(Updates with the stock movement in the headline and last paragraph.)
Evolution Mining (ASX:EVN) agreed to acquire Carnaby Resources (ASX:CNB) via a scheme of arrangement under which Carnaby shareholders will receive 0.0682 new Evolution shares for each Carnaby share held, valuing Carnaby at around AU$213 million, according to releases on the Australian bourse on Monday.
Following the proposed merger, Carnaby shareholders will own around 0.9% of Evolution, the filing said. The acquisition is expected to be completed by mid-November, subject to regulatory approvals, including Australian Competition and Consumer Commission merger clearance and court approval.
Carnaby's board unanimously recommended that Carnaby shareholders vote in favor of the scheme in the absence of a superior proposal and subject to an independent expert concluding that the scheme is in the best interests of Carnaby shareholders, per the filing. Carnaby's directors also committed to vote the around 7.3% of Carnaby shares which they hold or control in favor of the scheme.
The existing tolling and offtake agreements between Carnaby and Glencore will be terminated, which is expected to facilitate the integration of the Greater Duchess project into the Ernest Henry operations, Carnaby said in a separate bourse filing. In consideration, Carnaby will issue around 28.6 million shares to Glencore under its existing placement capacity, representing around 9.4% of Carnaby's issued share capital on a post-issue basis.
Evolution and Glencore separately agreed that any concentrate produced from ore extracted from Greater Duchess will be sold to Glencore under the existing Ernest Henry offtake arrangements between Evolution and Glencore. The companies also entered into a binding agreement for the toll treatment of third-party ore produced through the Ernest Henry processing facility.
Carnaby Resources shares surged 60% in recent Monday trade, while Evolution Mining gained over 3%.