Canyon Resources Ltd (ASX:CAY) has raised $5 million from institutional and sophisticated investors in a heavily oversubscribed share placement.
The placement comprises more than 32.2 million shares at a price of 15.5 cents per share.
The placement price represents an 8.3% discount to the 30-day volume weighted average price (VWAP) and a 16.9% discount to the 15-day VWAP.
Funds will be used to further develop Canyon’s Minim Martap Bauxite Project in Cameroon.
READ: Canyon Resources granted exploration permits for bauxite project in Cameroon
Canyon managing director Phillip Gallagher said the company was delighted to welcome new investors onto its register.
Gallagher said: “The investors have the capacity to support the company as we advance the Minim Martap Bauxite Project in Cameroon.
“We are now in a strong financial position as we start the exciting process of developing such a large-scale bauxite asset.”
Appointed corporate advisors
Canyon has also appointed BW Equities Pty Ltd, which was the lead manager of the placement, as the company’s corporate advisors.
The appointment is for an initial 12-month term and BW will assist Canyon with capital requirements, strategy and market communications.
BW will receive a monthly retainer of $5,000 for advisory services and will be issued an allocation of 5 million options to acquire Canyon shares at an exercise price of 20 cents and an expiry 36 months from the date of issue.
Funds to define maiden resource
Canyon will use funds raised in the placement to review existing data and conduct project studies, as well as undertaking confirmatory and exploration drilling.
The company aims to define an initial JORC-compliant resource after gaining a better understanding of the deposit’s geology.
Minim Martap is a large-scale project adjacent to Canyon’s existing Birsok Project.
Both are considered to be highly prospective for high-grade direct shipping ore bauxite and are around 10 kilometres from an operating rail line.