HAMMER METALS LIMITED — M&A Activity 2013

Sep 9, 2013

==> picture [595 x 122] intentionally omitted <==

MT ISA PROJECT INTERESTS SALE UPDATE

10 September 2013. Santana Minerals Limited (‘Santana’) entered into an agreement with Hammer Metals Limited (‘Hammer’) as announced to the market on 2 July 2013 (‘the Agreement’).

The Agreement was and remains subject to a number of regulatory and performance requirements, including listing on a stock exchange and securing funding. Hammer has now entered into a contract with ASX listed Midas Resources Limited (ASX: MDS) (‘Midas’) which will enable Hammer to satisfy the listing requirement under the Agreement and will provide a pathway to meet funding requirements.

Whilst the contract between Hammer and Midas is also subject to a number of commercial and regulatory approvals it is a positive announcement and consistent with Santana’s objective to advancement of the Mt Isa projects for benefit of our shareholders yet allowing all company funding to focus on the Mexican projects: Espiritu Santo and Namiquipa. The Hammer – Midas transaction also delivers a further opportunity of exploration exposure to the historic Mt Morgan gold-copper district.

Attached is a copy of the Midas ASX announcement of today.

For further information, please contact: Tony McDonald, Managing Director, or Craig McPherson, CFO and Company Secretary +61 7 3221 7501 or admin@santanaminerals.com

About Santana

Santana is a precious metals explorer. Santana is currently focused on Mexico where it is actively exploring the Namiquipa silver project in northern Mexico, and the Espiritu Santo gold/silver project in Jalisco.

Additional information about Santana and its projects is available on the website: www.santanaminerals.com

==> picture [594 x 65] intentionally omitted <==

==> picture [448 x 93] intentionally omitted <==

10 September 2013

Proposed Acquisition of Large Scale Queensland Copper-Gold Projects

The Board of Midas Resources Limited (“ Midas” or “the Company” ) is pleased to announce that it has entered into a Sale and Purchase Agreement ( “SPA” ) with Hammer Metals Limited ( “Hammer” ), pursuant to which Midas will acquire all of the issued capital in Hammer, as well as all of the issued capital of Mount Dockerell Mining Pty Ltd ( “MDM ”), a wholly owned subsidiary of Santana Minerals Limited (ASX: SMI) ( “Santana” ).

HIGHLIGHTS:

• Agreement to acquire 100% of Hammer and 100% of MDM (“Acquisitions”).

• Projects include 1600 km[2] of highly prospective ground in the base metals and gold rich Mount Isa Mineral Province (Qld) and 340km[2] near the famous Mount Morgan GoldCopper Deposit (Qld).

Kalman Copper-Gold-Molybdenum-Rhenium Deposit

Existing 61MT JORC Mineral Resource and additional high grade priority targets;

• Drilling in 2008 intersected high grade primary sulfides including 7.6m @ 23.4% Cu and 0.5g/t Au from 581.6m and 77m @ 1.4%Cu and 1.3g/t Au from 700m in hole K106A and 25m at 3.8% Cu and 0.94g/t Au from 712 m in hole K106C;

• Proximal to Hammer’s strategic and highly prospective Mount Isa tenement holding ;

• Tenements cover existing targets to the west of Kalman and along strike from Chinalco’s Elaine discoveries;

• Several Cu-Mo-Au prospects directly south of Kalman along the Pilgrim fault zone.

Mount Isa Projects

• Extensive package (1600 km[2] ) covering multiple iron oxide copper gold (IOCG) and shear hosted copper-gold targets

Golden Peaks Projects

• Right to farm-in to prospective volcanic sequence that hosts the 8 million ounce Mount Morgan gold-copper deposit;

• Significant copper, zinc, silver and gold mineralization intersected in previous drilling;

• Recent VTEM survey produces several high priority conductors.

Mt Philp Hematite Iron Deposit

• Hematite deposit 8km northwest of Kalman and within 25 km of major infrastructure;

• 30Mt JORC Resource established*;

• Located on a mineral development license application.

Upon completion of the Acquisitions Midas will hold highly prospective ground positions with established resources, and significant exploration upside, in two of Australia’s major mineral provinces with potential for rapid organic and corporate growth.

• (* Refer to Annexure 2 for Resource details.)

Completion of the SPA is conditional on (amongst other things) due diligence, any applicable regulatory and shareholder approval and Midas becoming entitled to acquire 100% of the capital of Hammer and MDM.

The Acquisitions are subject to shareholder approval which will be sought at a general meeting of Midas’ shareholders ( “Shareholders” ) to be held as soon as practicable after the date of this announcement. Shareholders will be sent a notice of meeting ( “Notice” ) with further details regarding the Acquisitions, and approvals sought, in due course.

1. TRANSACTION

Hammer is an Australian public company focused on the exploration and development of copper, gold and base metal deposits in Australia, in particular, pursuing opportunities in under-explored sections of Australia’s major mineral provinces that host known world-class deposits.

Santana is an Australian public company listed on the ASX (ASX: SMI) and born out of Cerro Resources focus on its gold and silver projects in Mexico. Santana’s Australian projects are held by its wholly owned subsidiary, MDM.

==> picture [268 x 338] intentionally omitted <==

Hammer and MDM Project Locations

Hammer is focused in two highly mineralized regions in Queensland – the Mount Isa Mineral Province in NW Queensland and the Mount Morgan region in Central Queensland.

2

Mount Isa Region

MDM holds all of Santana’s NW Queensland mineral interests in the Mount Isa Mineral Province including the Kalman and Mt Philp deposits. The MDM portfolio comprises 8 granted EPM’s, one EPM application and one MDL application covering approximately 332 km[2] .

Hammer also has 8 exploration permit applications within the Mount Isa Mineral Province covering approximately 1300km[2] that are considered prospective for iron oxide copper gold (IOCG) deposits and shear hosted copper-gold and gold deposits.

The tenement applications cover targets ranging from conceptual IOCG targets beneath shallow cover to defined copper and gold geochemical anomalies with outcropping copper mineralisation that have had no prior drilling. Sparse drilling in the Charley Creek tenement has returned intersections of up to 2 metres at 1.1% Cu and 2.5g/t Au with broad haloes of disseminated copper mineralisation.

The MDM tenements occur proximal to the Hammer applications and are considered to strongly enhance the prospectivity of Hammer’s Mount Isa region portfolio as a whole.

==> picture [408 x 378] intentionally omitted <==

Mount Isa Project Tenements

3

The Kalman molybdenum-rhenium-copper-gold deposit was discovered in October 2005 whilst deep drilling a known copper occurrence.

Extensive drilling since 2005 delineated an Inferred Mineral Resource of 61 million tonnes grading 0.32% copper and 0.15g/t gold, 0.05% Mo and 1.2g/t Re estimated to contain 30,000 tonnes of molybdenum, 2.3 million ounces of rhenium, 194,000 tonnes of copper and 295,000 ounces of gold. Included within this resource is a higher grade molybdenum rich zone of 25 million tonnes grading 0.11% molybdenum, 2.8g/t rhenium and 0.26% Cu.

A section of the resource is located within EPM13870 which forms part of the Pelican Joint Venture.

The deposit itself contains a number of high grade copper and molybdenum intersections including:

• 7.6m at 23.4% Cu, 0.5g/t Au & 20g/t Ag from 581.65m in K106A

• 77m at 1.4% Cu & 1.3g/t Au from 700m in K106A

• 25m at 3.8% Cu & 0.94g/t Au from 712m in K106C

• 51m at 0.58% Mo & 15.1g/t Re from 294m in K19

• 72m at 0.2% Mo, 4.4g/t Re, 0.5% Cu & 0.7g/t Au from 273m in K23

• 33m at 0.32% Mo & 10g/t Re from 212m in K52

• 51m at 0.38% Mo & 8.3g/t Re from 256m in K58

==> picture [416 x 149] intentionally omitted <==

7.65m at 23.4% Cu, 0.5g/t Au & 20g/t Ag from 581.65m in diamond drillhole K-106A

Preliminary metallurgical studies indicate that separate copper and molybdenum concentrates can be produced.

Further work at Kalman will focus on better defining and extending the high grade zones and also testing a number of the copper-gold-molybdenum targets in the Kalman area.

The Mount Philp iron deposit is situated 8km to the northwest of Kalman and within 25km of the Mt Isa - Townsville highway, rail and electricity supply infrastructure. The deposit occurs within Exploration Permits for Minerals (EPM) 14232 and 18116. An application has been lodged with the Queensland Department of Natural Resources for a Mineral Development Licence (MDL471) over the deposit.

The deposit was evaluated in 2010/2011 with a program of regional mapping, rock-chip geochemistry and drilling. The Mineral Resource is composed of 19 million tonnes of

4

Indicated Resource grading 41% iron and a further 11 million tonnes of Inferred Resource grading 34% iron.

The deposit occurs as a single north-northeast trending iron rich stratigraphic unit that extends over 4 kilometres within the Proterozoic Corella Formation that grades from haematitic quartzite through banded siliceous ironstone and siliceous ironstone into massive haematitic ironstone.

Preliminary metallurgical test work conducted in 2010 on samples from within the Inferred resource model, indicated the ability to produce a high grade (68% iron) product using flotation to remove silica. The flotation sighter test work produced an average 68% iron product at 77% iron recovery and 1.5% silica content. Further test work is to be conducted to optimise the flotation conditions to maximise iron recovery whilst still maintaining the low silica content in the final product.

Mount Morgan Region

Hammer also has entered into an agreement to earn an interest in the Golden Peaks Project from Perilya Limited whereby it can earn a 60% interest in the Golden Peaks Project by making expenditure on the projects of $4 million over 4 years, at which point Perilya can elect can contribute or dilute, in which case, Hammer’s interest would increase to 75%. The project is located in coastal central Queensland near the famous 8 million ounce Mount Morgan gold-copper mine and covers a substantial section of the host volcanic sequence to the Mount Morgan deposit.

==> picture [421 x 288] intentionally omitted <==

Golden Peaks Project

Studies point to Mount Morgan being a volcanic hosted massive sulphide (VHMS) deposit. These deposits often occur in deposit “clusters” within equivalent stratigraphy.

5

Hammer’s targets are large copper-gold and/or lead-zinc-silver deposits within the equivalent volcanic stratigraphy. There are a number of known occurrences and alteration zones within the project area with ore grades intersected in previous drilling.

Hammer has recently flown new-generation high-powered VTEM geophysical technique over the prospective sequences in order to locate the larger and perhaps obscured deposits which have not been located by the more conventional exploration techniques applied in the past.

The preliminary survey data was forwarded to Hammer’s geophysical consultants who have interpreted a range of conductors including several high priority conductors some of which correspond with known areas of alteration and mineralisation. New areas with clusters of anomalous conductivity and no previous exploration have also been identified.

Upon receipt of the final data more detailed assessment and modelling of the VTEM conductors will be undertaken.

Further details in relation to tenements and mineral resource estimates are located in Annexure B.

2. ACQUISITION TERMS

Under the SPA Midas has agreed to:

• (a) make separate offers ( “Offers” ) to Hammer shareholders and Hammer optionholders to acquire 100% of the issued capital of Hammer; and

• (b) acquire 100% of MDM from Santana.

The Offers and the Acquisitions are conditional on:

• (a) Midas obtaining all necessary regulatory and shareholder approvals required to complete the Acquisition, including amongst other standard approvals for an acquisition of this nature, approval to:

• i. change the nature and scale of Midas’ activities in accordance with Listing Rule 11.1.2;

• ii. allot and issue the consideration securities to Hammer shareholders and Hammer optionholders;

• iii. allot and issue the consideration securities to Santana;

• (b) Midas becoming entitled to acquire 100% of the capital of and MDM and Hammer as a result of each Hammer security holder accepting the Offers; and

(c) Satisfactory completion of due diligence.

The consideration to be paid upon completion of the Acquisitions will be:

• (a) the issue of 2,161,817,000 fully paid ordinary Midas shares which will be apportioned amongst the accepting Hammer shareholders in proportion to their shareholdings in Hammer (on a 120 for 1 basis);

6

• (b) the issue of 1,080,000,000 Midas options (exercisable for $0.002, on or before 30 June 2017) which will be apportioned amongst the accepting Hammer optionholders in proportion to their option holdings in Hammer (on a 120 for 1 basis);

• (c) the issue of 1,240,000,000 fully paid ordinary Midas shares to Santana; and

• (d) the issue of 800,000,000 Preference Shares to Santana (the full terms of the Preference Shares will be included in the Notice sent to shareholders).

Mr Alexander Hewlett (a director of Midas) is a shareholder, optionholder and director of Hammer.

The board of directors of the Company will not change as a result of the Acquisitions.

Midas will apply the escrow provisions set out in the ASX Listing Rules in accordance with the requirements of the ASX.

3. CAPITAL STRUCTURE OF MIDAS AT COMPLETION OF ACQUISITIONS

On the basis that Midas completes the Acquisitions on the terms set out above, Midas’ capital structure will be as follows:

	Shares	Options	Preference **Shares1 **
Current issued capital	2,823,767,029	2,500,0002	NIL
Issued pursuant to Hammer acquisition	2,161,817,000	1,080,000,0003	NIL
Issued pursuant to MDM acquisition	1,240,000,000	NIL	800,000,000
Issued to CPS Capital Group Pty Ltd	NIL	150,000,0003	NIL
Total	6,225,584,029	1,232,500,000	800,000,000

Notes:

1. The full terms and conditions of the Preference Shares will be included in the Notice to be sent to shareholders.

2. 500,000 exercisable for $0.16, expiry 15/11/2013; 600,000 exercisable for $0.10, expiry 31/12/13; 1,000,000 exercisable for $0.02, expiry 12/12/14; 150,000 ex $0.02, expiry 26/2/15; 250,000 ex $0.10, expiry 26/2/15. 3. Exercisable at $0.002 on or before 30 June 2017.

4. PRO FORMA BALANCE SHEET

The effect of the Acquisitions of the financial position of Midas is set out in Annexure A.

5. INDICATIVE TIMETABLE

The indicative timetable for completion of the Acquisitions, and the balance of the matters referred to above is set out below:

Event	Date
Execution and announcement of Sale and Purchase Agreement	10 September 2013
Offer documents for the Offers despatched to Hammer security holders	Mid-September 2013
Despatch of Notice of Meeting to Shareholders	Late-September 2013
General meeting of shareholders	Early November 2013
Completion of the Acquisitions	Mid-November 2013

• The above dates are indicative only and represent the current intentions of Midas. The above dates are subject to change.

7

Midas’ independent directors (Mr Patrick Corr and Nader El Sayed) consider that the projects to be acquired as a result of the Acquisitions provide Midas shareholders the opportunity to participate in potentially significant exploration and development of high quality, strategic copper, gold, iron ore, rhenium and molybdenum projects.

Midas will continue to progress and seek value from its existing projects, namely the Fortitude Deposit, Paterson Copper-Gold Project, Sunset Well, Leonora Projects, and the Mulga Iron Ore Project.

Yours faithfully

==> picture [128 x 45] intentionally omitted <==

Mark Pitts Company Secretary Midas Resources Limited

Competent Person Statement

The information in this release that relates to Mineral Resources and Exploration Results is based on information compiled by Mr Russell Davis who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Davis is a director, shareholder and optionholder of Hammer Metals Limited. Mr Davis has sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Mr Davis consents to the inclusion in this release of the matters based on his information and information presented to him in the form and context in which it appears.

The information in this release as it relates to Mineral Resources and Exploration Results was reviewed by Mr John Downing, who is a Member of the Australian Institute of Geoscientists and a full time employee of Midas Resources Limited. Mr Downing has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Downing consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

8

ANNEXURE A – PRO FORMA BALANCE SHEET

The unaudited balance sheet and the pro-forma balance sheet for Midas as at 31 July 2013 have been prepared on the accounting policies normally adopted by Midas to reflect the changes to its financial position. The historical and pro forma financial information is presented in abbreviated form, insofar as it does not include all of the disclosures required by Australian Accounting Standards applicable to annual financial statements. They have been prepared on the assumption that all shares and options proposed to be issued as part of the Acquisitions are issued. The pro forma financial information assumes that the Acquisitions will be accounted for by the acquisition of the Hammer and MDM assets and liabilities by Midas.

Current Assets Cash and cash equivalents Deposits Trade and other receivables Other financial assets Assets held for sale Total current assets Non Current Assets Other financial assets Plant & equipment Exploration and evaluation expenditure Other intangible assets Total non current assets Total Assets Current Liabilities Trade and other payables Interest bearing loans and borrowings Provisions Total current liabilities Total Liabilities Net Assets Equity Issued capital Reserves Retained losses Total equity attributable to equity holders of the parent Total Equity	The Company 31 July 2013 (Unaudited) $ The Company 31 July 2013 (Unaudited pro forma) $ 1,349,554 1,489,272 15,000 45,500 15,349 27,126 39,361 39,361 1,261,865 1,261,865
	2,681,129 2,863,124
	2 65,202 30,525 38,123 11,401,396 16,345,245 - 11,245
	11,431,923 16,459,815
	14,113,052 19,322,939
	279,509 282,574 187,224 195,724 114,429 114,429
	581,162 592,727
	581,162 592,727
	13,531,890 18,730,212
	29,791,144 33,991,144 113,772 1,250,713 (16,373,026) (16,511,645)
	13,531,890 18,730,212
	13,531,890 18,730,212

9

ANNEXURE B– ADDITIONAL INFORMATION

Tenement Details

Tenement Number	Project Name	Status	Number of	**Area (km2) **	Ownership
			Sub-blocks
Hammer Metals Limited Tenements – Mount Isa Region
EPM 19805	Devoncourt North	Contested	26	88	100%
		Application
EPM 19782	Devoncourt South	Application	43	146	100%
EPM 19783	Ashover North	Application	100	340	100%
EPM 19784	Ashover South	Application	100	340	100%
EPM 19785	Charley Creek	Application	47	160	100%
EPM 19818	Wishbone	Application	16	54	100%
EPM 25145	Duchess	Application	21	71	100%
EPM 25369	Rats and Mice	Application	34	92	100%
Sub-total			387	1290
Golden Peaks Project Tenements
EPM 15810	Golden Peaks	Granted	89	275	0% (Hammer
					can earn up to
					75%)
EPM 19831	Golden Peaks West	Granted	20	61	100%
MDL 13	Ajax	Granted		1	0% (Hammer
					can earn up to
					75%)
Sub-total			109	337
Tenement Number	Project Name	Status	Number of	**Area (km2) **	Ownership
			Sub-blocks
Mt Dockerell Mining	Pty Ltd Tenements – Mount Isa Region
EPM 13870	Pelican	Granted	22	59	51%
EPM 14232	Trafalgar	Granted	34	92	100%
EPM 15972	Pilgrim South	Granted	12	32	51%
EPM 16726	Malbon	Application	20	54	100%
EPM 16987	Devoncourt	Granted	12	32	100%
EPM 17453	Andrews	Granted	3	8	51%
EPM 17762	Trekelano	Granted	2	5	100%
EPM 18116	Malbon 2	Granted	5	14	51%
EPM 18320	Duchess	Granted	7	19	51%
MDL 471	Mt Philp	Application		17	100%
Sub-Total			127	332

10

JORC 2004 - Mineral Resource Tables

Domain	Tonnes	Mo	Re	Cu	Au	Mo	Re	Cu	Au
	million	%	**g/t **	%	**g/t **	Tonnes	Ounces	Tonnes	Ounces
	Copper Zone
EPM13870	36.7	0.06	1.46	0.31	0.15	20,400	1,717,000	112,300	173,000
EPM14232	24.1	0.04	0.79	0.34	0.16	10,000	609,200	82,400	121,900
Total Copper Zone (Including the Molybdenum Zone)	60.8	0.05	1.28	0.32	0.15	30,400	2,326,200	194,700	294,900
	Molybdenum Zone
EPM13870	18.8	0.11	2.84	0.23	0.11	19,900	1,726,000	42,600	67,600
EPM14232	7.4	0.12	2.56	0.34	0.17	8,900	609,200	25,300	40,800
Total Molybdenum Zone	26.2	0.11	2.77	0.27	0.13	28,800	2,335,200	67,900	108,400
Source: Kings Minerals NL 2010 Annual Report – Refer to ASX release by Kings Minerals NL (ASX:CJO) dated September 10, 2008 for full details of Mineral Resource Estimate Cut-offs: Open Pit (Cu 0.2%, Mo 0.02%), Underground (Cu 0.5%, Mo 0.05%)

Kalman Inferred Mineral Resource Estimate - Combined EPM14232 (Mt Dockerell Mining Pty Ltd 100%) and EPM13870 (Mt Dockerell Mining Pty Ltd 51%)

	Resource Category	Tonnes (Million)	Fe %	SiO2 %	P %	AI203 %	TiO2 %	LOI %
Geological Boundary
Haematitic	Indicated	12.78	48.82	27.55	0.01	1.14	0.34	0.30
Siliceous	Indicated	6.33	26.47	58.91	0.03	1.61	0.47	0.29
TOTAL/avg	Indicated	19.11	41.42	37.93	0.02	1.30	0.38	0.29
Haematitic	Inferred	4.63	47.78	28.85	0.02	1.58	0.38	0.26
Siliceous	Inferred	6.77	24.47	60.67	0.03	2.27	0.51	0.34
TOTAL/avg	Inferred	11.40	33.82	47.74	0.02	1.99	0.46	0.30

Mount Philp Mineral Resource Estimate

(Source: Cerro Resources NL (ASX:CJO) Scheme Booklet dated 22/3/2013)

11