ASX-listed Austral Resources Australia has submitted a definitive written and binding proposal to acquire fellow ASX-listed Hammer Metals by way of a scheme of arrangement for a total implied value of A$0.087 per Hammer share.

Austral states that the proposed merger of the two companies will create a larger copper producer, developer and explorer with substantial scale across Queensland, including ownership of the Mount Kelly (oxides) and Rocklands (sulphides) processing facilities and Hammer's highly prospective copper/gold exploration portfolio.

"We are pleased to have provided a binding offer to Hammer Metals. 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.

"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 midtier copper powerhouse," comments Austral chairperson David Newling.

Austral states that Hammer's project portfolio, including the Kalman copper/gold/molybdenum/rhenium resource, provides a potential long-term source of ore feed for Austral's Rocklands processing facility, resulting in operational synergies and eliminating the need for third-party processing.

The transaction also includes a proposed demerger of Hammer's Western Australian gold assets (the SpinCo demerger). The SpinCo assets include the Bronzewing South Project: a gold exploration project in the Yandal Greenstone Belt of Western Australia Orelia North; and Mt Sefton, which will be separated from Hammer prior to implementation under the proposed merger with Austral.

Hammer notes in a separate statement that the A$0.087-a-share offer from Austral represents a premium to the implied price of $A0.058-a-share offer made by Larvotto Resources to acquire all of Hammer's shares. The company's board of directors has determined that the Austral proposal is superior to the offer made by Larvotto.

Larvotto now has until August 10 to announce or formally provide a matching, equivalent or superior proposal to Hammer.