Canyon Resources secures EEA subscription agreement for A$59.7 million investment

In a strategic move to propel its flagship project forward, Canyon Resources Limited, a bauxite development and exploration company, has unveiled a subscription agreement with Singapore's Eagle Eye Asset Holdings (EEA). The agreement bears the potential for an investment of up to A$59.7 million, indicating a significant financial boost for the company.

Canyon Resources is laser-focused on advancing the Minim Martap Bauxite project situated in central Cameroon. This project managed through its subsidiary Camalco, has already gained momentum with a promising Bank Feasibility Study confirming its profitability and long-term viability over an initial 20-year mining period.

Bolstered by a sizable high-grade mineral resource estimate, the project's potential was underscored by a defined Life of Mine Ore Reserve in June 2022. It projects an annual production of 6.4 million tonnes of high-grade bauxite.

The project's strength is underpinned by an updated proven ore reserve of 108.91 million tonnes, grading at 51.1 per cent total alumina and 2 per cent total silica. With an estimated capital investment of $253 million and a competitive C1 operating cost of $23.95 per ton of 51.1 per cent alumina export product, Minim Martap is poised to become a key player in the high-grade bauxite supply space.

The pact entails EEA's commitment to subscribe for A$10.5 million worth of new fully paid shares in Canyon at a rate of 7 cents per share. Moreover, EEA plans to exercise its existing 202.9 million options, priced similarly at 7 cents each, to acquire the corresponding number of shares. Upon securing shareholder approval, this move will infuse an initial capital injection of A$24.7 million into Canyon Resources.

Additionally, Canyon Resources is set to issue EEA with 500 million unlisted options, each carrying an exercise price of 7 cents and an expiration date in December 2026. However, the issuance of these new options hinges on shareholder approval, with a decisive meeting scheduled for November of this year.

The Minim Martap bauxite project is adding great value to Canyon's portfolio, boasting an impressive endowment of over 1 billion tonnes of high-grade, low-contaminant bauxite. The company's strategic vision aligns with securing a mining license, a binding port access contract, and rail transportation terms for the project in Cameroon.

Canyon CEO Jean-Sebastien Boutet expressed gratitude for EEA's ongoing support, which demonstrates the alignment of interests in the Minim Martap bauxite project. The agreement marks a pivotal juncture in Canyon Resources' journey, fortified by EEA's strategic partnership and a renewed impetus to drive the Minim Martap project towards successful production and long-term growth.

Going forward, Canyon Resources is also seeking approval for the appointment of Gaurav Gupta as a non-executive director to the board, representing EEA's interests. Upon the transaction's completion, EEA will further solidify its position by nominating two additional directors to Canyon's board.

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