Austral Resources Australia is forging ahead with its strategy to become a Queensland copper powerhouse, with the Hammer Metals board unanimously backing its takeover offer.

The North-West Queensland copper producer has executed a binding scheme implementation deed to acquire 100 per cent of Hammer (ASX: HMX), after Larvotto Resources (ASX: LRV) yesterday confirmed it would not match Austral’s offer.

Implementation of the $80.7 million deal is expected around November, subject to court and shareholder approval.

The company plans to target Hammer’s Kalman project, with a resource of 39.2Mt at 1.1 per cent CuEq, as a feed source for its 3Mtpa Rocklands processing plant.

Related: QIC tips $15m into Austral’s Rocklands copper expansion plans

“The execution of the scheme implementation deed marks an important step in Austral Resources’ strategy to build a leading Queensland copper company,” Austral Resources (ASX: AR1) chairman David Newling said.

“Hammer’s resource base and exploration portfolio are highly complementary to Austral Resources’ existing operations, infrastructure and development plans.

“The combination creates a stronger regional platform, with the potential to unlock significant value through greater scale, infrastructure utilisation and future resource development.

“Importantly, the transaction delivers a substantial premium for Hammer shareholders while allowing them to retain meaningful exposure to the future growth of the combined business. Together, Austral Resources and Hammer will create a stronger platform to pursue our ambition of becoming Australia’s next mid-tier copper powerhouse.”

Hammer shareholders will receive 1.2903 Austral shares per share held, plus participation in the demerger of Hammer’s Western Australian gold assets into SpinCo.

Based on Austral’s August 7 closing price, the total implied value is about $0.100 per Hammer share, including $0.007 attributable to SpinCo.

Related: Larvotto cedes to Austral in Hammer Metals bid

Austral and Hammer have entered into a binding loan agreement for an unsecured loan facility of up to $6 million to support Hammer through to scheme implementation.

Hammer chairman Russell Davis said the Austral scheme delivered materially higher headline value than Larvotto’s proposal and provided Hammer shareholders with an expected 31.1 per cent ownership interest in a larger Queensland-focused copper producer, developer and explorer.

“Austral’s existing oxide production at Mount Kelly, planned restart of the Rocklands sulphide processing facility and ongoing regional consolidation strategy provide an attractive development and production pathway for the combined portfolio,” he said.

“In particular, the proximity of Kalman to Rocklands creates strong strategic logic and the potential for Kalman to become an important long-term source of sulphide feed.

“The board also believes Austral’s regional operating capability, processing infrastructure and funding capacity provide a stronger platform to advance Hammer’s broader Mount Isa portfolio and unlock value from its substantial resource and exploration portfolio.

“Importantly, Hammer shareholders will retain direct exposure to the value and exploration upside of the Yandal Assets through SpinCo, while the larger Austral loan facility provides additional funding certainty through to implementation of the scheme.”

Since its recapitalisation after going into receivership in 2024, Austral has completed a series of strategic transactions in North-West Queensland, including the acquisition of Rocklands from Copper Resources Australia the acquisition of Lady Loretta tenements from Glencore.

It is refurbishing the Rocklands plant and last week secured a $15 million investment from the QIC Queensland Critical Minerals Fund to assess lifting the plant’s processing capacity from 3Mtpa to between 4.5Mtpa and 6Mtpa.