Evolution Mining will acquire Carnaby Resources in a $213 million deal, growing its copper pipeline in north-west Queensland by adding the advanced Greater Duchess project to its Ernest Henry operations.

The acquisition will be completed through a Scheme of Arrangement, with Evolution acquiring 100 per cent of Carnaby after the companies entered into a binding Scheme Implementation Deed.

Evolution managing director and chief executive officer (CEO) Lawrie Conway said the acquisition represents “an exciting opportunity” to further consolidate the company’s position in the highly prospective Cloncurry region.

“The close proximity of Greater Duchess provides an opportunity to increase copper production at Ernest Henry, utilising latent mill capacity and existing infrastructure,” Conway said.

“The combination of Ernest Henry’s Bert project and Greater Duchess enhances our ability to continue to maximise production and growth at Ernest Henry.

“Combining Carnaby’s Greater Duchess and prospective tenement package, together with Evolution’s established operating presence in north-west Queensland provides regional consolidation and has the potential to unlock value for both Carnaby and Evolution shareholders.”

Under the scheme, Carnaby shareholders will receive 0.0682 new Evolution shares for each Carnaby share held, implying an offer price of $0.77 per Carnaby share.

Evolution said the acquisition aligned with its strategy of building a portfolio of high-quality, long-life gold and copper assets in tier-one jurisdictions.

The company expects the addition of Greater Duchess to provide a growth opportunity capable of delivering around 10,000 tonnes per annum of additional copper production.

The Carnaby board has unanimously recommended shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to an independent expert concluding the transaction is in shareholders’ best interests.

All Carnaby directors, who collectively represent 7.3 per cent of the company’s issued shares, intend to vote their holdings in favour of the scheme on the same basis.

Carnaby managing director Rob Watkins said the company had assessed several pathways for advancing the Greater Duchess project following the release of its pre-feasibility study.

“Evolution’s offer follows a comprehensive strategic review undertaken by the board and its advisers, focused on identifying partners with the capability and expertise to develop Carnaby’s discoveries and maximise long-term value for all shareholders,” Watkins said.

“After carefully assessing the alternatives, including a standalone development scenario, the Carnaby board has determined the Evolution proposal represents the most compelling risk-adjusted value for Carnaby shareholders.”

Watkins said the transaction delivered an attractive upfront premium while providing shareholders with ongoing exposure to Greater Duchess through ownership in an ASX-50 gold and copper producer.

He also acknowledged the work of Carnaby’s employees and directors over the past seven years, highlighting exploration successes from the Nil Desperandum discovery in 2021 through to the recent Trekelano discovery, which helped build the Greater Duchess development opportunity.

Read more: Strategy rather than luck is key to industry growth, says Evolution’s Jake Klein

Subscribe to Australian Mining and receive the latest news on product announcements, industry developments, commodities and more.