will acquire Hammer Metals in a $55 million scheme delivering a 64% premium, while Hammer shareholders retain exposure to Western Australian gold assets through a demerger.
- Larvotto to acquire 100% of Hammer Metals via Scheme of Arrangement
- Hammer’s WA gold assets to be demerged to shareholders as SpinCo
- Transaction values Hammer at $0.067 per share, a 63.6% premium
- Larvotto to raise $15 million from Glencore to fund Mt Isa projects
- Hammer board and key shareholders support the Scheme unanimously
Larvotto’s $55 Million Hammer Metals Takeover with Asset Spin-Off
Larvotto Resources Limited (ASX:LRV) has agreed to acquire Hammer Metals Limited (ASX:HMX) in a $55 million deal that values Hammer at $0.067 per share, a premium of up to 75.9% over recent trading levels. The transaction, structured as a Scheme of Arrangement, will see Hammer shareholders receive 0.0455 Larvotto shares for each Hammer share held, alongside a concurrent demerger of Hammer’s Western Australian gold assets into a new unlisted company, Carnegie Exploration Pty Ltd (SpinCo), distributed in-specie to Hammer shareholders.
The deal delivers immediate value to Hammer shareholders, who gain exposure to Larvotto’s near-term production profile from its Hillgrove Project in New South Wales, targeting 92,000 ounces per annum gold equivalent over the first five years. Larvotto also brings a contiguous 900 square kilometre exploration package in the Mt Isa copper-gold-cobalt region, combining with Hammer’s advanced resource base to create a scaled critical minerals and gold business.
Demerger Preserves Value in Yandal Gold Assets
The demerger of Hammer’s Yandal Assets, including the Bronzewing South, Orelia North, and Mt Sefton gold projects, allows Hammer shareholders to retain direct exposure to these underexplored Western Australian gold projects through SpinCo. Shareholders will receive approximately one SpinCo share for every 29.795 Hammer shares held, implying an additional $0.007 per Hammer share in value. SpinCo will initially be unlisted, with future listing or strategic options to be assessed.
The transaction structure neatly separates the gold assets from the copper and critical minerals portfolio, providing clarity and focused investment opportunities for shareholders in each domain.
Larvotto’s $15 Million Equity Raise and Loan Facility Support Growth
To fund the enlarged Mt Isa portfolio, Larvotto has secured a binding subscription agreement with Glencore to raise approximately $15 million through a share placement priced at $1.53 per share, a 15% premium to Larvotto’s closing price before the announcement. Completion of this equity raising is conditional on the Scheme’s completion but not vice versa.
In addition, Larvotto has provided Hammer with an unsecured, interest-free loan facility of up to $4 million to support Hammer through to Scheme implementation. This facility underscores Larvotto’s commitment to a smooth transition and project advancement.
Strong Board and Shareholder Support with Premium Offer
Hammer’s board unanimously recommends the Scheme, citing the attractive premium and strategic benefits. Key shareholders representing 23% of Hammer’s shares have publicly committed to vote in favour, subject to an independent expert’s positive conclusion on the Scheme’s merits.
The total consideration values Hammer at a 63.6% premium to its 10-day volume-weighted average price and 75.9% premium to its 30-day VWAP, reflecting a significant uplift for shareholders. The deal also avoids the need for Hammer to conduct a near-term equity raising.
Transaction Timeline and Next Steps
The indicative timetable targets completion by mid-October 2026, with key milestones including court hearings, shareholder meetings, and regulatory approvals scheduled between August and October. The Scheme and Demerger are inter-conditional, ensuring coordinated execution.
Shareholders can expect detailed Scheme Booklets in August, followed by formal meetings to approve the transaction. Larvotto’s equity raising and operational plans for the combined portfolio will be closely watched in the lead-up to completion.
Bottom Line?
The Larvotto-Hammer deal offers Hammer shareholders a premium exit and ongoing exposure to distinct gold and critical minerals assets, but the future liquidity and strategic direction of the unlisted SpinCo remain open questions.
Questions in the middle?
- Will the unlisted SpinCo pursue an ASX listing or alternative strategic options post-demerger?
- How will Larvotto’s $15 million capital raise impact its ability to advance the Mt Isa copper and critical minerals projects?
- What are the risks if the independent expert’s report or shareholder vote does not support the Scheme?