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CAY receives key rail approvals

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Published 04-FEB-2025 10:00 A.M.

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Our 2025 Wise-Owl Pick of the Year just received key approvals for its “in-lan rail facility” from the Cameroon government.

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The news today comes only a week after CAY’s biggest shareholder Eagle Eye Asset Management underwrote a US$124M debt package for CAY to purchase a rail fleet for its project.

So now, CAY has approvals from the government to build its in-land facility & the underwriting needed to purchase its fleet…

CAY is making some strong progress on what we think is the most important part of developing its giant 1 billion tonne Bauxite resource.

Being a bulk commodity means transport infrastructure is often the most important part of the story.

The mining process is relatively simple, but often what makes or breaks these bulk commodity projects is how logistically complex it is to get the commodity to the port and shipped to customers.

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What makes or breaks these type projects is the infrastructure part of the story.

That’s why we think today’s announcement was really important in the overall context of CAY’s project.

After today’s announcement here is what the logistics story would look like for CAY:

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Why we think today’s news matters:

First, what is the “in-land rail facility”?

At a very high level, it's where all of the bauxite mined will be loaded onto trains before the trains take them to the port for shipment to customers.

CAY in its 2022 Bankable Feasibility Study had mentioned that the plan was to build the in-land rail facility next to an existing station (Makor Railway Station) so that the company would be tapping into existing infrastructure.

Today, that plan was approved…

The Cameroon government approved CAY’s location next to that existing railway station:

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Here is what the schematic drawings of the in-land rail facility would look like:

(The images are relatively blurry but they did help us visualise what was approved today)

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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:

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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.

The last time CAY put out a study for its project, the bauxite price was ~US$45.22 per tonne.

Since then the price has more than doubled…

Prices out of West Africa have recently gone above US$110 per tonne.

We are expecting a big improvement on the 2022 study numbers which showed a net present value (NPV) of US$452M from US$253M CAPEX over a 20-year mine life.

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