How Will Canyon’s A$215m Raise Transform Minim Martap’s Future?

Strategic Funding Boost for Minim Martap

Canyon Resources Limited has announced a substantial A$215 million equity raising package designed to accelerate the development of its flagship Minim Martap bauxite project in Cameroon. The funding comprises a two-tranche placement to institutional investors and a significant options exercise by its major shareholder, Eagle Eye Asset Holdings (EEA).

The first tranche, an unconditional placement, raised approximately A$36 million, while the second tranche, subject to shareholder approval, involves commitments from EEA for A$100 million and Afriland Bourse & Investissement for up to A$70 million. Afriland, a subsidiary of Cameroon's largest financial services group, represents a strategic local partner, signaling strong institutional and governmental support for the project.

Shareholding and Strategic Partnerships

Following the completion of the second tranche, EEA will maintain a controlling 56.5% stake in Canyon, while Afriland will emerge as a significant 10.1% shareholder. This partnership not only strengthens Canyon’s capital base but also enhances its in-country network and presence, which is critical for navigating local regulatory and operational landscapes.

CEO Peter Secker emphasized the importance of Afriland’s involvement, noting it as a clear endorsement from Cameroon's financial sector and government. The increased investment in Camrail, the regional rail operator, is a strategic move to secure and de-risk the transport and logistics infrastructure essential for the Minim Martap project’s success.

Use of Funds and Project Outlook

The proceeds from the equity raising, combined with Canyon’s existing cash reserves, will be primarily allocated to the Minim Martap project development capital expenditure (A$206 million), increased investment in Camrail (A$46 million), and general corporate and offer-related costs (A$14 million). This financial strengthening positions Canyon with a robust pro-forma balance sheet, including A$175 million in undrawn debt facilities and A$266 million in cash.

The company remains on track to commence operations and achieve its maiden bauxite shipment in the first half of 2026, a milestone that could significantly enhance its market position in the global bauxite sector.

Regulatory and Market Considerations

While the funding package is a major step forward, Afriland’s investment is contingent upon several regulatory approvals from regional and national authorities, including the Banque des États de l'Afrique Centrale and the Government of Cameroon. These approvals introduce an element of uncertainty and timing risk to the finalisation of the strategic investment.

Additionally, the placement is not underwritten, which places some execution risk on the company to secure full subscription. However, the strong backing from major shareholders and local institutions provides a solid foundation for confidence.