Larvotto Resources has bowed out of the race for Hammer Metals’ district-scale North-West Queensland copper-gold portfolio in the face of competition from Austral Resources Australia.

The company announced today that it would not exercise its right under the scheme implementation deed it entered with Hammer in June to submit a counterproposal to match Austral’s bid.

‘The Larvotto (ASX: LRV) board determined that the terms required to match the Austral (ASX: AR1) proposal would not satisfy the value and return thresholds applied to all growth opportunities under Larvotto’s strategic plan,’ it said in an update to the ASX.

Hammer Metals (ASX: HMX) controls more than 3600sq km of tenure in the Mount Isa district, including the Kalman, Elaine, Jubilee, Overlander and Lakeview projects.

It intends to terminate the Larvotto SID and enter into a definitive agreement with Austral as soon as it is able to do so. (It is not permitted to terminate the Larvotto deal until the expiry of the matching right period at 11.59pm tonight.)

Related: Glencore backs Larvotto in NW Qld copper push

Austral’s offer of $0.087 per Hammer share, structured as a scheme of arrangement, values the business at about $80.7 million.

Hammer shareholders will receive 1.2903 Austral shares per share under the deal, plus $0.007 through a spin-out of Hammer’s Western Australian gold assets.

They would end up owning about 31.1 per cent of the enlarged Austral.

Austral chairman David Newling said last week the deal brought together two highly complementary Queensland copper businesses and represented a pathway to build Australia’s next mid-tier copper powerhouse.

Hammer’s Kalman project alone hosts a mineral resource of 39.2Mt at 1.27 per cent CuEq for 420kt contained CuEq metal.

Austral said the deposit could feed its three-million-tonne-a-year Rocklands sulphide plant, about 60km away, which is due to be recommissioned in mid-2027.