CAY completes Camrail deal
Our 2025 Wise Owl Pick of The Year, Canyon Resources (ASX: CAY) now officially owns 9.1% of the Cameroonian rail operator Camrail.
Camrail is the owner of the 800km railway linking CAY’s deposit to port infrastructure.
And after today’s announcement CAY will own a piece of the company as well as a board seat - giving CAY oversight and direct influence over this critical piece of project infrastructure.
Bauxite is a bulk commodity - similar to iron ore.
Bulk commodities projects are usually made or broken by the availability of infrastructure and how much work needs to go into getting the raw material to a port for export into global markets.
Many who followed the BHP, RIO and FMG “rail wars” in the 2010s know how important rail access to a port is for exporting bulk commodities (like iron ore or bauxite).
Solving the “rail problem” is what made Fortescue the $52BN iron ore behemoth it is today - at the time a lot of the market thought they could never get it done…
After today’s news, CAY owns its own slice of already built rail infrastructure.
We covered the Investment by CAY in detail in a note a few weeks ago.
Check out that note here: Bauxite developer CAY to acquire 9.1% of Cameroon rail company, plus board seat
What we want to see next from CAY:
The slide below from CAY’s recent investor presentation gives a pretty good overview of what we can expect to see next:
(Source)
In the short term we are looking forward to seeing the results from the drill program, the upgrade to the JORC resource and of course, the results from the updated Definitive Feasibility Study.
That study was done using a US$45.20 per tonne bauxite price.
Bauxite prices are now above US$90...
We are expecting a big improvement in the Net Present Value (NPV) number when the updated DFS comes out in Q3.
A slide from CAY’s recent investor presentation gave us a pretty good idea of what to expect - with today’s spot prices more than quadrupling the projects NPV relative to the 2022 study:
(Source)
