The Australian Stock Exchange-listed firm Canyon Resources has received binding commitments to undertake a $10 million placement. The funds will be raised through the issue of 100 million shares to institutional, sophisticated and strategic investors at 10 cents each.
The price represents a 33.3% discount to the close on 25th August of 15 cents and a 19.9% discount to the 30-day volume-weighted average price.
Acting as a Lead Manager, Ashanti Capital will receive four million unlisted options for 20 cents with an exercise date of three years from issue.
On a further move, 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.
Phillip Gallagher, CEO, Canyon Resources said: "Canyon is very pleased to welcome Mr Peter Su and a number of new institutional investors to the register and recognises the continued strong support from our existing shareholders.”
He also added: "This is an exciting time for Canyon as we are now funded to deliver the final feasibility studies and take the Minim Martap Project into the development phase.”
Su’s investment in the company will be made in two phases, with the first phase of A$2.8 million having been received. The second phase is aiming to be received by 25th September.
Under the terms of the subscription agreement, Peter 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%.
Peter’s onboard arrival and the company’s decision to raise A$10 million investment, will support Canyon to speed-up the development of the Minim Martap Bauxite Project in Cameroon, as well as provide assistance to project financing and bauxite off-take.
"I have invested in Canyon Resources as I believe the Minim Martap Project is the best bauxite opportunity in the world," Peter said.
"My family has long been involved in bauxite mining and alumina refining in China and I am looking to leverage my high-level contact in the bauxite and alumina industries in Australia and China to develop the project as quickly as possible," he added.
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