Evolution Mining to Acquire Carnaby Resources in A$213 Million Deal with 60% Premium

Evolution Mining Moves to Acquire Carnaby at a Significant Premium

Evolution Mining Limited (ASX:EVN) has struck a deal to acquire Carnaby Resources Ltd (ASX:CNB) through a scheme of arrangement, offering Carnaby shareholders 0.0682 Evolution shares for each Carnaby share. This exchange ratio implies a value of A$0.772 per Carnaby share, representing a hefty 60.4% premium to Carnaby's last closing price of A$0.48 on 24 July 2026, and values Carnaby at approximately A$213 million on a fully diluted basis.

The Carnaby board has unanimously endorsed the transaction, citing the immediate premium, the de-risking of the Greater Duchess Copper Gold Project development through Evolution's expertise and balance sheet, and ongoing exposure to Evolution's gold and copper portfolio as key benefits. The board's recommendation is conditional on no superior proposal emerging and a positive independent expert opinion.

Deal Structure and Key Conditions

The scheme will see Evolution acquire 100% of Carnaby's shares, with unlisted Carnaby options to be cancelled for cash consideration funded by Evolution. The transaction includes the termination of tolling and offtake agreements with Glencore International AG, with Carnaby issuing approximately 28.6 million subscription shares to Glencore as compensation, representing about 9.4% of Carnaby's post-issue share capital.

The scheme is subject to customary conditions including court and shareholder approvals, regulatory clearances such as ACCC merger clearance, and no material adverse changes affecting Carnaby. The scheme meeting is expected between late October and early November 2026, with completion targeted for mid-November.

Strategic Implications for Greater Duchess Project

Carnaby's Managing Director Rob Watkins highlighted that following a comprehensive strategic review, Evolution's proposal offers the most compelling risk-adjusted value for shareholders. Evolution intends to develop the Greater Duchess project by processing ore at its Ernest Henry Operations, leveraging latent processing capacity and infrastructure. This approach de-risks the project compared to standalone development or tolling alternatives.

Evolution plans to complete an updated feasibility study post-acquisition, building on Carnaby's substantial groundwork. The Greater Duchess project boasts a Probable Ore Reserve of 8.4 million tonnes at 1.9% copper equivalent, underpinning its development potential.

Evolution Mining’s Profile and Financial Strength

Evolution Mining is a leading ASX:50 gold and copper producer operating six mines across Australia and Canada. In the 2026 financial year, it produced 715,000 ounces of gold and 66,000 tonnes of copper, generating operating mine cash flow of A$3.39 billion, including A$547 million from Ernest Henry alone. Evolution's strong balance sheet and dividend track record provide a stable platform for advancing Greater Duchess.

Next Steps and Shareholder Considerations

Carnaby shareholders will receive detailed scheme documentation, including an independent expert's report, ahead of the scheme meeting. All Carnaby directors, holding about 7.3% of shares, intend to vote in favour of the scheme, barring any superior proposal. Shareholders should note the transaction remains subject to regulatory and court approvals, and the independent expert's ongoing positive conclusion.

With the Greater Duchess feasibility study underway and recent exploration successes at nearby deposits, the transaction positions Carnaby's assets within a larger, financially robust operator. The integration with Ernest Henry's processing facilities could unlock operational synergies, but the ultimate value will hinge on Evolution’s updated feasibility outcomes and successful regulatory clearances.