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Hammer Metals is set to sell 70 per cent of its interest in three sub-blocks at Mount Hope in Queensland to Carnaby Resources for $20 million.

The blocks are located at Hammer’s Mount Hope South tenement and adjoin Carnaby’s Mount Hope Central discovery near Mount Isa.

Hammer Metas managing director Daniel Thomas welcomed the deal, which will see Hammer retain a 30 per cent equity in the package.

“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.”

Thomas emphasised the deal will position Carnaby to progress its Greater Duchess copper-gold project, which lies approximately 70km south of Mount Isa.

Standout prospects within the project include Mount Hope, Nil Desperandum, and Lady Fanny, Mount Birnie, Duchess, Big Beauty, and Freckle.

“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,” Thomas said.

Consideration from the initial tranche of payments from the deal comprises $4 million in cash and $5 million in Carnaby shares.

This will allow Hammer to intensify exploration drilling to increase its Mount Isa regional copper resource inventory.

A further $5 million in cash will be payable to Hammer upon a Mount Hope open pit decision to mine.

A final payment of $6 million in cash will be made upon a final investment decision for any separate new development on the sub-blocks, which could include prospects such as South Hope, Mount Hope underground extensions and The Stubby.