LONDON/QUEBEC - Central Asia Metals PLC (AIM:CAML) announced today it will acquire Cygnus Metals Limited (ASX:CY5, TSXV:CYG, OTCQB:CYGGF) through an Australian scheme of arrangement valued at approximately A$232 million, according to a press release statement.
Under the agreement, Cygnus shareholders will receive 0.06 new CAML shares for each Cygnus share held, valuing each Cygnus share at A$0.176 based on CAML’s closing price of £1.56 on June 1 and an exchange rate of A$1:£0.53. The all-stock transaction represents a 60% premium to Cygnus’ closing price of A$0.11 on June 1.
The acquisition adds the Chibougamau Project in Quebec, Canada, to CAML’s portfolio. The copper-gold development asset has a mineral resource estimate of 6.4 million tonnes at 2.3% copper grade, 0.8g/t gold grade and 7.6g/t silver grade in measured and indicated categories, with an additional 8.5 million tonnes at 2.1% copper grade, 1.7g/t gold grade and 7.9g/t silver grade in inferred resources.
Following implementation, existing CAML shareholders will own approximately 70% of the enlarged company, with Cygnus shareholders holding 30%.
Major Cygnus shareholders representing approximately 29% of shares on issue have indicated their intention to vote in favor of the scheme, subject to an independent expert concluding it is in shareholders’ best interests and absent a superior proposal.
The Cygnus board unanimously recommends shareholders vote in favor of the scheme, subject to the same qualifications. The CAML board recommends its shareholders approve the share issuance.
The scheme requires approval from at least 75% of votes cast and a majority of Cygnus shareholders at a meeting expected in mid-September. CAML shareholders must also approve the share allotment at a separate meeting. Implementation is expected in September, pending regulatory approvals and court approval.
CAML intends to apply for listing on the Toronto Stock Exchange or TSX Venture Exchange to provide trading access for new shareholders.
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