Cygnus Gold launches $6m IPO to explore WA’s wheatbelt
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Another gold player is looking to list on the ASX – a move that would earn the company’s boss a $20,000 bonus.
Cygnus Gold has released a prospectus to raise up to $6 million and list on the Australian bourse by January 15.
The company has a 5392 sq km land package, comprising exploration licences and applications, in the Wheatbelt district of Western Australia, where it is looking for gold and other minerals.
Cygnus has two earn-in agreements with larger rival and successful gold player Gold Road Resources.
Gold Road, which is well known for its success on the Gruyere gold project that it is now in construction, has agreed to inject $750,000 into Cygnus as part of the initial public offer.
Also planning to participate in the IPO is Resource Capital Fund VI and Southern Cross Capital, which are cornerstone investors in the company and will each contribute $500,000.
At June 30, Cygnus had $787,308 worth of cash in the kitty and post-IPO expects to have between $5.4 million and $6.3 million depending on how much it raises.
Four of the five directors plan to subscribe for shares to the tune of $120,000.
Cygnus highlighted in its prospectus that managing director James Merrillees will received a $20,000 bonus if the company lists on the ASX, which Stockhead understands is not that common a practice for bigger listings.
However, smaller companies may offer a bonus as an incentive to work harder to achieve a successful listing.
Most of the cash raised will be used for drilling and exploration programs across Cygnus’ projects, but the initial focus will be on the high-grade Bottleneck prospect and other similar targets at the Stanley project.
Past drilling on the project has intersected near-surface, high-grade gold including 21m at 3.3 grams, Cygnus noted in its prospectus.
The company plans to begin a diamond drilling program shortly after it debuts on the ASX.
Stockhead was unable to reach Cygnus for comment.