Carnaby Resources is buying the Trekelano copper-gold project from Chinova Resources to add to its Greater Duchess development in North-West Queensland.

At the same time, it has entered into a binding term sheet agreement with Glencore for tolling and offtake for 100 per cent of the fresh sulphide ore and concentrate from the project.

“This is a transformative series of events for Carnaby,” managing director Rob Watkins said.

“The Trekelano acquisition is a rare opportunity to bolt on high-grade critical mass to the Greater Duchess copper-gold project, resulting in a proforma mineral resources increase of 27 per cent to 400,300 CuEq tonnes at 1.5 per cent CuEq.

“We have also secured a start-up processing solution through our partnership with Glencore, which involves an equity investment of $3.4 million.”

Carnaby has paid a $3 million cash deposit for Trekelano, to be followed by a final payment of $7 million to Chinova minus the environmental bond required to be placed with Queensland Treasury (estimated to be around $1 million).

To fund the acquisition and ongoing works, Carnaby is raising about $17 million via a two-tranche share placement. Glencore has agreed to subscribe for about 10.7 million new shares.

In addition, Carnaby directors have committed to subscribe for $500,000.

Adding Trekelano to the Greater Duchess project delivers an immediate material increase in scale and critical mass to de-risk its development.

As they are located within granted mining leases, Carnaby sees the Trekelano deposits as offering the fastest route through permitting and into production of all the Greater Duchess deposits.

The company said they had potential to be the first mined due to Trekelano’s production history, environmental bonds already in place and established baseline monitoring data.

The project, 70km south-east of Mount Isa, lies within a 20km radius of Carnaby’s existing Greater Duchess deposits.

The Trekelano total mineral resource estimate is 5.2Mt at 1.4 per cent copper, 0.4g/t gold (1.6 per cent CuEq for 85,000t CuEq).

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