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.
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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.
