Canyon Resources has received a significant boost for its Minim Martap bauxite project in Cameroon with its major shareholder, Eagle Eye Asset Holdings, providing a US$124 million debt facility to purchase the necessary rolling stock. This development marks a major step forward for the company as it prepares to commence operations at the high-grade bauxite project.
Canyon Resources ' plans to develop the Minim Martap bauxite project in Cameroon have received a significant boost, with the company's major shareholder providing a US$124 million (A$198 million) five-year debt facility to acquire the rolling stock essential for the development. Eagle Eye Asset Holdings , a Singapore-based family office that holds 41.
7% of Canyon, will finance the purchase of 22 locomotives and 550 wagons, along with a five-year warranty and service agreement for the acquired stock. This financing will be provided on an unsecured basis with a 12% interest rate. Canyon retains the option to utilize a third-party debt provider but can access Eagle Eye's financing by paying a $3.7 million underwriting fee.Canyon's latest reported cash position was around A$20 million. Jean-Sebastien Boutet, CEO of Canyon, stated that this debt facility would enable the company to finalize negotiations and place orders for the necessary rolling stock to transport ore from central Cameroon along the 800km-long existing rail line to the port of Douala on the Atlantic coast. Boutet emphasized that owning this haulage fleet would be a pivotal milestone, granting Canyon control over logistics, cost efficiency, and reliability. 'Having our own inventory of rolling stock will play a crucial role in mitigating potential logistical challenges, ensuring the reliability of the project over the long term, and strengthening our ability to maintain control over schedules and costs,' Boutet explained.Canyon holds mining and export permits but is still awaiting an access agreement for CamRail's rail assets. The company is confident that this agreement will be secured. The World Bank is currently funding an upgrade of the rail line. A definitive feasibility study, updating a 2022 bankable study, is expected to be released by mid-year. The earlier study estimated a US$250 million capital cost, with the locomotives and wagons accounting for approximately 50% of the capex. Payback was projected at four years. Conditions stipulated in the mining license mandate the commencement of development by September 2026.Canyon asserts that Minim Martap is poised to produce some of the highest-grade bauxite globally for an initial 20 years at an average 6.4 million tonnes per annum grading 51.1% alumina. Canyon has been engaged in developing the circa 1.03Bt project since 2018. Reserves stand at 108Mt at 51.1%. An updated resource is anticipated in the coming months. The 2022 BFS outlined a $78 million per annum free cash flow expectation and a $425 million net present value, with an internal rate of return of 22%. However, this work was completed under a significantly lower bauxite price environment, with an anticipated price of $45/t. At $79/t, the NPV rises to $1.9 billion. Bauxite has recently traded at record prices, nearly double the BFS estimate, primarily driven by increased Chinese demand. Aluminum demand is projected to reach 335Mtpa by 2050.Cameroon is eager to establish a presence in the bauxite market. While bauxite production is currently dominated by Guinea (70%) and Australia (25%), Cameroon, with its 91-year-old president, Paul Biya, who is anticipated to win re-election this year, aims to develop a substantial mining sector. The nation currently possesses modest bauxite production but boasts the world's fifth-largest reserves and bauxite resources at Minim Martap. Canyon has plans to develop a 1Mtpa alumina refinery once the mining operation is operational. It is reported that a BFS with a 'world-renowned alumina refiner' is about to commence. Canyon shares surged 4% this morning to 24c, reaching their highest level since 2012, capitalizing the company at $326 million. The stock has climbed 235% since the start of 2024
Bauxite Mining Cameroon Canyon Resources Eagle Eye Asset Holdings Minim Martap Alumina Refinery
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