Canyon banks $5.6m to further advance their high-grade bauxite project
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Canyon is cashed up to progress its promising Minim Martap bauxite project after completing the first phase of its $6.2m placement.
The company has raised more than $5.6m from the issue of 70.48 million new shares priced at 8c each to new and existing institutional and sophisticated investors while the issue of the remaining 6.77 million shares to non-executive director Peter Su is subject to shareholder approval.
Besides funding the feasibility study, Canyon Resources (ASX:CAY) will also use the proceeds to advance strategic projects and offtake discussions.
The Minim Martap project in central Cameroon has a resource of 1 billion tonnes grading 45.3% aluminium oxide and 2.7% silica dioxide that includes an ore reserve of 99Mt at 51.6% aluminium oxide and 2.4% silica dioxide.
It is currently envisaged as a two-stage, two-port project with initial production exported through the port of Douala using existing rail and port infrastructure. The second stage unlocks more tonnes and reduces costs by utilising the planned rail extension to access the deep-water port of Kribi.
The first stage pre-feasibility study has already outlined a 5 million tonne per annum direct shipping ore project with low development capital requirements of just US$120m ($163.35m).
Average cash operating costs are estimated at US$35.1 per tonne while net present value and internal rate of return – both measures of a project’s profitability – are estimated at US$291m and 37% respectively.
The high-grade nature of the Minim Martap resource is expected to require less caustic soda consumption and lower red mud disposal costs, which also reduce its environmental footprint.
Energy requirements are also expected to be lower, a combination that will likely improve the project’s standing with investors interested in environmental, social and governance issues.
This article was developed in collaboration with Canyon Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.