Australia’s Cygnus Metals has revealed plans to merge with Doré Copper Mining to develop the two companies’ significant Canadian copper, lithium and gold portfolio.
The companies have agreed to merge by way of a Canadian statutory plan of arrangement, pursuant to which Cygnus will acquire 100% of the issued and outstanding common shares of Doré.
Once the transaction is completed, Cygnus shareholders will own 55% of the merged group and Doré shareholders 45%.
Capital raising
Cygnus has also announced that it intends to raise up to $11 million via a two-tranche placement to fund resource growth and advance the pathway to production at Doré’s Chibougamau copper-gold project.
The company also intends to progress its lithium exploration pipeline in the prolific James Bay region of Canada.
Cygnus executive chair David Southam said Chibougamau is a very attractive target featuring a high-grade copper and gold resource of 10.8 million tonnes at 3.5% copper equivalent.
“This merger is an exceptional opportunity to create value for both groups of shareholders,” he said.
“By combining the proven exploration and management skills of the Cygnus team with the high-grade resource and immense upside at the Chibougamau copper-gold project, we have the potential to unlock substantial value.”
“We intend to devise and implement an aggressive exploration program, utilising highly experienced geologists and the latest technology, with the aim of driving strong resource growth at a time when the world desperately wants more copper from tier-one locations.”
Critical infrastructure
The Chibougamau project also includes a 900,000tpa processing facility—the only milling infrastructure within a 250-kilometre radius.
Cygnus is currently advancing the Pontax lithium project, where it is earning up to 70%, as well as the Auclair and Sakami lithium projects in the James Bay lithium district in Canada.
The company also has rare earth element and base metal projects at Bencubbin and Snake Rock in Western Australia.
Maximise value
Doré president Ernest Mast said the merged entity will aim to maximise the value of the outstanding asset at Chibougamau.
“This merger will provide the funding, additional expertise and the strategy to hopefully generate superior shareholder returns,” he said
The merged group is planning to utilise a “hub-and-spoke” model operation, starting first with the underground development of the Devlin and Corner Bay deposits at Chibougamau.
Once the Devlin deposit is mined out, production at the Joe Mann mine would start and be funded out of operational cash flow.
