Evolution Mining Ltd (ASX: EVN) shares are leaping higher today.
Shares in the S&P/ASX 200 Index (ASX: XJO) gold stock closed on Monday trading for $11.29. In early morning trade on Monday, shares are swapping hands for $11.78 apiece, up 4.3%.
For some context, the ASX 200 is up 0.8% at this same time.
Here's what's grabbing investor interest.
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Evolution Mining shares jump on acquisition
The Evolution Mining share price is enjoying a strong start to the week after the mining giant announced that it has entered into a scheme of arrangement to acquire Aussie copper and gold miner Carnaby Resources Ltd (ASX: CNB).
In a deal that values Carnaby at around $213 million, shareholders in the junior mining stock will receive 0.0682 new Evolution shares for each Carnaby share they hold.
That equates to an offer price of 77 cent per Carnaby share, which closed at 48 cents a share on Friday. The Carnaby share price is up 62.5% today on the acquisition news, at 78 cents.
The Carnaby board unanimously recommended the scheme, in the absence of a superior proposal.
The takeover could support Evolution Mining shares longer term. The company noted that it will incorporate Carnaby's advanced copper-rich Greater Duchess Project, located near Evolution's Ernest Henry Operations in Queensland.
The ASX 200 mining stock said this could deliver an extra 10,000 tonne of copper production per year from Ernest Henry.
As part of the deal, the existing tolling and offtake agreements between Carnaby and Glencore will be terminated. Evolution and Glencore have 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 scheme remains subject to the customary closing condition.
What did management say?
Commenting on the $213 million acquisition that's boosting the Evolution Mining share price today, CEO Lawrie Conway said, "The acquisition of Carnaby represents an exciting opportunity to add the Greater Duchess project to our portfolio and further consolidate our position in the highly prospective Cloncurry region."
Lawrie continued:
The close proximity of Greater Duchess provides an opportunity to increase copper production at Ernest Henry, utilising latent mill capacity and existing infrastructure.
The combination of Ernest Henry's Bert project and Greater Duchess enhances our ability to continue to maximise production and growth at Ernest Henry.
Carnaby managing director Rob Watkins added:
Following the release of the Greater Duchess PFS, Carnaby was well positioned to explore multiple pathways to advance the project, with one option being M&A.
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.
