Cygnus Metals (ASX:CY5) is “on track to become a significant Canadian copper exploration and development company” after receiving court approval for its merger with Doré Copper Mining (TSX-V:DCMC).
The arrangement will see Cygnus take control of Doré’s Chibougamau Copper-Gold Project in Québec, which hosts a resource measuring 10.8 million tonnes @ 3.5% copper-equivalent — or 306,000 tonnes of contained copper and 314,000 ounces of gold — as well as a 900,000-tonnes-per-year processing facility.
According to the deal originally announced in mid-October, Doré shareholders will receive 1.8297 Cygnus shares for every Doré share held, after which Cygnus and Doré shareholders will own 55% and 45%, respectively, of the merged company.
With approval from Ontario’s Supreme Court of Justice now in hand, the transaction is expected to close by the end of December. Shares in Doré will then be removed from the TSX Venture Exchange, and Cygnus’ now-approved TSX-V listing will take effect from 3 January 2025 under the ticker ‘CYG’.
Cygnus’ TSX-V listing will be in addition to the company’s ASX listing.
Located roughly 480km north of Montreal, the Chibougamau Project comprises four properties within 50km of the processing facility — Corner Bay, Cedar Bay, Devlin, and Joe Mann — which collectively span 187km2.
Corner Bay is the project’s key deposit, and accounts for roughly 79% of Chibougamau’s overall resource. A “classic intrusive-related ‘Chibougamau-style’ vein-hosted copper-gold system”, it has never been mined, but has been mapped to a depth of 1,350m and presents “immediate scope” for resource growth.
Cedar Bay is a similar style of deposit, located just 5km from the processing facility. It hosts a historical mine that produced 61,000 tonnes of copper and 402,000 ounces of gold, and is a priority target for follow-up exploration.
Devlin also hosts mineralisation of comparable characteristics, as well as a ramp that allows access to the deposit at a depth of 80m, while Joe Mann is an orogenic gold system that previously produced 1.3 million tonnes @ 8.3 grams per tonne (g/t) gold.
“The merged group envisages a hub-and-spoke model operation starting first with the underground development of the Devlin deposit via the existing ramp, and secondly with the underground development of the Corner Bay deposit (main asset) via the existing ramp,” Cygnus said in its October announcement.
“Once the Devlin deposit is mined out, production at the Joe Mann mine would start and be funded out of cash flow from operations. The Joe Mann deposit benefits from an existing headframe and shaft, including all surface infrastructure.”
Cygnus says the hub-and-spoke model provides the opportunity for regional consolidation, which will become a focus for the merged entity.
Upon completion of the merger, the resulting entity’s board will consist of three directors from each of Cygnus and Doré. Cygnus’ current Chair David Southam will retain his position, while Doré’s President and CEO Ernst Mast will become the merged company’s President and Managing Director.
Cygnus currently holds a portfolio of three projects in Québec’s James Bay lithium district, including Auclair, Sakami, and Pontax — the latter of which hosts an inferred resource measuring 10.1 million tonnes @ 1.04% lithium oxide.
The company also holds some 1,750km2 of tenements in Western Australia, prospective for lithium, rare earths, nickel, copper, gold, and platinum group elements.
Once the merger with Doré has been finalised, Cygnus says it will be positioned as a “leading ASX- and TSX-V-listed, Québec-focused critical minerals explorer and developer with high-grade copper and lithium resources”.
Write to Oliver Gray at Mining.com.au
Images: Doré Copper Mining, Cygnus Metals
