SYDNEY: Evolution Mining Ltd. announced Monday it has entered into a binding agreement to acquire Carnaby Resources Ltd. in a deal valued at approximately $213 million, bolstering its copper production pipeline at its Ernest Henry operations in Queensland.
Under the terms of the scheme of arrangement, Carnaby shareholders will receive 0.0682 new Evolution shares for each Carnaby share held. The offer implies a price of 77 cents per Carnaby share, representing a 60.4% premium to the closing price of 48 cents on July 24.
The acquisition incorporates Carnaby’s advanced Greater Duchess copper-gold project, located near Evolution’s existing Ernest Henry Operations in the Cloncurry region. Evolution said the project has the potential to deliver approximately 10,000 tonnes per annum of additional copper production by utilizing the Ernest Henry plant’s latent mill capacity and existing infrastructure.
“The acquisition of Carnaby represents an exciting opportunity to add the Greater Duchess project to our portfolio and further consolidate our position in the highly prospective Cloncurry region,” Evolution Managing Director and CEO Lawrie Conway said in a statement. “The close proximity of Greater Duchess provides an opportunity to increase copper production at Ernest Henry, utilizing latent mill capacity and existing infrastructure.”
Greater Duchess is currently at the pre-feasibility stage, with a Mineral Resource Estimate of 29.2 million tonnes at 1.3% copper and 0.2 grams per tonne gold, and an Ore Reserve Estimate of 8.4 million tonnes at 1.7% copper and 0.3 grams per tonne gold.
Evolution intends to complete an updated feasibility study within the next 12 to 18 months, focusing on integrating Greater Duchess into Ernest Henry’s life-of-mine plan. The company expects a short ramp-up period following the study’s completion before production commences.
The Carnaby Board unanimously recommended the scheme, absent a superior proposal, and subject to an independent expert concluding the deal is in the best interests of Carnaby shareholders. Directors representing approximately 7.3% of Carnaby shares have committed to vote in favor of the proposal.
Existing tolling and offtake agreements between Carnaby and Glencore will be terminated as part of the deal. Evolution and Glencore have separately agreed that any concentrate produced from Greater Duchess ore will be sold under Evolution’s existing offtake arrangements. The two companies also entered a binding agreement for toll treatment of third-party ore at the Ernest Henry facility.
The scheme remains subject to conditions including Carnaby shareholder approval, regulatory clearance from the Australian Competition & Consumer Commission, and court approval.
An indicative timetable expects the scheme meeting for Carnaby shareholders in late October or early November, with implementation targeted for mid-November.
Evolution Mining is a globally relevant gold miner operating six mines across Australia and North America. Carnaby Resources is an Australian exploration and development company focused on copper and gold projects in Queensland and Western Australia.
