ASX Cygnus tiddler lands exceptional lithium project next to world-class deposits

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Cygnus (ASX:CY5), the ASX-listed shell with a market capitalization of just $19 million, just sold one of the hottest products in one of the hottest regions of the world.

Perth-based Cygnus (ASX:CY5), which sports Bellevue Gold MD Steve Parsons as its largest shareholder with a 6.9% stake, has reached a corporate deal to carve out up to 70% of the Pontax Lithium project in Quebec, Canada.

Cygnus claims Bellevue non-executive director Mike Naylor as executive director with a 5.2% stake, while Mincor Resources non-executive director Michael Bohm holds 5.1%.

Cygnus has a walk-in start at Pontax, with spodumene already described over a strike length of 620m with hits such as 2.6% Li2O.

All holes drilled at Pontax hit lithium-cesium-tantalum (LCT) spodumene-bearing pegmatites with shallow high-grade intersections.

But there was no drilling outside of the 620m long outcrop central zone, which remains open along strike and at depth.

And initial metallurgical testing generated a 6% spodumene concentrate using conventional processing techniques.

The huge opportunity for Cygnus is also highlighted by the multiple priority foot drill targets waiting to be tested.

The extent and grade of known mineralization, not to mention the benefits, is hardly surprising given that Pontax sits at the heart of one of the world’s lithium hotspots.

James Bay is a world-class lithium region in the Superior Province of Quebec and hosts major lithium projects, including James Bay (40 Mt @ 1.4% Li2O), Whabouchi (56 Mt @ 1.4 % Li2O) and Rose (34 Mt @ 0.85% Li2O). It is considered one of the most endowed lithium terranes in the world.

Given the wide open nature of the known mineralization and the number of drill targets, Cygnus will undertake a drill program of up to 10,000m over the next six months.

Cygnus expects to complete resource definition and halt drilling within 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 delineated mineralization over a strike length of 620m.

“The upside potential is also immense, with mineralization open laterally in both directions and numerous walking drill targets. And metallurgical testing generated 6% spodumene concentrate, meaning it meets key criteria set by global customers.

Pontax’s potential is also reflected in Cygnus’ success in raising $4 million in a CA12.5 equity placement despite the challenging equity market environment.

Proceeds from the placement will secure Cygnus the necessary funds to support an extensive drilling program to begin unlocking the full value of Pontax.

Under the affermage agreement, Cygnus can earn up to 70% of Pontax by spending money on exploration and making installment payments to current owner Stria Lithium.

This article was developed in conjunction with Cygnus Gold, a Stockhead advertiser at the time of publication.

This article does not constitute advice on financial products. You should consider obtaining independent advice before making any financial decisions.

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