Cygnus Gold (ASX:CY5) has eyes set on Pontax

• Cygnus Gold (CY5) enters an exclusive option to buy up to 70 per cent of the Pontax lithium project in Quebec, Canada, from Stria Lithium
• The interest will be earned in stages for a total of C$16 million (A$17.8 million)
• Pontax is a high-grade lithium spodumene project with mineralisation outlined over a 620-metre strike length
• To pay for the earn-in, Cygnus announced a $3.65 million placement, which will see 29.2 million shares issued at 12.5 cents each
• CY5 jumps 25 per cent on the market this afternoon to trade at 20 cents each at 2:04 pm AEST.

Cygnus Gold (CY5) has entered into an exclusive option to buy up to 70 per cent of the Pontax lithium project in Quebec, Canada, from Stria Lithium.

The interest will be earned in stages and totals C$16 million (A$17.8 million).

This includes an initial C$1 million for the exclusive option and to earn a 51 per cent interest Cygnus will need to spend C$4 million on exploration over the next 18 months and make a cash payment of C$2 million to Stria at the end of stage one.

For a further 19 per cent interest in Pontax, Cygnus will need to spend C$6 million over a 30 month period and make a cash payment to Stria of C$3 million.

Cygnus will form a joint venture with Stria at the end of the stage two earn-in period or the date that Cygnus withdraws from the stage two earn-in, if it elects to do so.

Pontax is a high-grade lithium spodumene project with mineralisation outlined over a 620-metre strike length.

Money from the earn-in agreement will fund an upcoming 10,000-metre drilling program over the next six months.

To pay for the earn-in, Cygnus announced a $3.65 million placement, which will see 29.2 million shares issued at 12.5 cents each.

The placement does not include participation by directors and management, who intend to subscribe for a total of 4.2 million shares, which is subject to shareholder approval.

Cygnus Executive Director Michael Naylor said this is an “exceptional opportunity” for the company.

“The growth potential is also immense, with the mineralisation open along strike in both directions and numerous walk-up drilling targets. And the metallurgical testwork has generated six per cent spodumene concentrate, meaning it meets the key criteria set by global customers,” he said.

“The successful share placement ensures we have the funds to underpin an extensive drilling program to begin unlocking the full value of Pontax. The Cygnus team looks forward to working closely with our Canadian partners at Stria Lithium Corp to create
value for all the Pontax stakeholders.”

On the market, CY5 shares jumped 25 per cent to trade at 20 cents each at 2:04 pm AEST.