Canyon Resources Ltd (ASX:CAY) recently considered developing its Minim Martap Bauxite Project in Cameroon in two stages.
Today the company has released a scoping study supporting a simple and effective stage one mining operation.
Stage one is expected to be a self-supporting bauxite mining operation with a simple, low cost and fast track path to market using existing rail and port infrastructure.
Stage two is anticipated to unlock higher export volumes and lower operating cost via the installation of the Kribi rail extension allowing access to a deep-water port.
Stage one a low-cost start-up option
As can be seen from the key economic outcomes of the scoping study below, stage one is a low capital start-up option with an estimated US$78 million in capex.
Because stage one will utilise existing rail which accesses a non-deep water port, the estimated production rate for stage one is three million tonnes per annum.
As can be seen below though, this starter operation is forecast to be profitable with a net present value (NPV) of US$171 million post-tax and payback period of three years.
The scoping study highlights the potential for a direct shipping ore (DSO) mining and logistics operation to deliver three million tonnes of seaborne product per annum from shallow open-cut mines.
The plateau-hosted, at-surface deposit is highly amenable to surface mining extraction methods where the DSO can be mined at low average strip ratios.
An 80-kilometre product haulage road is proposed to link the mining operations with the inland rail facility (IRF) at the rail station of Makor.
DSO will be trucked and loaded at Makor where it will be transported to the port of Douala to be unloaded, stored, loaded onto vessels and shipped.
Significant upside awaits in stage two
The objective of the scoping study was to determine the minimum-viable initial development solution to deliver a standalone bauxite mine with robust economics to act as stage one in a two-stage development.
Significant upside potential in volume, mine life and cost exist with the installation of a rail extension to the deepwater port of Kribi.
The Kribi-Link definitive feasibility study has been completed by the Cameroon Ministry of Transport and the funding and execution plan is underway.
The Kribi-Link provides the case for stage two of the two-stage, two-port development plan that is being developed in the PFS.
As can be seen in the timeline below, the project has the potential to be operational in 24 to 36 months.