Select the edges that will be visible after smoothing our geometry.
Check both the front and the back for selection errors as any mistake could result in ugly geometry.
Chamfer your selection with a small, but visible amount and add a MeshSmooth modifier with 3 Iterations to the stack. for the hammer's body you can use cylinders and maybe a bit more of box modeling, which should be piece of cake after you've done this hammer head. ;)
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