Central Asia Metals agrees to acquire Cygnus in all-share deal

(Sharecast News) - Central Asia Metals announced on Tuesday that it has agreed to acquire Cygnus Metals in an all-share deal valuing the Australian-listed company at about AUD 232m, adding the Chibougamau copper-gold project in Québec to its portfolio.

The AIM-traded base metals producer said the deal would be implemented through an Australian scheme of arrangement, with Cygnus shareholders receiving 0.06 new CAML shares for each Cygnus share held.

The terms value each Cygnus share at AUD 0.176, based on CAML's closing share price of 156p and an exchange rate of AUD 1 to 53p on 1 June.

The offer represents a 60% premium to Cygnus' last closing price of AUD 0.11 and a 49% premium to its 20-day volume-weighted average price.

Existing CAML shareholders are expected to own about 70% of the enlarged company, with Cygnus shareholders owning the remaining 30%.

Central Asia Metals said the acquisition would add a flagship development-stage copper-gold asset in a tier-one jurisdiction, while diversifying its portfolio beyond its producing operations in Kazakhstan and North Macedonia.

Cygnus' Chibougamau project has a latest mineral resource estimate of 6.4m tonnes at 2.3% copper, 0.8 grams per tonne gold and 7.6 grams per tonne silver in the measured and indicated categories, plus 8.5m tonnes at 2.1% copper, 1.7 grams per tonne gold and 7.9 grams per tonne silver in the inferred category.

That equates to 149,000 tonnes of contained copper and 167,000 ounces of gold in measured and indicated resources, with a further 182,000 tonnes of copper and 454,000 ounces of gold in inferred resources.

The project includes a historical 900,000-tonne-per-year processing plant, which CAML said could provide a head start and reduce capital requirements once refurbished.

An updated preliminary economic assessment is already underway and would be completed by CAML.

CAML said its balance sheet and free cash generation would provide a clear funding pathway to advance and de-risk Chibougamau.

The company reported free cash flow of $56m in 2025 and declared full-year dividends of 12p per share, equivalent to $28m in total.

Its 2026 production guidance is 12,000 to 13,000 tonnes of copper cathode, 18,000 to 20,000 tonnes of zinc-in-concentrate and 26,000 to 28,000 tonnes of lead-in-concentrate.

Cygnus shareholders are expected to vote on the scheme in September, with completion shortly afterwards if approved.

The deal requires approval by at least 75% of votes cast by Cygnus shareholders and a majority of Cygnus shareholders present and voting, as well as Australian court approval, relevant regulatory approvals and CAML shareholder approval for the issue of new shares.

Major Cygnus shareholders representing about 29% of shares have indicated they intend to vote in favour of the transaction, subject to no superior proposal and the independent expert concluding the scheme is in shareholders' best interests.

CAML said it has also entered into a call option deed with Ocean Partners over 9.9% of Cygnus shares, exercisable if a competing proposal is deemed superior by the Cygnus board.

CAML said it would use reasonable endeavours to seek a listing of its shares on the Toronto Stock Exchange or TSX Venture Exchange before implementation, while retaining its AIM quotation.

Nick Clarke, CAML's non-executive chairman, said the transaction was "a compelling opportunity" to add a high-grade copper-gold asset alongside the group's existing operations.

"Bringing the Chibougamau Project into the portfolio provides a clear pathway to near-term growth, with the potential to make a meaningful contribution to production and cash flow," he said.

Chief executive Gavin Ferrar said the project represented "a material step" in strengthening CAML's portfolio.

"We have been impressed by the quality and experience of the Cygnus team and look forward to working closely with them to integrate the Chibougamau Project, complete an updated PEA and advance the asset towards a feasibility study," he said.

Cygnus executive chairman David Southam said the transaction was "a true win-win outcome" for both sets of shareholders, allowing Cygnus investors to retain exposure to Chibougamau while gaining exposure to a cash-generative base metals producer that pays dividends.

At 1528 BST, shares in Central Asia Metals were down 1.22% at 154.1p.

Reporting by Josh White for Sharecast.com.

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