Evolution Mining to Acquire Carnaby Resources, Boosting Copper Output at Ernest Henry with Greater Duchess Project

Greater Duchess Integration to Expand Copper Production at Ernest Henry

Evolution Mining’s acquisition of Carnaby Resources strategically consolidates copper assets in North West Queensland’s Cloncurry region. The Greater Duchess Project, advanced to the Pre-Feasibility Study stage by Carnaby, offers Evolution a clear path to increase copper output at its established Ernest Henry Operations. The acquisition aims to capitalize on Ernest Henry’s existing processing capacity and infrastructure, integrating Greater Duchess ore into the current mill. The combined operation is expected to deliver an additional 10 kilotons of copper annually, enhancing growth prospects and operational efficiencies at Ernest Henry.

The close proximity of Greater Duchess to Ernest Henry offers significant operational benefits, underpinning Evolution’s strategic rationale. This acquisition not only secures an advanced ore body but also expands Evolution’s tenement holdings with multiple priority exploration targets near the existing operation. This consolidation aligns with Evolution’s strategy to build a portfolio of high-quality, long-life gold and copper assets in tier-1 jurisdictions. The acquisition strengthens Evolution’s presence in the highly prospective North West Queensland copper-gold district, adding scale and flexibility across production, development, and exploration.

Mineral Resource and Ore Reserve Estimates Support Greater Duchess Development

Carnaby Resources reported a Mineral Resource Estimate for Greater Duchess of 29.2 million tonnes grading 1.3% copper and 0.2 grams per tonne gold, as disclosed in its Pre-Feasibility Study on 16 March 2026. The Ore Reserve Estimate, which underpins the PFS development plan, totals 8.4 million tonnes at 1.7% copper and 0.3 grams per tonne gold. These estimates provide the foundation for the staged development approach now being advanced by Evolution following Scheme completion.

The ore reserve grade of 1.7% copper positions Greater Duchess as a significant source of additional copper concentrate for Ernest Henry’s milling infrastructure. Evolution will conduct an updated Feasibility Study post-Scheme, applying its own metal price assumptions, operating costs, capital expenditures, and operational parameters. This study will evaluate the optimal integration strategy and may refine the mineral inventory through further in-fill, step-out, and regional exploration drilling.

Acquisition Valuation and Premium to Carnaby Share Price

Under the Scheme, Carnaby shareholders will receive 0.0682 new Evolution shares per Carnaby share held on the Record Date. This share-based consideration implies an offer price of $0.77 per Carnaby share (rounded from $0.769978), valuing Carnaby at approximately $213 million on a fully diluted basis, including cash consideration for cancelling 5.52 million unlisted Carnaby options. The all-scrip offer enables Carnaby shareholders to participate in the combined entity while maintaining liquidity.

The Scheme Consideration represents a significant premium over Carnaby’s pre-announcement share price. The $0.77 offer price reflects a 60.4% premium to Carnaby’s closing price of $0.48 on 24 July 2026, the trading day before the announcement. Compared to the 30-day volume weighted average price of $0.59 up to that date, the premium is 31.4%. Post-acquisition, Carnaby shareholders will own roughly 0.9% of the combined Evolution entity, reflecting the relative company sizes.

Carnaby Board Unanimously Recommends Scheme with Director Support

The Carnaby Board unanimously recommends shareholders vote in favor of the Scheme of Arrangement, subject to no superior proposal emerging and the Independent Expert concluding the Scheme benefits Carnaby shareholders. This endorsement indicates the Board’s view that the offer price and strategic advantages justify approval. Directors representing 7.3% of Carnaby’s issued capital have confirmed their intention to vote their shares in favor, demonstrating alignment between management and shareholders on the transaction’s merits. This support is conditional, consistent with market norms requiring expert validation and absence of better offers.

Updated Feasibility Study and Integration Plan for Greater Duchess

Following Scheme implementation, Evolution will undertake an updated Feasibility Study for Greater Duchess, building on Carnaby’s prior work. This study will reassess integration options with Ernest Henry, focusing on cost-effective copper production growth. It will incorporate Evolution’s metal price forecasts, operating costs, and capital expenditure estimates, aligning the project with Evolution’s portfolio strategy and risk framework.

The study will include geological reinterpretation to support Evolution’s own Mineral Resource and Ore Reserve statements, development of an integrated life-of-mine plan with Ernest Henry, and optimization of mining and processing efficiencies. Concurrently, Evolution will pursue regulatory approvals and conduct additional drilling to de-risk and potentially expand the mineral inventory. The updated Feasibility Study is expected within 12–18 months post-Scheme, followed by a brief ramp-up to production.

Regulatory Approvals and Permitting for Greater Duchess

Carnaby has advanced permitting for Greater Duchess, but outstanding regulatory approvals remain. The March 2026 Pre-Feasibility Study anticipated a Feasibility Study completion by mid-2026, contingent on regulatory approvals and a Final Investment Decision. Evolution will manage these regulatory processes alongside technical studies. Securing Queensland state approvals, environmental clearances, and mining permits is critical before development and production can commence.

Evolution’s existing relationships with Queensland authorities through Ernest Henry Operations may facilitate smoother approval processes. Integrating Greater Duchess under Evolution’s established operational framework could streamline regulatory pathways. Nonetheless, obtaining formal permits remains a key execution risk and timing factor. Investors should monitor updates on regulatory progress and the updated Feasibility Study as indicators of project advancement.

Synergies with Ernest Henry Copper Expansion and Bert Project

Ernest Henry Operations is a long-life copper and gold asset with existing infrastructure, mill capacity, and skilled workforce. The Greater Duchess acquisition complements Evolution’s ongoing Bert expansion project at Ernest Henry, creating synergistic copper growth opportunities. Ernest Henry’s latent mill capacity can process Greater Duchess ore without significant additional milling capital expenditure, a major strategic advantage.

The combined Ernest Henry asset, Bert expansion, and Greater Duchess Project form a multi-phase copper growth pipeline in the Cloncurry region. This integrated approach enables optimized capital deployment and production sequencing across the three initiatives. Investors will likely watch for updates on the Bert expansion timeline and how Greater Duchess production will be phased relative to Bert and baseline Ernest Henry output. Consolidating copper assets under Evolution enhances value extraction and operational efficiency regionally.

Evolution Mining’s Strategic Focus on Tier-1 Jurisdictions

Evolution Mining Limited manages a portfolio of gold and copper assets across Australia, targeting high-quality, long-life assets in tier-1 jurisdictions. The Carnaby acquisition and Greater Duchess Project reinforce this strategy by consolidating copper assets in the highly prospective Cloncurry district of North West Queensland. Australia’s stable regulatory environment, developed infrastructure, skilled workforce, and political stability make it a preferred mining jurisdiction.

The Cloncurry region is a well-established copper-gold district with multiple economic deposits. Evolution’s expanded tenement position post-acquisition provides access to several exploration targets near Ernest Henry, increasing portfolio optionality and scale. This consolidation fosters operational synergies, shared infrastructure use, and integrated exploration programs, exemplifying Evolution’s M&A approach to enhance portfolio quality and asset efficiency within tier-1 jurisdictions.

Scheme Implementation Timeline and Conditions

The acquisition is structured as a Scheme of Arrangement, with a binding Scheme Implementation Deed signed on 27 July 2026. This merger mechanism under Australian corporate law requires approval by a majority of Carnaby shareholders (by number and value) and court sanction. The Independent Expert’s opinion on the Scheme’s benefits to Carnaby shareholders will influence voting and court approval. The Carnaby Board’s unanimous recommendation is conditional on the Independent Expert’s positive conclusion, reflecting standard market practice.

The update does not specify dates for the scheme meeting, shareholder vote, court approval, or completion. Investors should expect further announcements detailing these milestones. Upon Scheme implementation, Carnaby will become a wholly owned subsidiary of Evolution, and its shares will be delisted from the ASX. This transition will facilitate the updated Feasibility Study and Greater Duchess development, with the study expected within 12–18 months after completion.