Australian Securities Exchange (ASX)-listed Cygnus Metals and Doré Copper Mining have announced an agreement to merge to create a Canada-focused copper and lithium mining company, with two core projects.
The firms will combine Cygnus Metals’ lithium assets with Doré Copper Mining’s copper-gold operations in Quebec, Canada.
Cygnus Metals will acquire all issued and outstanding common shares of the Toronto Stock Exchange Venture Exchange (TSXV)-listed Doré Copper Mining in a transaction structured as a Canadian statutory plan of arrangement.
As part of the deal, Doré Copper Mining’s shareholders will receive 1.8297 Cygnus Metals shares for each Doré Copper Mining share they hold.
Upon completion, Cygnus Metals’ shareholders will own 55% of the merged entity, while Doré Copper Mining’s shareholders will own 45%.
The boards of both companies have unanimously approved the merger, and major shareholders from Doré Copper Mining, including Equinox Partners and Ocean Partners, have entered voting agreements to support the transaction.
The key asset from Doré Copper Mining is the Chibougamau Copper and Gold Project, which includes a high-grade copper and gold resource and the only processing facility within a 250km radius. The merged group plans to implement a “hub-and-spoke” strategy, using this facility to process materials from various nearby deposits.
Cygnus Metals also holds lithium projects in the James Bay region, with the Pontax Lithium Project standing out with a 10.1Mt @ 1.04% Li2O resource. The merged group will focus on advancing both copper and lithium resources.
Cygnus Metals executive chair David Southam said: “This merger is an exceptional opportunity to create value for both groups of shareholders. 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 programme, 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.”
The transaction is expected to close by late December 2024, contingent on various conditions, including the receipt of conditional approval of the TSX-V for the listing of Cygnus Metals shares.
Additionally, Cygnus Metals plans to raise A$11m ($7.4m) via a placement to fund the development of Chibougamau and advance its lithium exploration efforts.
Doré Copper Mining president and CEO Ernest Mast said: “The Doré team is delighted at the thought of working with the Cygnus team to create a critical metals company and to maximise the value of what we know is an outstanding asset at Chibougamau. This merger will provide the funding, additional expertise and the strategy to hopefully generate superior shareholder returns through brownfields exploration at Chibougamau.”
