Carnaby Resources to Issue 28.6 Million Shares Valued at AUD 22 Million to Settle Glencore Agreement Termination Ahead of Evolution Mining Takeover

Carnaby Resources’ Position in Gold Mining and Its Acquisition by Evolution Mining

Carnaby Resources Limited (ASX: CNB, ACN 610855064) is an ASX-listed company operating in the resources sector. The company is undergoing a transformative acquisition by Evolution Mining Limited, a prominent Australian mid-tier gold producer. Announced on 27 July 2026, Evolution Mining is set to acquire 100% of Carnaby Resources’ issued shares through a scheme of arrangement. This acquisition marks a major milestone for Carnaby shareholders, integrating the company into a larger mining group with established production capabilities and market presence.

The timing of the share issuance is directly linked to the completion of Evolution Mining’s acquisition. Carnaby Resources’ update on 27 July 2026 provides full details of the scheme, and this formal notice of the proposed share issue ensures compliance with ASX Listing Rules and transparency for investors. The acquisition will significantly reshape Carnaby’s corporate structure and shareholder composition.

Share Issuance Driven by Termination of Glencore Tolling and Offtake Agreements

The 28,572,245 ordinary fully paid shares are being issued as consideration for terminating tolling and offtake agreements between Carnaby Resources and Glencore International AG. Such agreements are common in mining, where a toll operator processes ore or concentrate, and offtake contracts secure buyers for the processed products. These arrangements typically involve long-term commitments and substantial capital investment.

Terminating these agreements was essential for Evolution Mining to proceed with its acquisition of Carnaby Resources. Large-scale mining transactions often require restructuring or ending existing commercial contracts to integrate assets effectively. By compensating Glencore with equity rather than cash, Carnaby preserves liquidity while providing Glencore with shares in the combined entity. The consideration is valued at approximately AUD 22 million, reflecting the value of the relinquished operational rights.

Details of the Share Issuance and ASX Compliance

The proposed issue consists of 28,572,245 fully paid ordinary shares of the existing class, ranking equally with current shares from the issue date. These shares are unrestricted and not subject to voluntary escrow. The issue date is set for 4 November 2026, immediately following the shareholder meeting on 28 October 2026, where approval of Evolution Mining’s scheme is sought. This ensures issuance only occurs after scheme conditions are met.

Under ASX Listing Rule 7.1, Carnaby Resources will use its 15% placement capacity to issue these shares without requiring specific shareholder approval. No additional fees, underwriting, or broker commissions have been disclosed, simplifying the transaction.

Conditions Precedent Related to Evolution Mining Scheme

The share issuance depends on two key conditions: shareholder approval of the Evolution Mining scheme at the 28 October 2026 meeting, and the scheme becoming effective by 3 November 2026. These dates are estimates and may shift based on regulatory and court processes. If either condition is unmet, the share issuance will not proceed. Carnaby’s 27 July 2026 update provides comprehensive acquisition details.

Equity-Based Consideration and Valuation of the Settlement

The settlement with Glencore is entirely equity-based, with no cash payment. The 28,572,245 shares issued are valued at about AUD 22 million, implying an issuance price near AUD 0.77 per share. The company has not disclosed the specific pricing methodology or valuation rationale in this announcement but such information may be included in broader scheme documentation.

Impact on Shareholder Equity and Voting Power

This share issuance will increase Carnaby Resources’ total issued shares, diluting existing shareholders who do not participate. However, since the issuance occurs immediately after the Evolution Mining scheme becomes effective, existing shareholders’ interests will convert into Evolution Mining shares as part of the acquisition consideration. Investors should consider the overall acquisition context rather than focusing solely on dilution from the Glencore settlement shares.

Regulatory Process and ASX Quotation of Shares

Carnaby Resources has applied to ASX for quotation of the 28,572,245 new shares. The company has submitted the required Appendix 3B notification and will lodge an Appendix 2A form once the final number of shares issued is confirmed. Shares are expected to trade on a deferred settlement basis until scheme conditions are finalized.

The company confirmed that any resale of these shares within 12 months will comply with Corporations Act provisions via a cleansing notice, ensuring no undue selling restrictions. Carnaby does not intend to alter its dividend or distribution policy as a result of this issuance.

Evolution Mining Scheme Timeline and Next Steps

The acquisition is progressing through the scheme of arrangement process, with a shareholder vote on 28 October 2026. Upon approval and satisfaction of remaining conditions, the scheme is expected to become effective by 3 November 2026. The Glencore share issuance is scheduled for 4 November 2026, immediately after scheme effectiveness.

Investors should monitor the shareholder meeting and regulatory updates closely, as any delays or issues could affect the share issuance timeline. Carnaby Resources will provide further market updates as the transaction advances.

Risks and Contingencies Surrounding the Share Issuance

The main risk is failure to obtain shareholder approval or satisfy conditions by the specified dates, which would halt the share issuance and require renegotiation with Glencore. This could delay or complicate the acquisition process. Additionally, some shareholders may object to the settlement valuation or the board’s decision, potentially leading to legal challenges. Glencore’s role as a major counterparty also introduces risks related to commercial or legal disputes. The company has not disclosed dispute resolution details in this announcement.