Canyon Resources has signed a subscription agreement with Singapore-based Eagle Eye Asset Holdings (EEA), which could lead to investment of up to A$59.7m ($38.24m)

Under the agreement, EEA will subscribe for A$10.5m of new fully paid shares in Canyon, with each share priced at A$0.07.

EEA will also exercise its existing 202.9 million options, at A$0.07 apiece, to acquire the corresponding number of shares.

Subject to shareholder approval, the agreement would provide Canyon with A$24.7m in initial capital funding.

Furthermore, Canyon will issue 500 million new unlisted options to EEA, with an exercise price of $0.07 for each share. It has an expiry date of December 2026.

Canyon said that the issue of the new options is subject to shareholder approval.

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The company noted that the exercise of the new options is subject to the mining licence grant for the Minim Martap bauxite project in Cameroon, and a binding contract for port access and rail transportation at this project.

Upon completion of the placement and exercise of existing options, EEA will own up to 40.61% of the issued share capital of Canyon.

EEA mining investments president and CEO Pramod Prusty said: “We are pleased to make this transformational strategic investment in Canyon. We strongly believe that the project can transform Cameroon and position the country as the new hub in the green bauxite and aluminium sector.”

Canyon plans to use the funds raised from the issue of placement shares and exercise shares for the Minim Martap project development.

The work includes a drilling programme, contracting and front-end engineering design works, among others.

Located in central Cameroon and situated near the main rail line linking the region to the Atlantic port of Douala, the Minim Martap project is expected to produce up to 6.4 million tonnes of high-grade bauxite per annum.