Cygnus IPOs on ASX to fund gold exploration at WA wheatbelt projects

Junior explorer Cygnus Gold (ASX: CY5) was admitted to the ASX today with a suite of gold tenements and several under application across Western Australia’s “underexplored” wheatbelt region.

Under its offer, the company expected to issue up to 30 million shares at A$0.20 each to raise at least A$5 million to fund exploration at its projects.

According to Cygnus, WA’s wheatbelt is geologically similar to the Kalgoorlie’s goldfields and the Murchison region which both host numerous gold operations and multiple explorers.

Unlike the goldfields and Murchison areas, the wheatbelt has undergone little gold exploration.

Cygnus has multiple projects and licence applications throughout WA from Bencubbin in the northern part of the wheatbelt to Frankland further south.

In the last 18 months, Cygnus has been busy exploring its tenements and has identified new areas for exploration as well as drill targets, including the Stanley project where drilling is scheduled to begin imminently.

Stanley encompasses a granted exploration licence across 161 square kilometres. Cygnus plans to carry out diamond and aircore drilling. Historical exploration at the project has returned near-surface intersections including 21m at 3.3 grams per tonnes.

However, the company cautions that 11 of its 21 tenements remain under application with the majority of applications encroaching “private land”. This requires owners’ consent prior to the applications being granted, which, if not given could inhibit Cygnus’ proposed exploration activities.

Most of the granted tenements lie on “private” land, but Cygnus has negotiated access with the owners.

Heading up the company is James Merrillees as managing director, and non-executive directors Michael Bohm (chairman), Simon Jackson, Amanda Buckingham and Oliver Kreuzer.

On the 9 January Resource Capital held a 10.99% stake in Cygnus, with Southern Cross Capital possessing an 8.24% interest, and Gold Road owning 6.18%.

Cygnus’s share price rocketed during intraday trade – hitting A$0.35, which is a 75% on its A$0.20 offer price.

By close of trade, the company’s price settled at A$0.31 – up 55%.