Thanks, Darcy. Good morning, everyone. Thank you for joining us today. My name is Peter Secker, CEO of Canyon Resources Limited, and I'm very pleased to provide an update about our recent $215 million strategic funding package, which has just been completed by Canyon Resources Limited, and very much supporting us as we progress the development of the world-class Minim Martap Bauxite Project. As we previously said, moving forward very quickly and looking forward to getting into production early in 2026 and then making that first version of bauxite towards the end of the first half of next year. I'm going to speak for about 10 minutes. We'll have a short Q&A session if you've got some questions. As I go through the discussion, I'll talk about dollars, and all these dollar numbers are Aussie dollars, Australian dollars, unless I specifically say U.S. dollars.
I am very pleased to confirm successful raising of approximately $215 million. This is by way of a two-tranche placement, comprising $205 million in new equity, plus an option exercise from our major shareholder, Eagle Eye Asset Holdings Pte Ltd, to raise another $10 million, for a total of that $215 million. If we look at the placement, first of all, as I said, this is being undertaken in two tranches. The first is an unconditional placement, raising about $30 million. This uses the company's available placement capacity. There is a second conditional tranche, which goes to Eagle Eye Asset Holdings Pte Ltd and also to Afriland Bauxite Investment, who we're introducing as a new strategic shareholder in Canyon Resources Limited. Afriland Bauxite Investment is a subsidiary of Afriland First Bank, and this is one of the largest financial institutions and services groups in Cameroon.
This is our first major strategic investment by a local Cameroonian company. The offer price was $0.26, and this was a 5.5% discount to the most recent trading price just before the placement. In total, Eagle Eye Asset Holdings Pte Ltd will invest about $110 million, exercising the outstanding 137 million options. These are 7% options, and that's for that initial $10 million. They've also made a commitment to subscribe for another $100 million under this second tranche, which is subject, obviously, to a shareholder approval at a shareholder meeting. Afriland Bauxite Investment has committed to subscribe approximately $70 million, again under the tranche two structure, and again, that's subject to shareholder approval in Australia and also various in-country approvals for them in Cameroon.
Following tranche two and the completion, Eagle Eye Asset Holdings Pte Ltd will maintain its 56.5% interest in Canyon Resources Limited as our latest shareholder, and Afriland Bauxite Investment will become a large shareholder registered with 10% in Canyon. I'd like to thank Canaccord and Sternship, who were the joint lead managers for the placement, and also I'd like to welcome all the new shareholders. I'd like to welcome also existing shareholders, some of whom participated in the raise. Post-raising, based on an issue price of $0.26 per share, Canyon's market capitalization will increase from around $460 million to just over $700 million. In addition, cash and equivalents on the balance sheet will increase from a current $51 million to approximately $266 million on a pro forma basis.
In terms of where we're allocating funds from the proceeds of the raise, we've already spoken about the cost to get to that first production in mid-2026, that $100 million U.S. dollars, so $150 million Australian dollars. A significant amount of these funds will go towards that. In addition, we've also spoken about the fact that we want to increase our investment in CAMRAIL, which is the Cameroon rail operator. We've allocated around $46 million to increase our shareholding in CAMRAIL. That's really because we want more of an involvement in the CAMRAIL operation, as it is so critical to moving from initial production of a million tons a year to that final capacity of 10 million tons a year. Part of these funds go towards increasing our equity in CAMRAIL, and obviously, with significantly more involvement in that whole transport and logistics network.
Finally, we've allocated about $14 million to general admin and corporate costs over the next couple of years. When we started this development schedule, we took a $140 million U.S. dollar debt facility from African Finance Group. We've already drawn down $25 million of that, but this new equity means that we'll have to, or we can decrease the reliance on this debt. A significant amount will remain undrawn as we use the equity for the project rather than the more expensive debt. The development of Minim Martap has been structured to try and minimize that upfront capital of that $100 million U.S., $150 million Australian dollar capital spend. Obviously, there's an associated ramp-up of an initial just over 1 million tons a year, growing to 10 million tons a year.
The future capital, or the majority of the future capital spend, is based on increasing the number of locomotives that will be required. The initial order for the first seven locos has been placed, and they will arrive early in 2026. Obviously, we're looking now to try and maximize production for Minim Martap and increase production as soon as possible, as soon as rail capacity is available. In addition, some of this money will be used to order additional locomotives in 2026 as we try and accelerate production towards that 10 million target. That was just a quick update of where we're at and where we're going. In summary, I'll just run through what we've sort of achieved and where we want to go in the next six to nine months.
From the DFS, there's a 20-year mine plan, obviously getting up to that 10 million tons a year of production. Within that 20-year mine plan, we're going to use around 13-14% of the total resources. There is a significant upside for additional production within that resource number. Obviously, we're looking at beyond getting to 10 million and moving upwards to maybe 14-15 million tons a year. A significant amount of resources still available. Producing NPV, currently around $830 million US dollars. IRR of the project, 29%. As we keep on talking about that stage development, initial CapEx of $100 million US to get to first production towards the middle of next year. That is still our intention. We want to be mining on site early in the new year, early in 2026, and heading towards that first shipment towards the end of the second half of 2026.
At the production rate of 10 million tons a year, this would generate over $170 million US dollars per annum of free cash flow. That cash flow is based on our long-term pricing and the feasibility of $78 a ton. If we were currently selling into the market, because of our high-grade Minim Martap, 51% aluminum and 2% silica, we would get a premium to that $78. In fact, we'd probably be selling at the moment for around $85 a ton. Potential for additional cash flow moving forwards. Finally, we are undertaking a feasibility study for an in-country alumina refinery that will be completed in mid-2026. Obviously, that's the first step in moving downstream with a value-add strategy in Cameroon for Canyon. That was a quick summary. Thank you for listening, and thanks for your time today. I'm happy to take some questions if you have any.
Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speaker phone, please pick up the handset to ask your question. Your first question today comes from Tim Hoff from Canaccord. Please go ahead.
Hi Peter, thanks for the update. Could you just remind us what the royalty regime is in Cameroon, and I guess how the government support's been shaping up so far?
In terms of government support, we were actually on site at the end of last week. The Prime Minister took two days out of his schedule to come to site and to do an official opening. We had the road opening in mid-July, but the President was not available for that. The Prime Minister came to site at the end of last week and significant support. Obviously, this is a key project in Cameroon. It is the first large-scale mining project in Cameroon, and the government has been extremely supportive in helping us develop this and fast-tracking it from what was a resource towards the end of last year into now something that's a development project looking for first production in mid-2026. The royalty regime that was in the feasibility study, I'd have to go back and look at that for you. I can send you some numbers later.
Excellent, thanks. Perhaps around the capital deployment with the raising, I guess, in the bank now, when would you expect first debt draw, and what would be the conditions around that first draw?
We've already made the first draw. We made it a couple of months ago. We added the $140 million from African Finance Group. We took $25 million, so that's already drawn down and we started to spend that. What we're saying now is with this new equity, we don't see any more significant draws on that debt. We now have enough equity in the bank to finish that first stage, that first development stage, to get it into production and then to make the first ship. Yes, there will be no more short-term drawdowns on that debt.
Fantastic, thanks. I might pass it over.
Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. There are no further questions at this time. However, if you do have any further questions, please feel free to contact Cameron from Sodali. With that, that does conclude our conference for today. Thank you.