PERTH (miningweekly.com) – ASX-listed Canyon Resources will raise A$10-million through a share placement to fund a definitive feasibility study on the Minim Martap bauxite project, in Cameroon, and to advance strategic project and offtake discussions.
Canyon on Monday announced that it would place 100-million shares, at a price of 10c each to institutional, sophisticated and strategic investors. The placement will be made under the company’s existing capacity, and will not require shareholder approval.
Strategic investor Peter Su has become a cornerstone investor in Canyon, taking up A$5.6-million of the placement, and a 9.4% stake in Canyon.
Under the terms of the subscription agreement, Su will be appointed to the board of directors, and will have the right to appoint a second director to the company, subject to maintaining a minimum shareholding of 7.5%.
“Canyon is very pleased to welcome Su and a number of new institutional investors to the register and recognises the continued strong support from our existing shareholders. The high level of demand for the placement is a recognition of the strategic nature of the Minim Martap project,” said Canyon CEO Phillip Gallagher.
Canyon recently reported a maiden probable reserve of 97.3-million tonnes, at 51.1% total alumina and 2.3% total silica at the Minim Martap project, which supports a planned mine life of 20 years.
A prefeasibility study previously estimated that the Stage 1 project could support a production rate of five-million tonnes a year, at a capital cost of $120-million. The study estimated that the Stage 1 project would have a net present value of $291-million and an internal rate of return of 37%.