Canyon Resources Ltd (ASX:CAY) has raised $2.5 million in a well-supported placement prompting the company to offer a share purchase plan to existing shareholders who were unable to participate in the placement.
The company has received commitments from existing and new institutional and sophisticated shareholders for the placement of 1.625 million fully paid ordinary shares at 16 cents per share.
As a result of the strong interest, an SPP to raise up to $1.5 million is being offered to eligible shareholders on the same terms and conditions as the placement.
Funds from the capital raising will primarily be used to accelerate the delivery of a pre-feasibility study (PFS) for the Minim Martap Bauxite Project in Cameroon.
"Delighted with response"
Managing director Philip Gallagher said: “Canyon is delighted with the response to this placement and would like to acknowledge the support of its existing shareholders.
“The announcement of the SPP will give all existing shareholders the chance to also participate in this capital raising."
In the placement, shares will be placed to institutional and sophisticated investors and completion is expected to occur this week.
The placement is being conducted within the company’s existing capacity pursuant to Listing Rule 7.1.
Eligible shareholders from Australia and New Zealand on the register as at the record date of 5pm (AWST) on December 13 will be able to participate in the SPP to subscribe for up to $30,000 shares at the same price as the placement.
Further information in relation to the SPP, including SPP terms and conditions, will be outlined in the SPP offer booklet, which is expected to be dispatched to eligible shareholders on December 23.
The indicative timetable for the SPP takes into account the fact that the SPP is being launched over the Christmas and New Year period.
"Robust, standalone project"
Gallagher said the capital raising would assist Canyon in accelerating the expanded stages 1 and 2 within the PFS.
“The recent announcements by Canyon of the upgraded Minim Martap resource and the scoping study results demonstrate that Stage-1 of Minim Martap is a robust, standalone project underpinned by a tier-1 bauxite resource."