Central Asia proposes ‘win-win’ takeover of Cygnus and its Québec flagship

The companies have entered into a definitive scheme implementation deed which outlines an arrangement whereby each Cygnus shareholder will receive 0.06 new Central Asia shares for each Cygnus share held.

The terms of the scheme value each Cygnus share at A$0.176 apiece, which is a 60% premium to Cygnus’ last closing price on June 1 of A$0.11 apiece.

The deal is expected to result in existing Central Asia shareholders owning about 70% of Cygnus’ enlarged fully diluted issued share capital and Cygnus shareholders the balance.

The acquisition of Cygnus will add a flagship development-stage project to Central Asia’s portfolio – the Chibougamau high-grade copper/gold deposit located in Québec, Canada.

Central Asia currently has production assets in North Macedonia and Kazakhstan.

The latest mineral resource estimate on Chibougamau states a 6.4-million-tonne resource grading 2.3% copper, 0.8 g/t gold and 7.6 g/t silver, in the measured and indicated categories. In the inferred resource category, the project contains 8.5-million tonnes grading 2.1% copper, 1.7 g/t gold and 7.9 g/t silver.

Cygnus shareholders will be asked to approve the scheme during a meeting in September, with implementation of the scheme, if approved, anticipated to occur shortly after.

For the scheme to proceed, at least 75% of Cygnus shareholders must vote in favour of the deal.

Additionally, Central Asia will convene a shareholder meeting to approve the allotment of new shares and for approval to list on the TSX or TSX-V prior to implementation of the scheme.

Central Asia intends to provide the holders of new Central Asia shares the ability to trade on the TSX or TSX-V, and to broaden its investor base in North America, while retaining its listing in London.

For Cygnus, the deal provides exposure to Central Asia’s robust and sustainable cash flow, with Central Asia having reported free cash flow of $56-million in the 2025 financial year, with improvements anticipated in the 2026 financial year.

Central Asia returned $28-million to shareholders in the 2025 financial year.

Cygnus shareholders will be exposed to increased liquidity and benefit from Central Asia’s proven project development and operational expertise in base metals, underground mining, processing and dry stack tailings.

Central Asia will undertake an updated preliminary economic assessment on the project and advance it towards a feasibility study.

Central Asia nonexecutive chairperson Nick Clarke deems the transaction a compelling opportunity for Central Asia to add a high-grade copper and gold asset that fits well alongside 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.

“The scheme is consistent with our disciplined approach to pursuing acquisitions that enhance long‑term cash generation,” Clarke states.

Central Asia CEO Gavin Ferrar adds that the acquisition of a high-grade copper and gold project in a Tier 1 jurisdiction represents a material step to strengthening the group’s portfolio, while Cygnus executive chairperson David Southam deems the transaction a “win-win” outcome for both sets of shareholders.

“Cygnus shareholders can maintain their exposure to the Chibougamau project while reaping the benefits of a highly respected base metals operating company that produces free cash flow and pays dividends. These strengths are expected to mitigate for existing shareholders certain future financial burdens associated with project development.

“Central Asia has all the necessary experience in underground mining, processing, dry stack tailings and concentrate production to deliver the Chibougamau project.

"Importantly, Central Asia has a strong social licence in its current operations and we expect them to be an excellent partner for our local communities and other stakeholders,” Southam concludes.