CANYON RESOURCES LIMITED — Capital/Financing Update 2021

Feb 18, 2021

Announcement

19 February 2021

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Minister of Mines of Cameroon visits the Minim Martap Project

Highlights

• Canyon hosted a VIP site visit for the Minister of Mines, the Secretary of State and the Directors of the Ministry of Mines.

• Minister formally announced the transition to the Mining Phase of the Project.

• Overwhelming support from government representatives and local communities shown during the hosting of special events at the project site.

• Rick Smith appointed Camalco Director General and to reside in Cameroon to advance the Project development and Mining License negotiations.

• Port of Douala proposes a new deeper and even more suitable berthing location for Stage 1 exports

Canyon Resources Limited (ASX: CAY) ( Canyon, Company ) is pleased to provide an update on ongoing operations and the recent Ministerial visit to the Minim Martap Bauxite Project in Cameroon.

The Company is currently focussed on finalising key agreements with the Port of Douala and Camrail as well as completing technical studies for the Project bankable feasibility study ( BFS ) .

Mr Rick Smith has been appointed as Director General of the Canyon’s wholly-owned Cameroon subsidiary Camalco Cameroon SA ( Camalco ) and will be based in Cameroon. Mr Smith will focus on the delivery of the Project through key agreements with suppliers and Government.

Minim Martap Project Ministry of Mines Site Visit

On Monday 25 January 2021, Canyon Resources Managing Director, Mr Phillip Gallagher and the new Camalco Director General, Mr Rick Smith hosted a visit to the Minim Martap Project site by His Excellency Gabrielle Ndoko, the Minister of Mines, the Secretary of State to the Minister of Mines, the Governor of the Adamoua Region and other dignitaries.

The purpose of the site visit was for Camalco to present the results of the extensive exploration and geological research completed by the company on the Project and to discuss the development plans for the Project.

The presentation and meetings at the towns of Martap and Minim were chaired by the Minister of Mines and attended by local dignitaries and people from the local villages.

The meetings were overwhelmingly positive, and the Minister of Mines announced publicly that the Minim Martap Project would now be transitioning to the mining phase of the Project.

Canyon Managing Director Phillip Gallagher, with the Governor of the Adamoua Region, the Minister of Mines, Industry and Technological Development, and the Secretary of State to the Ministry of Mines

Canyon Resources Limited ACN 140 087 261

L9/863 Hay Street Perth WA 6000 | PO BOX 7606 Cloisters Square WA 6850 | p: +61 8 6382 3342 f: +61 8 9324 1502 | info@canyonresources.com.au | www.canyonresources.com.au

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Minister of Mines of Cameroon visits the Minim Martap Project

Appointment of new Director General of Camalco Cameroon SA

The Company has appointed Mr Rick Smith as Director General of Camalco. Mr Smith has been working with Canyon since March 2020 as Chief Development Officer and has agreed to accept the role of DG of Camalco and base himself in Cameroon for the crucial periods of the end of the feasibility studies and the commencement of construction of the Project.

Mr Smith was previously a senior executive, within Guinea Alumina Corporation ( GAC ), who successfully commissioned the USD$1.4 billion CAPEX, GAC Project. The bauxite mine is located in Tinguilinta, Guinea and is West Africa’s newest bauxite mine that will export 12 million tonnes per annum through its Kamsar bauxite port facilities which were commissioned in Q3 2019.

Mr Smith has more than 35 years’ experience in a variety of international locations relating to new markets, business development, exploration, feasibility studies and construction in bauxite and alumina projects. Mr Smith started with the GAC Project in 2013 as General Manager of Operations and Projects when the project was at a similar stage of development as Canyon’s Minim Martap Project in Cameroon. He oversaw the development of the project from its early stages, through to commissioning, including leading negotiations for rail and other infrastructure agreements with the Guinea Government. He remained a senior executive during the construction and commissioning of the project.

Infrastructure Update

During the recent visit, the Company held a working session with the Port Authority of Douala (PAD).

The senior port management proposed a new and even more suitable berthing site for Canyon, located on the main area of the port.

The proposed new berthing site has direct rail access within 100m of the berth. The water at the berth is approximately 9m deep and it is located on the Wouri Estuary.

The proposed site currently has an unused warehouse which will be demolished for the bauxite operations.

Canyon is currently working with the Port of Douala to incorporate the technical details of the proposed new berthing area into the BFS.

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Proposed berthing area with handimax ship berthed
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Direct rail access into the proposed berthing area

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Canyon Resources Limited

Minister of Mines of Cameroon visits the Minim Martap Project

Canyon Managing Director Mr Phillip Gallagher said, “I am very pleased with the positive start to the year following a pleasing visit to Cameroon. Canyon’s Cameroon subsidiary company, Camalco Cameroon SA, hosted a very successful site visit to the Minim Martap project site with His Excellency the Minister of Mines, the Secretary of State for the Ministry of Mines and the Governor of the Adamoua Region. Camalco demonstrated the high quality of work completed by our 100% Cameroonian technical team during the very difficult COVID period. The Minister of Mines publicly stated that he will work with the Company to take the project to the mining phase. We are pleased to have a pathway to finalising key agreements with the Government of Cameroon.”

During the visit we appointed Mr Rick Smith as DG of Camalco. It is very positive to have a person of Rick’s calibre and West African bauxite project experience based full time in Cameroon. Rick’s focus will be to lead the local commercial and legal negotiations to help deliver the Minim Martap Project into production, as he did in Guinea.”

Director General of Camalco Cameroon SA Mr Rick Smith said , “I am very happy to be appointed as the DG of Camalco and I am looking forward to working in Cameroon and developing the Minim Martap Project. I have lived and worked in West Africa for over a decade on bauxite projects and I am impressed with the infrastructure that we can utilise for the Project and by the quality of my team in Cameroon. In the short time that I have been in Cameroon I have visited the project site and all the key infrastructure and I am pleased to see the high quality of the resource and the rail and port.”

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Canyon Resources Limited

Minister of Mines of Cameroon visits the Minim Martap Project

About Canyon Resources

Summary

Canyon Resources is focussed on the development of the 100% owned Minim-Martap Bauxite Project, a direct shipping ore (DSO) project development opportunity in central Cameroon. The Project is situated adjacent to the main rail line linking the region to the Atlantic port of Douala. The rail line is currently underutilised and coupled with the existing port of Douala, supports a low capex, low opex solution to deliver high grade, low contaminant, seaborne bauxite to market to fuel the large and growing aluminium industry as described in the 2020 Pre-Feasibility Study[1] . The country is planning a rail extension and is undergoing rail line debottlenecking upgrades, giving longer term potential for export through the newly built, deep-water port of Kribi.

Canyon is planning the development of the bauxite Project in a 2 Stage, 2 Port execution programme with initial production exported though the port of Douala utilising the existing rail and port infrastructure and Stage 2 unlocking tonnes and reducing costs by utilising the planned rail extension to access the deep-water port of Kribi.

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1 ASX announcement 1 July 2020

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Canyon Resources Limited

Minister of Mines of Cameroon visits the Minim Martap Project

Pre-Feasibility Study

The Company’s Stage 1 Pre-Feasibility Study[2] demonstrated the Minim Martap Bauxite Project’s potential as a long-term producer of very high quality, low contaminant bauxite via a multi-stage development program utilising existing infrastructure in Cameroon. Canyon is advancing strategic partnership and off-take agreement discussions with interested parties to accelerate the Project development timeline. The headline economic outcomes of the Pre-Feasibility Study are as follows:

Minim Martap Project1	Units	Stage 1
Annual Production Rate	Mtpa	5.0
Project Development Capital	US$M	120
Average OperatingCost C1	US$/t	35.1
Project NPV10	US$M	291
Project IRR	%	37
Capital Intensity	US$/t	24

Resources and Reserves

The Project is validated by the Ore Reserve estimate[3] prepared by a Competent Person, in accordance with the JORC Code (2012) and is presented as:

Reserve
Classification	Tonnes (Mt)	Al2O3	SiO2
Proven	-	-	-
Probable	97.3	51.1%	2.3%
Total Ore Reserves	97.3	51.1%	2.3%

The underlying Mineral Resource estimate[4] prepared by a Competent Person, in accordance with the JORC Code (2012) is stated as :

Resource(35% Al2O3cut-off)
	Tonnes (Mt) ore	Alumina	Silica
Total	1,002.0	45.2% Al2O3	2.8% SiO2
Indicated	942.5	45.2% Al2O3	2.8% SiO2
Inferred	59.5	43.8% Al2O3	3.1% SiO2
Contained High Grade Resource(45% Al2O3cut-off)
	Tonnes (Mt) ore	Alumina	Silica
Total	484	48.8% Al2O3	2.6% SiO2
Indicated	460	48.9% Al2O3	2.6% SiO2
Inferred	24	47.4% Al2O3	2.0% SiO2

2 ASX announcement 1 July 2020

3 ASX announcement 10 August 2020

4 ASX announcement 16 October 2020

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Canyon Resources Limited

Minister of Mines of Cameroon visits the Minim Martap Project

Competent Person’s Statement – Ore Reserves

The information in this report that relates to Ore Reserves is based on information compiled or reviewed by Mr John Battista, a Competent Person who is a Member and Chartered Professional (Mining) of the Australasian Institute of Mining and Metallurgy and is currently employed by Mining Plus (UK) Ltd. Mr Battista has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code).

Mr Battista consents to the disclosure of information in this report in the form and context in which it appears.

Competent Person’s Statement – Mineral Resources

The information in this announcement that relates to mineral resources is based on information compiled or reviewed by Mr Mark Gifford, an independent Geological expert consulting to Canyon Resources Limited. Mr Mark Gifford is a Fellow of the Australian Institute of Mining and Metallurgy and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code).

Mr Gifford consents to the inclusion in the announcement of the matters based on his information in the form and context in which it appears.

Mineral Resource estimate

The data in this announcement that relates to the Mineral Resource estimates for the Minim Martap Bauxite Project is based on information in the Resources announcement of 16 October 2020 and available to view on the Company’s website and ASX.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed. The Company confirms that the form and the context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement

Pre-Feasibility Study

The data in this announcement that relates to the Pre-Feasibility Study for the Minim Martap Bauxite Project and associated production targets and forecast financial information, is based on information in the PFS announcement of 1 July 2020. and available to view on the Company’s website and ASX.

The Company confirms that all the material assumptions underpinning the production target and forecast financial information derived from the production target continue to apply and have not materially changed.

Ore Reserve estimate

The data in this announcement that relates to the Ore Reserve estimate estimates for the Minim Martap Bauxite Project is based on information in the maiden Ore Reserve announcement of 10 August 2020 and available to view on the Company’s website and ASX.

The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement and, in the case of estimates of Ore Reserves, that all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed. The Company confirms that the form and the context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement.

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Canyon Resources Limited

Minister of Mines of Cameroon visits the Minim Martap Project

About Cameroon

Canyon Resources Ltd is exploring and developing high grade bauxite reserves in Cameroon, a central-west African country between Nigeria and Equatorial Guinea with Yaounde as the capital. The country has enjoyed the development of industry and infrastructure, particularly agriculture, roads, railways and ports and including a hydro-electric powered aluminium smelter at Edea, currently utilising imported alumina. Cameroon is a producer, consumer and exporter of gas, having exported 6,262,113 million BTU by the end of May 2020, and crude oil and has rich deposits of cobalt, iron ore, gold, diamonds and vast high grade bauxite ore reserves. Revenues from the extractive industries accounted for 5.43% of GDP and 33.23% of total exports in 2015. Cameroon has the fundamental infrastructure and mineral deposits to support a significant mining industry and the population is generally highly skilled in the technical vocations commensurate to exploration, construction and mining.

Forward looking statements

All statements other than statements of historical fact included in this announcement including, without limitation, statements regarding future plans and objectives of Canyon, are forward-looking statements. When used in this announcement, forward-looking statements can be identified by words such as ‘anticipate”, “believe”, “could”, “estimate”, “expect”, “future”, “intend”, “may”, “opportunity”, “plan”, “potential”, “project”, “seek”, “will” and other similar words that involve risks and uncertainties.

These statements are based on an assessment of present economic and operating conditions, and on a number of assumptions regarding future events and actions that are expected to take place. Such forwardlooking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other important factors, many of which are beyond the control of the Company, its directors and management of Canyon that could cause Canyon’s actual results to differ materially from the results expressed or anticipated in these statements.

Canyon cannot and does not give any assurance that the results, performance or achievements expressed or implied by the forward-looking statements contained in this announcement will actually occur and investors are cautioned not to place undue reliance on these forward-looking statements. Canyon does not undertake to update or revise forward-looking statements, or to publish prospective financial information in the future, regardless of whether new information, future events or any other factors affect the information contained in this announcement, except where required by applicable law and stock exchange listing requirements.

This announcement has been approved for release by the Board Enquiries:

PHILLIP GALLAGHER | Managing Director | Canyon Resources Limited T: +61 8 6382 3342 E: info@canyonresources.com.au

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Canyon Resources Limited