Australian mining company Canyon Resources, whose Camalco Camalco subsidiary was established as part of the Minim-Martap bauxite project, has released a financial feasibility study conducted by its strategic partner MCC-CIE, detailing the financing of various aspects of the project. . One aspect concerns the implementation of development projects, a study of which estimates funding at 176 billion francs. This shell will be used to develop some infrastructure in the mining area; development of the internal railway line; financing of road transport, among other things.
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In particular, the trains planned to transport bauxite will be extended, each train will be between 600 and 1200 m long, new wagons and locomotives will be purchased, which will then be handed over to the Cameroon Railways operator (Camrail) at the end of the project. A MoU was also signed on April 13 between Canyon Resources via Camalco and Camrail. The aforementioned package also includes an investment of 13.516 billion Swiss francs in the Autonomous Port of Douala to develop a terminal dedicated exclusively to bauxite loading operations. A railway line will also be built inside the port to facilitate transportation to the respective terminal. Funding for these projects will come from a strategic agreement signed in August 2021 between Canyon Resources and China’s Zhongye Changtian International Engineering Corporation (MCC-CIE). The China Minmetals Corp-controlled entity also reaffirmed its commitment to the Australian junior mining company in a letter sent on 25 March 2022 to Cameroon’s Prime Minister Joseph Dion Nguta. “(MCC would like to) confirm its full support for Canyon Resources and the project. We wish the project success in the near future thanks to the efforts of experienced professionals, solid technical expertise and MCC’s assistance in financing the project,” the Chinese company wrote.
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Indeed, the agreement between Canyon Resources and MCC-CIE stipulates that “in line with the good cooperation between the parties during the BFS (banking feasibility study), Canyon and MCC-CIE will enter into a comprehensive strategic partnership. MCC-CIE, as a strategic partner, will provide the necessary assistance to Canyon to help attract and finance the project in China. MCC will also provide all necessary support to assist Canyon with technical, commercial and financial matters, etc.,” reads a press release published by Canyon Resources in August 2021.
The essential provisions of this agreement provide that, as part of their strategic partnership, the two organizations will jointly meet to facilitate the financing and implementation of the project; MCC-CIE will provide Canyon with all necessary support to the best of its ability to assist Canyon in technical, business, acquisition and financial matters; Memorandum of Understanding between CAY and MCC-CIE is valid until December 31, 2022; the parties agree to reach a more comprehensive legally binding agreement for the implementation of the project to replace the non-binding relationship established by the Memorandum of Understanding and the strategic Partnership Agreement.
It should be noted that the feasibility study defines operating and capital cost estimates with an accuracy of +/- 15% of the estimates used in the financial life cycle model of the mine to determine the economic aspects of the project.
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Sonamines to take 10% stake in Camalco
Following the issuance of a Minim Martap Bauxite Mining Permit to Canyon Resources, through its Camalco subsidiary, National Mining Company (Sonamines) will be allocated a 10% stake in Camalco in accordance with Article 59 of the Mining Code, which provides that “Granting Mining Permit shall result in the transfer to the state of ten percent (10%) of the shares or interests in the operating company, without ownership, without any fees.
The participation of the state cannot be diluted in case of an increase in the authorized capital.” The state can directly or through a public sector company take possession of these assets. When needed, he has Sonamines, which is his permanent division to manage his mining resources. However, in addition to the 10% it will inherit, Sonamines may also subscribe to a 25% stake in Camalco. If necessary, he will be subject to the same obligations as all other shareholders.