Canyon Resources fights back against A2MP's low-ball takeover bid

Canyon Resources' independent board committee says A2MP's AUD 0.05 (USD 0.036) offer materially undervalues the Cameroon-focused bauxite developer as questions also emerge over A2MP's potential ties to another major shareholder.

Canyon Resources' independent board committee has recommended that shareholders reject a takeover offer from majority owner A2MP Investments, arguing that the bid materially undervalues the company and its Minim Martap bauxite project in Cameroon.

A2MP, which controls 55.56 per cent of Canyon through associates, launched a conditional cash offer on July 29 to acquire the Canyon shares it does not already own for AUD 0.05 (USD 0.036) per share.

The offer values Canyon at approximately AUD 103 million (USD 73.8 million).

The independent board committee, including nonexecutive chair Mark Hohnen, said the offer is not fair or reasonable to shareholders, particularly minority shareholders given A2MP's existing controlling position.

Canyon says A2MP's offer materially undervalues the company

The AUD 0.05 (USD 0.036) offer price represents a 42 per cent discount to Canyon's closing share price of AUD 0.087 (USD 0.062) on July 28.

It is also a 47 per cent discount to Canyon's 30-day average share price of AUD 0.094 (USD 0.07), and a 62 per cent discount to its six-month average share price.

Canyon's independent committee said the total offer value of AUD 103 million (USD 73.8 million) is less than the capital spent to deliver first shipments from Minim Martap.

The company is developing the Cameroon-based project, which Canyon describes as one of the world's richest bauxite deposits.

Rather than accepting the offer, the independent committee said Canyon would prefer to continue pursuing credible funding alternatives to advance Minim Martap.

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Takeover battle turns on Minim Martap's economics

According to Canyon, A2MP's argument centres on lower product pricing assumptions, higher freight costs and increased capital requirements, which it believes have reduced the project's value.

Canyon's independent board committee has rejected those assertions, saying they should be supported by sufficient independent analysis rather than A2MP's own assessment.

The committee said A2MP's position was not supported by an independent technical study, an updated feasibility study or expert reports.

Canyon has instead pointed to an independent bauxite market review by CM Group in August.

The company said the review found that long-term base-case pricing assumptions for Minim Martap remain supported, with assumptions of USD 78 to USD 86 per tonne for premium product containing 51 per cent total alumina and about 2 per cent total silica.

Canyon has also said it secured contracts for key operating-cost inputs at prices below the assumptions used in the project's definitive feasibility study.

Shareholders raise questions over A2MP and WMA

The takeover has also attracted scrutiny over A2MP's potential relationship with World Metal Alloys (WMA), Canyon's second-largest shareholder with a 7.6 per cent stake.

Shareholders have raised questions about a possible connection between A2MP and WMA, particularly because WMA's stake could have been significant during Canyon's March capital-raising process.

However, whether WMA voted against the capital raising has not been disclosed and should not be presented as a confirmed fact.

The questions have also involved Pramod Prusty, who has been linked in shareholder discussions to WMA. A2MP has denied that Prusty worked for WMA and has said he has not worked for A2MP since going on gardening leave in September 2025.

The potential relationship therefore remains a matter of shareholder scrutiny rather than an established connection.

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Canyon seeks alternatives to fund Minim Martap

A2MP is seeking to acquire the Canyon shares it does not already own at AUD 0.05 (USD 0.036) each, while Canyon's independent directors argue that the offer does not adequately reflect the company's value or the prospects of its Cameroon bauxite project.

Canyon has said it would rather pursue credible funding alternatives to advance Minim Martap.

The two sides therefore have sharply different assessments of the project.

A2MP argues that weaker pricing assumptions, higher freight costs and increased capital requirements have reduced its value, while Canyon maintains that independent market analysis continues to support its long-term pricing assumptions.

For Canyon shareholders, the decision now centres on whether the AUD 0.05 (USD 0.036) offer adequately reflects the value of the company and its flagship bauxite development.

Canyon's independent board committee has recommended that shareholders reject the offer. The bid remains subject to its conditions, with the ASX recording the offer at AUD 0.05 per share and an offer period running through September 2026.

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