Canyon Resources Ltd (ASX:CAY) has received binding commitments for a $10 million placement, which will be settled through the issue of 100 million new fully paid ordinary shares at 10 cents per share to institutional and sophisticated and strategic investors.
The placement was cornerstoned by a new strategic shareholder in Peter Su, who contributed around $5.6 million of the placement – representing a 9.4% shareholding in Canyon.
"Continued strong support"
Canyon chief executive officer Phillip Gallagher said: “Canyon is very pleased to welcome Peter Su and a number of new institutional investors to the register and recognises the continued strong support from our existing shareholders.
“The high level of demand for the placement is a recognition of the strategic nature of the Minim Martap project.”
A total of 52,906,783 shares will be issued pursuant to ASX Listing Rule 7.1 and 47,093,217 Shares will be issued pursuant to ASX Listing Rule 7.1A.
Appointment to the board
Su is a Perth-based strategic investor with a diverse range of business interests in Australia and overseas and under the terms of the subscription agreement, will be appointed to the company’s board of directors.
Gallagher said: “We are also delighted to welcome Peter Su to the board of directors.
“Mr Su has an extensive network of relevant business contacts in Australia and overseas regarding mining and mineral processing and has had a commercial interest in alumina refineries in China.”
The appointment will assist the company to accelerate the development of the Minim Martap Bauxite Project in Cameroon and to provide introductions and commercial assistance relating to bauxite offtake, EPCM and project financing.
“Best bauxite opportunity in the world”
Su said: “I have invested in Canyon Resources as I believe the Minim Martap Project is the best bauxite opportunity in the world.
“My family has long been involved in bauxite mining and alumina refining in China and I am looking to leverage my high-level contacts in the bauxite and alumina industries in Australia and China to develop the project as quickly as possible.”
Final feasibility studies funded
Gallagher said: “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.”
Funds from the placement will predominantly be used for:
- Delivering the DFS on the Minim Martap project;
- Corporate overheads and general working capital; and
- Advancing strategic project and off-take discussions.
Su’s investment will be made in two equal tranches, with the first tranche of $2.8 million already received and the second tranche to be received by September 25, 2020.
Su also has the further right under the agreement to appoint a second director to the company, subject to maintaining a minimum shareholding of 7.5%.
Under the terms of the placement, Ashanti Capital and arranging parties will receive 4,000,000 unlisted options exercisable three years from the date of issue at 20 cents per share.
The options will be issued using the company’s capacity under Listing Rule 7.1.
$7.2 million from the placement is expected to be received by 3 September, with shares expected to be issued by 7 September 2020.
The balance of the placement represented by Su’s second tranche of $2.8 million is due to be received by 25 September with shares expected to be issued by 29 September 2020.