Canyon in bauxite development partnership with engineering giant
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Canyon has reached a strategic partnership agreement with a Chinese engineering giant to progress development of the Minim Martap bauxite project in Cameroon.
Under the agreement and memorandum of understanding, Zhongye Changtian International Engineering Corporation of MCC (MCC-CIE) – the mining engineering division of global mining giant Metallurgical Corporation of China (MCC) – will assist the company in financing, off-take, technical and business issues associated with the project.
This represents an extension of Canyon Resources’ (ASX:CAY) existing relationship with MCC-CIE, which has been a bankable feasibility study contractor since December 2020.
MCC itself is no stranger to bauxite given that it is active in global bauxite mining and refining with mines in Africa.
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.
“Canyon has worked with MCC-CIE since late 2020 on the BFS for the Minim Martap Project and the signing of this strategic partnership and MOU is a very positive next step,” managing director Phillip Gallagher said.
“Executing the MOU with MCC-CIE is a testament to the sound relationship Canyon and MCC-CIE have established in a relatively short space of time, and MCC-CIE will introduce real options for project financing and off-take.
“It is a great benefit to Canyon to have a strategic partner with extensive experience in building and operating mining projects in Africa.”
Both parties will reach for a more comprehensive legally binding agreement for the implementation of Minim Martap to replace the non-binding relationship established through the MOU and Strategic Partnership Agreement, which expire on 31 December 2022.
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.