ASX tiddler Cygnus lands exceptional lithium project next to world-class deposits
Cygnus (ASX:CY5), the ASX-listed shell with a market cap of just $19 million, has just dealt itself into one of the hottest commodities in one of the world’s hottest regions.
Perth-based Cygnus (ASX:CY5), which sports Bellevue Gold MD Steve Parsons as its biggest shareholder with a 6.9 per cent stake, has struck a company-making deal to carve itself up to 70 per cent of the Pontax Lithium Project in Quebec, Canada.
Cygnus boasts Bellevue Non-executive Director Mike Naylor as Executive Director with a 5.2 per cent stake while Mincor Resources Non-executive Director Michael Bohm has 5.1 per cent.
Cygnus has a walk-up start at Pontax, with spodumene already outlined over a 620m strike length with hits such as 2.6% Li2O.
All holes drilled at Pontax have hit spodumene bearing lithium-caesium-tantalum (LCT) pegmatites with high-grade, shallow intersections.
But there has been no drilling outside the outcropping 620m-long central zone, which remains open along trend and at depth.
And initial metallurgical test work generated 6% spodumene concentrate using conventional processing techniques.
The huge opportunity for Cygnus is also highlighted by the multiple priority walk-up drill targets waiting to be tested.
The extent and grade of the known mineralisation, not to mention the upside, is hardly surprising given that Pontax sits in the heart of one of the world’s lithium hot spots.
James Bay is a world-class lithium region within the Superior Province of Quebec and hosts major lithium projects including James Bay (40Mt @ 1.4% Li2O), Whabouchi (56Mt @ 1.4% Li2O) and Rose (34Mt @ 0.85% Li2O). It is considered to be one of the most endowed lithium terranes in the world.
Given the wide-open nature of the known mineralisation and the number of drilling targets, Cygnus will undertake a drilling program of up to 10,000m over the next six months.
Cygnus plans to completing resource definition and step out drilling over the next six months.
“This is an exceptional opportunity for Cygnus,” Naylor said. “Drilling has already established that Pontax is a high-grade lithium spodumene prospect with mineralisation outlined over a 620m strike length.
“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 6% spodumene concentrate, meaning it meets the key criteria set by global customers.”
The potential at Pontax is also reflected in Cygnus’ success in raising $4m in a share placement at 12.5c a share despite the challenging share market environment.
The proceeds of the placement will ensure Cygnus has the funds to underpin an extensive drilling program to begin unlocking the full value of Pontax.
Under the farm-in agreement, Cygnus can earn up to 70 per cent of Pontax by spending money on exploration and making staged payments to current owner Stria Lithium.
This article was developed in collaboration with Cygnus Gold, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.