Hammer Metals Ltd announces divestment of equity in three Sub-Blocks at Mount Hope South tenement in Queensland

Hammer Metals Ltd (ASX: $HMX) has executed a binding agreement to divest equity in three Sub-Blocks at Hammer's Mount Hope South tenement in the Mt Isa region of Queensland to Carnaby Resources Limited for total consideration of up to $20 million.

Daniel Thomas, Managing Director of Hammer Metals, comments on the Transaction

The Transaction delivers very positive outcomes for both parties. We are extremely pleased to have realized this strong valuation outcome of up to $20 million for the three Sub-Blocks as part of this landmark transaction with our neighbor, Carnaby Resources. We see this as a good example of the emerging mining sector working collaboratively to deliver value to shareholders through a pragmatic and commercial approach to the advancement of copper-gold assets. With a material equity position in these Sub-Blocks, Carnaby will be well placed to progress the Scoping Study for the Greater Duchess Project, without the previous constraint of the lease boundary at Carnaby's key Mount Hope Central tenement. Importantly, Hammer shareholders maintain upside exposure to the future development of the three Sub-Blocks through the equity we will retain as well as the potential to receive future cash payments linked to a decision by Carnaby to mine at the Mount Hope Central and Mount Hope North deposits and a decision to progress open cut or underground operations from within the Sub-Blocks themselves. The consideration payable to Hammer has been designed to materially improve our liquidity position, with the receipt of upfront cash, along with shares in Carnaby and the prospect of further cash from achievement of project milestones. Hammer will now use its enhanced cash position to intensify our exploration efforts both at Kalman as well as at our other exciting copper prospects such as Hardway, Bullrush, and Mascotte, as we look to add to our existing copper inventory strategically located in the Mt Isa district of North Queensland.

Hammer Metals' divestment and outlook

Hammer Metals Ltd has successfully executed a binding agreement to divest equity in three Sub-Blocks at Hammer's Mount Hope South tenement in the Mt Isa region of Queensland to Carnaby Resources Limited for total consideration of up to $20 million. The transaction provides a non-dilutive liquidity injection, positioning Hammer to accelerate copper exploration in North Queensland. The company's enhanced cash position will intensify exploration efforts at Kalman and other copper prospects, strategically located in the Mt Isa district of North Queensland. Hammer Metals maintains upside exposure to the future development of the three Sub-Blocks through the equity retained and the potential to receive future cash payments linked to Carnaby's mining decisions. The transaction is expected to be completed before the end of April 2024, and the company looks forward to advising the market on the completion of the Transaction and timing as to when funds from the initial tranche of the consideration are received and the 9.1 million shares in Carnaby are issued to Hammer.