CAY nears first production with trial mining starting this month
Our bauxite Investment Canyon Resources (ASX: CAY) just released an update for its project in Cameroon.
CAY is developing the Minim Martap Bauxite Project which is one of the world's highest grade bulk bauxite deposits - the project has an 1.102BN tonnes JORC resource.
And an Ore Reserve of 144Mt at 51.2% alumina and just 1.7% silica - enough for ~20 years of mining (even at CAY's phased ramp up to a 10mtpa production target).
Today CAY put out a development update which confirmed:
- The surface miner has completed commissioning and trial mining is set to get underway this month
- Discussions with Camrail continue looking to increase Cay's ownership above the current 9.1% to above 20%, targeting completion this quarter (Camrail is the national rail operator, so CAY having more of a stake here would give it much more of a say on upgrades etc).
- Offtake discussions with potential partners ongoing with the goal to secure agreements following the initial shipment of bauxite, giving potential customers a look at the product.
- First locomotives delivery remain on track (first 7 locomotives have shipped from China) with arrival mid-late Q2, shipments set to commence in Q3
- FIRST PRODUCTION REMAINS IN Q2 THIS YEAR.
The main takeaway for us was CAY confirming that its current cash position would be enough to get the company through to first shipment and cashflow.
(source)
After the second tranche of the last capital raise was voted down - funding was the main question the market would have had for CAY's project development timelines.
Now, CAY expects to have first production in Q2 2026, with the maiden bauxite trial shipment scheduled for Q3 2026, all remaining on schedule from recent prior updates.
Full-scale bauxite shipments are expected to begin in Q4 2026 following an extended commissioning and ramp-up phase.
CAY's locomotives are on the way to site too
CAY confirmed today that the first seven locomotives were shipped from China at the end of March and are expected to arrive at the Port of Douala in late Q2 2026, which gives time to meet the first shipment timeline.
CAY included a picture of one of the locomotives being lifted in preparation of shipment which happened late March:
(source)
Upgrade works on the haul road connecting the Daniel Plateau to the Inland Rail Facility are progressing on schedule, ready to support ore haulage from the mine once production starts.
CAY is also continuing offtake discussions with multiple potential partners, aiming to finalise agreements following the initial trial shipments.
That will give buyers the chance to confirm the high grade and purity of Minim Martap's bauxite firsthand.
Downstream processing study
CAY also has a study looking at downstream processing options, to be able to process the bauxite to aluminium in country.
This is an extremely energy intensive process which is only more topical given the price of oil and energy has increased, especially for Europe, Asia and Africa.
Cameroon has a plentiful supply of hydroelectric power, which has become a popular choice for aluminium production. (source)
So the current macro environment could also help with a more positive result from this study and incentivise CAY to more aggressively pursue this option.
CAY has a feasibility study incoming for a value-add alumina refinery in country - with the study scheduled for Q3-2026.
(source)
We think that this part of the CAY story is a lot more interesting now with all of the macro uncertainty around the world.
The bauxite smelting required to create aluminium is an incredibly energy intensive process (temperature up to 1,100deg celsius, source), which has become a concern during the Iran conflict.
The price of energy has gone up significantly for oil and gas, so If this conflict and supply issues were to drag on for months, this may be positive for CAY as some refineries use coal and gas for heat.
CAY is looking into building a downstream business to process its bauxite in Cameroon which has vast quantities of hydroelectric power.
Here is that energy premium getting built into aluminium pricing (as energy prices go up, so does the aluminium price):
(source)
Recently we listened to a Money of Mine podcast which was with Alan Clark from CM Group, who is dubbed "Aluminium Alan".
A key quote during the podcast for us was this:
"The demand for aluminium… It's just always going up and you know the world needs… at least one new smelter prime aluminium every year..." (09:45)
So there appears to be a long term market that CAY could become a part of in both the bauxite supply and refining/smelting in the not so distant future if the economics from this study stack up.
It's a great watch for anyone who wants a deep dive into the bauxite markets:
Why Aluminium Just Went Vertical - Money of Mine
What's next for CAY?
The key catalysts we will be looking out for over the coming months are:
- 🔲 An offtake deal that locks in a sale price for CAY's product (keeping in mind that CAY's bauxite is a premium product expected to fetch US$11 higher than market bauxite prices)
- 🔄 Trial mining to commence this month (the surface miners already on site and commissioned).
- 🔲 Locomotives arriving in country (first 7 shipped from China in late March, expected to arrive from mid-late Q2 and into Q3)
- 🔄 Road/rail infrastructure completion (expected to be ready during Q2 for ore haulage to the rail facility).
- 🔲 Alumina refinery Feasibility Study Q3 2026
We want to see CAY execute its development plan as they have outlined below, noting that today's update has some of these timelines sliding relating to train commissioning and first shipment:
(source)
