Evolution Mining (ASX: EVN) is set to acquire Carnaby Resources (ASX: CNB) in a $213 million deal that expands its copper production pipeline near Ernest Henry, leveraging existing infrastructure and latent mill capacity.
- Acquisition valued at approximately $213 million
- Greater Duchess Project adds potential 10ktpa copper production
- Scheme offers 60.4% premium to Carnaby’s recent share price
- Integration to leverage Ernest Henry’s processing capacity
- Scheme unanimously recommended by Carnaby Board
Strategic Acquisition Enhances Copper Growth Pipeline
Evolution Mining Limited (ASX:EVN) has entered a binding agreement to acquire 100% of Carnaby Resources (ASX:CNB) via a Scheme of Arrangement valued at approximately AUD 213 million. The deal brings the advanced copper-rich Greater Duchess Project into Evolution’s fold, located near its Ernest Henry Operations in North West Queensland. This acquisition is poised to add around 10,000 tonnes per annum of copper production by utilising Ernest Henry’s existing infrastructure and latent mill capacity, while complementing the ongoing Bert expansion project.
Greater Duchess Project Offers Immediate Production and Exploration Upside
Greater Duchess, currently at the Pre-Feasibility Study stage, boasts a Mineral Resource Estimate of 29.2 million tonnes grading 1.3% copper and 0.2 grams per tonne gold, alongside an Ore Reserve Estimate of 8.4 million tonnes at 1.7% copper and 0.3 grams per tonne gold. The project’s proximity to Ernest Henry offers a clear pathway to integrate ore sources, enhancing copper output and improving the operation’s cost profile. Evolution plans to update the Feasibility Study within 12 to 18 months to optimise the integration strategy and accelerate production ramp-up.
Scheme Terms and Shareholder Support
Carnaby shareholders will receive 0.0682 new Evolution shares per Carnaby share, implying an offer price of $0.77 each, a 60.4% premium to Carnaby’s closing price on 24 July 2026. Post-transaction, Carnaby shareholders are expected to hold approximately 0.9% of Evolution. The Carnaby Board unanimously recommends the Scheme, subject to the Independent Expert’s favourable opinion and absence of a superior proposal. Directors holding 7.3% of Carnaby shares have committed to vote in favour of the deal.
Integration and Offtake Arrangements with Glencore
To facilitate integration, existing tolling and offtake agreements between Carnaby and Glencore will be terminated. Evolution and Glencore have agreed that any concentrate from Greater Duchess ore will be sold under Ernest Henry’s existing offtake arrangements. Additionally, a new toll treatment agreement for third-party ore processed at Ernest Henry has been established on market-standard terms, underscoring Evolution’s intent to maximise operational synergies.
Positioning for Growth in a Tier-1 Copper-Gold District
Evolution’s Managing Director Lawrie Conway highlighted that the acquisition consolidates Evolution’s presence in the highly prospective Cloncurry region, unlocking value through regional consolidation and expanded exploration potential. The combined Greater Duchess and Ernest Henry tenement packages offer multiple priority targets, enhancing the long-term copper growth pipeline. This deal complements Evolution’s recent operational achievements, including record cash flows and steady production, positioning the company for sustainable growth in copper and gold production.
Bottom Line?
The Carnaby acquisition offers Evolution a strategic copper growth lever near Ernest Henry, but successful integration and regulatory approvals will be critical to unlocking value.
Questions in the middle?
- How will Evolution’s updated Feasibility Study reshape the development timeline for Greater Duchess?
- What are the key regulatory hurdles, including ACCC clearance, that could impact the Scheme’s timing?
- How will the termination of Carnaby-Glencore tolling agreements affect short-term operations and costs?