Carnaby secures key Mount Hope ground in $20m deal

Prime Mount Hope copper-gold country is at the heart of a $20 million deal between active local explorers Hammer Metals and Carnaby Resources. It will see Carnaby acquire an initial 51 per cent beneficial interest in three sub-blocks surrounding its Mount Hope Central and Mount Hope North deposits, with the opportunity to take its total stake to 70 per cent. This allows Carnaby to expand open pits at its proposed Mount Hope mine, providing significant benefits in mine scheduling, capital expenditure and life of mine cashflow. The deal has put an end to discussions for a potential merger between Hammer and Carnaby. Related: Hammer and Carnaby in merger discussions Carnaby said its Greater Duchess scoping study would now focus on this enlarged open pit scenario, putting its expected release back by a month to May. "This is a great transaction for both companies and their shareholders," Carnaby non-executive chairman, Peter Bowler said. "For Carnaby it ensures we now have the unfettered ability to develop the Mount Hope Central and Mount Hope North deposits in the most optimal and unconstrained manner. "We look forward to advancing the Mount Hope development and the broader Greater Duchess scoping study which is expected to highlight the significant value our projects can deliver to Carnaby shareholders. "We are also highly encouraged by the exploration potential along the Mount Hope corridor both in the near-mine environment for direct extensions of the lodes into the area acquired and for mineable satellite deposits like South Hope and The Stubby where significant historical drill results have been recorded.” Related: Carnaby reveals new discovery at Greater Duchess Key terms of the transaction are: Carnaby will acquire an initial 51 per cent interest in the sub-blocks for $4 million in cash and $5 million in Carnaby scrip. Based on Carnaby’s current share register, this means Hammer will become Carnaby’s largest shareholder with a shareholding of approximately 5.6 per cent. Upon a decision to mine at either of Carnaby’s Mount Hope Central or Mount Hope North open pits,Carnaby will pay an additional $5 million in cash to Hammer and Carnaby’s interest in the sub-blocks will increase to 70 per cent. Profit generated from any ore mined within the Mount Hope Central or Mount Hope North open pits that is derived from within the sub-blocks will be shared based on the 70/30 ownership interests of the parties. Upon a positive final investment decision in respect of a separate new open pit or undergrounddevelopment to mine ore within the sub-blocks, Carnaby will pay Hammer an additional$6 million in cash. Carnaby will free-carry Hammer through to production from any new sub-block development. Hammer managing director Daniel Thomas said the transaction delivered very positive outcomes for both parties. "We are extremely pleased to have realised this strong valuation outcome of up to $20 million for the three sub-blocks as part of this landmark transaction with our neighbour, Carnaby Resources," he said. "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." Hammer would now use its enhanced cash position to intensify its exploration efforts at Kalman as well as at other exciting copper prospects in North-West Queensland such as Hardway, Bullrush and Mascotte, he said. You may also like: https://industryqld.com.au/hammer-strikes-34m-at-2-5-per-cent-copper-at-south-hope/

Carnaby secures key Mount Hope ground in $20m deal

Industry Queensland

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