PERTH (miningweekly.com) – ASX-listed Canyon Resources has announced a subscription agreement with Singapore-based Eagle Eye Asset Holdings (EEA) which could result in the investment of up to A$59.7-million.

EEA has agreed to subscribe for A$10.5-million of new fully paid shares in Canyon, at a price of 7c each, and to exercise its existing 202.9-million options at a price of 7c each to acquire the corresponding number of shares.

Following the satisfaction of shareholder approval, the agreement would provide Canyon with an initial capital injection of A$24.7-million.

Furthermore, the company will also issue EEA with 500-million new unlisted options, with an exercise price of 7c each and an expiry date of December 2026. The issue of the new options is subject to shareholder approval, with a meeting scheduled for November this year.

Canyon said on Thursday that the exercise of the new options would be subject to the grant of a mining licence for the company’s Minim Martap bauxite project, in Cameroon, as well as a binding contract for port access and rail transportation on terms relevant to the project.

“We welcome this ongoing show of support from EEA. This significant strategic investment demonstrates the commitment and enthusiasm EEA has for both Canyon and the Minim Martap bauxite project in Cameroon,” said Canyon CEO Jean-Sebastien Boutet.

“The ability of Canyon to attract investment of this calibre is further evidence of the quality of our world-class Minin Martap project. EEA has significant investments across various industries throughout the African continent and their knowledge base and ability to assist in moving resources projects through the mining life cycle makes EEA a welcome investor in, and partner for, Canyon. In addition, increasing the strength of Canyon’s balance sheet will assist the company as it progresses discussions with the government of Cameroon regarding the issue of a mining licence for the Minim Martap project and progressing toward production status.”

A bankable feasibility study into the Minim Martap project confirmed an initial 20-year mine life, with the project expected to produce 6.4-million tonnes of high-grade bauxite a year, based on an updated proven ore reserve of 108.91-million tonnes, grading 51.1% total alumina and 2% total silica, as well as a total mineral resource estimate of over 1-billion tonnes, at 45.3% total alumina and 2.7% total silica.

The study estimated that the project would require a capital investment of $253-million, and would have a C1 operating cost of $23.95/t of 51.1% alumina export product, making Minim Martap competitive in supplying some of the world’s highest-grade bauxite.

Canyon will be seeking shareholder approval for the appointment of Guarav Gupta as a nonexecutive director to the board, as a nominee of EEA. On the date of the placement and the issue of the new options, EEA will be entitled to nominate two additional directors to the board of Canyon.