This ASX gold miner is acquiring a high-grade lithium project, and its share price is rocketing 25%

Here's what's driving the ASX gold miner-turned-lithium hopeful's stock higher today.

| More on:
A group of people in suits and hard hats celebrate the rising share price with champagne.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Stock in ASX gold player Cygnus Gold is launching 25% today to trade at 20 cents
  • Its gains come on news it's entered an agreement that could see it acquiring a 70% hold in Canada's Pontax Lithium Project 
  • Drilling at the project has already found high-grade lithium deposits 

The Cygnus Gold Ltd (ASX: CY5) share price is launching higher after the micro-cap gold miner announced a deal that could see it taking a majority hold of a lithium project.

And not just any lithium project. Drilling at the Pontax Lithium Project – located in a world-class Canadian lithium province – has found it's a high-grade prospect.

At the time of writing, the Cygnus Gold share price is 20 cents, 25% higher than its previous close. However, that's down from its intraday high of 23.5 cents – representing a 47% gain.

Let's take a closer look at the news driving the ASX gold miner-turned-lithium hopeful's stock higher today.

ASX gold share launches 25% on 'game-changing' lithium deal

The Cygnus Gold share price is taking off on Friday on news of a deal the company has dubbed "game-changing".

It has entered an earn-in agreement that will see it able to acquire up to 70% of the Pontax project from Stria Lithium.

The project covers 36 square kilometres and hosts numerous pegmatite swarms. The only explored swarm found mineralisation extending over 620 metres that remains open along strike and at depth.

So far, 25 diamond drill holes have been completed at the project. All found spodumene-bearing lithium-cesium-tantalum pegmatites with significant intersections.

Under the terms of the acquisition, Cygnus Gold will initially pay around $1.1 million.

It can earn a 51% interest in the project by spending around $4.5 million on exploration, as well as paying approximately $2.2 million to Stria at the end of the earn-in period's first stage.

Another approximately $6.7 million on exploration and a payment of around $3.4 million will get Cygnus Gold an extra 19%.

The ASX gold-turned-lithium explorer's stock might also be being moved by news the company is undergoing a $3.65 million placement.

It's offering new shares in the company for 12.5 cents apiece. The proceeds are earmarked to fund exploration activities, a 7% stake in Stria, and the initial payment.

The Gygnus share price is now up 33% over the past week, 14% this year to date, and 18% in the past 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

a man holds his arms out and shrugs his shoulders as if indicating he doesn't know the answer to a question he's been asked.
Materials Shares

Why is this ASX 200 mining stock crashing 28% today?

Investors are rushing to the exits in large number. But why?

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Here's the lithium price forecast through to 2028

Will lithium prices be recovering any time soon? Let's find out.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Materials Shares

Why is the BHP share price falling today?

Today's decline could actually be good news for the miner's shareholders.

Read more »

Businessman working and using Digital Tablet new business project finance investment at coffee cafe.
Materials Shares

Pilbara Minerals shares crashed 17% in February: Is this a buying opportunity?

Do analysts think that now is a good time to buy this lithium giant's shares? Let's find out.

Read more »

Business people discussing project on digital tablet.
Materials Shares

After a 5% price drop on its 2024 results, should I buy shares in this ASX 200 heavyweight?

Is now a good time to put money into this giant's shares? Let's find out.

Read more »

Three miners looking at a tablet.
Materials Shares

2 of the very best ASX 200 mining stocks to buy in March

Goldman Sachs thinks these mining giant's could generate big returns over the next 12 months.

Read more »

Two men in hard hats and high visibility jackets look together at a laptop screen at a mine site.
Earnings Results

Sayona Mining share price wobbles amid growing half-year losses

Sayona Mining shares are in the spotlight following the lithium miner’s half-year results.

Read more »

Miner holding cash which represents dividends.
Dividend Investing

Here's the BHP dividend forecast through to 2029

Is the Big Australian's dividend heading higher or lower from here? Let's find out.

Read more »