ASX-listed Canyon Resources' major shareholder, Eagle Eye Asset Holdings (EEA), has agreed to underwrite the full debt requirements to finance the purchase of 22 locomotives and 550 wagons and the purchase of a five-year warranty and service agreement on the rolling stock for Canyon's Minim Martap bauxite project, in Cameroon.

The full underwritten loan amount stands at $123.96-million and, under the terms of the agreement, an underwriting fee of 3% of the total underwritten amount, equivalent to $3.72-million will be payable upfront to EEA and, where EEA is called upon under its underwriting, EEA will lend the money to Camalco Cameroon on an unsecured basis.

Canyon explains that the purpose of the financing is to allow Camalco to close out negotiations and then place an order for the delivery of the rolling stock for Minim Martap.

The company says the purchase of these long-lead items will mark a significant milestone for the project and will ensure control over logistics, cost efficiency and reliability, with investment into this essential infrastructure demonstrating unwavering confidence in the project.

Camalco is in advanced stages of agreeing the terms for access to the rail assets of CamRail.

Canyon says it is now working towards finalising the acquisition of the rolling stock.

Upon completion, the company says, the rolling stock will bolster Minim Martap’s logistical framework, underscoring Canyon’s commitment to rapidly develop the project towards production status, at a time when the definitive feasibility study (DFS) is in progress and on track for completion in the second quarter of this year.

“The securing of funding for the purchase of locomotives and wagons marks a significant milestone for Canyon and a major step forward in the development and de-risking of the Minim Martap project towards production.

“Having our own inventory of rolling stock will play a crucial role in mitigating potential logistical challenges, ensuring the reliability of the project over the long term and strengthening our ability to maintain control over schedules and costs,” says Canyon CEO Jean-Sebastien Boutet.

“The locomotives and wagons account for around 50% of the capital expenditure from the 2022 bankable feasibility study, so to secure an attractive funding solution for the purchase of these long-lead items is a very exciting and monumental step forward for the company and Minim Martap.

"I would like to thank our major shareholder EEA for their ongoing support of Canyon and Minim Martap. The impact EEA has and continues to have on the growth and success of the company is significant and I look forward to continuing to work with them and delivering on our vision.

“The execution of this underwriting agreement reflects the confidence of both our management team and EEA in the project’s success, even ahead of finalising the DFS. By securing the financing for these critical long-lead items, we are reinforcing our commitment to efficiently advancing the project into production and delivering long-term value to our shareholders,” Boutet continues.