Su takes Canyon cornerstone

BAUXITE hopeful Canyon Resources has just raised A$10 million via a placement, with around half coming from Perth-based investor Peter Su, who has taken a 9.4% stake in the company, and will join the board.
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Canyon has big plans for Cameroon

Haydn Black

Reporter

Su is chipping in $5.6 million at 10c per share in two tranches over the next month, with $2.8 million already received.
 
Canyon said Su was "actively involved in property investment and development in Australia and overseas", and his family had "historically held commercial interests in bauxite and alumina refining in China".
 
The board said Su would help Canyon accelerate the development of the Minim Martap project in Cameroon, and would provide introductions and commercial assistance relating to bauxite offtake, engineering and contracting options, and project financing.
 
Su has the right to appoint a second director to the board, assuming he maintains a 7.5% stake in the junior.
 
CEO Phillip Gallagher said the arrival of Su and other new institutional investors on the register meant the company was funded to deliver the final feasibility studies and pursue offtake agreements. 
 
Su described Minim Martap as "the best bauxite opportunity in the world". 
 
Canyon wants to initially develop a direct shipping ore stage using existing rail and port infrastructure, with a second, larger development involving a new 130km rail connection to Chinese-funded deepwater port at Kribi that would allow increased volumes and lower costs.
 
Earlier this month it released Minim Martap's maiden reserve estimate of 97.3 million tonnes at 51.1% total alumina and 2.3% total silica, which is sufficient to support a 5Mtpa operation for 20 years.
 
Resources are estimated at 892Mt at 45.1% aluminium oxide and 2.8% silica.
 
Stage one would need $118 million to develop, with cash costs below $40/t, and should generate free cashflow of $981 million, with project payback of four years, Canyon estimates.
 
The placement was priced at a 33% discount to Canyon's last trading price on August 25.
 
The company's shares fell 13% to 13c in morning trade, with the stock sold for between 5-21.5c over the last year.