Canyon raises $6.2m to progress bauxite beauty
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Investors have backed a $6.2m placement to advance Canyon’s Minim Martap project, a large, high-grade bauxite resource with promising green credentials.
Not a hard ask when the project has a big resource tonnage of 1 billion tonnes and grades of 45.3% aluminium oxide and 2.7% silica dioxide, which are comparable to tier one deposits in Cape York and Guinea.
This includes an ore reserve of 99Mt at 51.6% aluminium oxide and 2.4% silica dioxide, which Canyon Resources’ (ASX:CAY) says is enough to support a 4.9 million tonne per annum direct shipping bauxite ore plant with a mine life of 20 years.
With these solid credentials, it is little surprise then that the company has received firm commitments to raise the funds through a placement of more than 77.25 million shares priced at 8c each.
Proceeds from the placement will be used to deliver the feasibility study for the Minim-Martap project.
It will also be used to advance strategic projects and offtake discussions as well as for corporate overheads and working capital.
“Canyon acknowledges the continued strong support from our existing shareholders, including major shareholder, Mr Peter Su. Additionally, we welcome a number of new sophisticated and institutional investors to the Canyon register,” managing director Phillip Gallagher said.
“The placement will allow Canyon to complete the Feasibility Study and progress the delivery of important agreements required for the development of the Minim-Martap project with the Government of Cameroon and potential project partners.”
The large resources available at the Minim-Martap project in central Cameroon are reason enough for the strong response to its share placement. But it is not the only reason.
Foster Stockbroking recently noted in a research note that the project possesses one of the highest available alumina and lowest reactive silica of global bauxite projects and mines.
Both factors translate to potentially greater alumina recovery, low caustic soda consumption, less red mud waste and lower energy consumption.
This makes Minim-Martap even more attractive as a green project, a point that will be increasingly important as investors put more stock into 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.