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Cygnus Metals Ltd Management Reports 2026
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Management Reports
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CYGNUS METALS
CYGNUS METALS
Management’s Discussion and Analysis of Financial Condition and Results of Operations
For the Three Months Ended March 31, 2026 and 2025
(Stated in Australian Dollars)
ABN: 80 609 094 653
Cygnus Metals Limited
CYGNUS METALS
Management's Discussion & Analysis of Financial Condition and Results of Operations For the three months ended March 31, 2026 and 2025
Date of Report: 15 May 2026
GENERAL
The following Management's Discussion and Analysis ("MD&A") of Cygnus Metals Limited ("Cygnus" or the "Company") and its subsidiaries (the "Group") should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three months ended 31 March 2026 with a comparative period for the three months ended March 31, 2025, and the notes thereto. The Company's unaudited condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") and International Accounting Standards as issued by the International Accounting Standards Board ("IASB") and Interpretations (collectively, "IFRS Accounting Standards"). Unless otherwise stated, all amounts discussed herein are denominated in Australian dollars. This MD&A was prepared as of 15 May 2026, and all information is current as of such date. Readers are encouraged to read the Company's public information filings on SEDAR+ at www.sedarplus.ca.
This discussion provides management's analysis of the Company's historical financial and operating results and provides estimates of the Company's future financial and operating performance based on information currently available. Actual results will vary from estimates and the variances may be significant. Readers should be aware that historical results are not necessarily indicative of future performance.
CORPORATE OVERVIEW
Cygnus is a diversified critical minerals exploration and development company with key assets located in Tier 1 mining jurisdictions of Quebec, Canada and Western Australia. Cygnus acquired the Chibougamau copper-gold project ("Chibougamau Project") as part of its merger with Doré Copper Mining Corp. ("Doré") completed on 31 December 2024. The Chibougamau Project, located in central Quebec approximately 480km due north of Montreal, has excellent infrastructure with a 900,000tpa processing plant facility (Figure 1). The Company's primary focus is to advance the Chibougamau Project with an aggressive exploration program to drive resource growth and develop a hub-and-spoke operation model with its centralised processing facility. In addition, Cygnus has quality lithium assets with significant exploration upside in the world-class James Bay district in Quebec, and rare earth element ("REE") and base metal projects in Western Australia.
Cygnus was incorporated under the laws of Australia. The Company is listed on the Australian Securities Exchange ("ASX") under the symbol "CY5", on the Toronto Stock Venture Exchange ("TSXV") under the symbol "CYG", and on the OTCQB Venture Marketplace in the U.S. under the symbol "CYGGF". The Company's office is located at Level 2, 8 Richardson Street, West Perth WA 6005 Australia.
Cygnus Metals Limited
CYGNUS METALS
Figure 1: Assets located in Quebec close to major hydropower and rail infrastructure.
CHIBOUGAMAU PROJECT, QUEBEC
Cygnus has consolidated a large land package of over $281\mathrm{km}^2$ in the prolific Chibougamau mining district that has produced over 945,000t of copper and 3.5Moz of gold from 16 former producing mines between the early 1900s and 2008. $^1$
The Chibougamau Project has excellent infrastructure with a local mining town, sealed highway, airport, regional rail infrastructure and access to hydro power via installed powerlines. The infrastructure includes a processing facility of 900,000tpa consisting of a conventional circuit that produced a high-quality clean concentrate. The processing facility is located 10km from the town of Chibougamau and was last operated in 2008. It is the only remaining processing plant within the Chibougamau district and the only base metal processing facility within a 250km radius that hosts a number of other advanced copper and gold projects.
The Chibougamau Project has a high-grade Mineral Resource Estimate ("MRE") of 6.4Mt at $3.0\%$ CuEq for 193kt CuEq in the Measured and Indicated category and 8.5Mt at $3.5\%$ CuEq for 295kt CuEq in the Inferred category, reported in accordance with the JORC Code 2012 and the CIM Definition Standards (CIM, 2014). The resource base is comprised of five deposits – Corner Bay (main asset), Devlin, Cedar Bay, Golden Eye and Joe Mann – all located within a 60km radius of the centralized processing facility (Figure 2).
Cygnus Metals Limited
CYGNUS METALS
Figure 2: Chibougamau Project is comprised of the Corner Bay, Devlin, Cedar Bay, Golden Eye and Joe Mann deposits, and the 900,000t per annum processing facility.²
Scoping Study / Preliminary Economic Assessment ("PEA")
With the MRE update resulting in a $78\%$ increase in the Measured and Indicated Mineral Resources, the Company also sees significant value in continuing to advance the Project with an updated Scoping Study / PEA (Doré Copper had previously completed a PEA in 2022).* The updated Scoping Study / PEA is in progress. Pending the Golden Eye drilling results and potential changes to the quantum of Indicated resources, the materiality of Golden Eye in an updated PEA may increase. Accordingly, further optimisation may be required in the Scoping Study / PEA given the close proximity of Golden Eye to the milling infrastructure.
*Note: Cygnus cautions that the PEA is a preliminary technical, conceptual and economic study undertaken by Doré of the initial evaluation and potential development of the Chibougamau Project. It is at scoping study level only, which is based on a lower level of technical assessment that is not sufficient to support the estimation of Ore Reserves and is inherently uncertain. The production targets and forecast financial information disclosed in the PEA are underpinned by Measured Mineral Resources (approximately 1.17%), Indicated Mineral Resources (approximately 32.10%) and Inferred Mineral Resources (approximately 66.73%). However, Cygnus is not able to disclose the outcomes of the PEA as the significant proportion of Inferred Resources included in the Life of Mine means that pursuant to ASX and ASIC guidance there is not considered to be sufficiently reasonable grounds for the production targets and forecast financial information disclosed in the PEA. Accordingly, Cygnus is not disclosing the production targets and forecast financial information reported in the PEA and cautions investors against making investment decisions based on such targets and forecasts.
Cygnus Metals Limited
CYGNUS METALS
JAMES BAY LITHIUM PROJECTS, QUEBEC
Cygnus has three key lithium projects for a total of 390km² in the world-class James Bay lithium region of Quebec:
- Pontax Project (51% interest) –Inferred Mineral Resource of 10.1Mt at 1.04% Li₂O reported in accordance with the JORC Code (Inferred Mineral Resource of 8.27Mt at 1.02% Li₂O reported in accordance with NI 43-101).³
- Auclair Project – Significant drill intersection of 43.7m at 1.15% Li₂O (refer to ASX release dated 8 April 2024); and
- Sakami Project – Early-stage lithium exploration project in the La Grande greenstone belt which hosts the substantial Shaakichiuwaanaan lithium deposit.
The James Bay region is one of the most endowed lithium terranes in the world with significant discoveries and exploration activity over the last couple of years.
EXPLORATION PROJECTS, AUSTRALIA
Cygnus has approximately 843km² (100% Cygnus) of granted tenements in the Southwest Terrane, an underexplored region of highly prospective geology, within the prolific Yilgarn Craton in Western Australia. The projects cover interpreted and known greenstone belts where previous explorers identified numerous prospects with widespread high grade, near surface gold and/or base metals mineralisation. Cygnus is exploring key prospective tenure for lithium as well as REEs, nickel, copper, gold and platinum group elements ("PGEs").
INTERIM MD&A – QUARTERLY HIGHLIGHTS
The Company's key events and highlights during the three months ended 31 March 2026 and up to 15 May 2026 include:
CORPORATE
Placement
On 13 March 2026, Cygnus announced the successful completion of a single tranche share placement to institutional and sophisticated investors totalling A$25 million before costs, priced at A$0.16 per share. Placement funds will be used for resource growth and conversion, exploration of multiple prospects including Joe Mann and Gwillam, ongoing permitting work, study completion, some early works at the milling infrastructure and working capital, including costs of the placement. On 20 March 2026, Cygnus issued 156,250,000 shares under the share placement. The placement was very well supported, particularly by the Company's second largest shareholder (prior to placement) Ocean Partners. Refer to the ASX announcement on 13 March 2026 for further information.
EXPLORATION
In the first quarter of 2026, the Company completed 25 drill holes totalling 9,229 meters at the Chibougamau Project. The geology team continued its data compilation and generative exploration activities to develop new targets at the Chibougamau Project. A description of the exploration activities carried out by Cygnus in the first quarter is summarized below.
No substantive exploration activities were conducted at Cygnus' three key lithium projects in the James Bay region of Quebec and Cygnus' tenements in Western Australia.
Golden Eye
From January to April 2026, Cygnus completed a drilling program of 15 holes totalling 5,632m at Golden Eye, aimed at resource conversion and extension with the gold of expanding the current Mineral Resource, which stands at 0.5Mt at 5.6g/t AuEq for 91koz AuEq (Indicated) and 1.2Mt at 4.6g/t AuEq for 182koz AuEq (Inferred).²
Cygnus Metals Limited
CYGNUS METALS
On 16 April 2026, Cygnus announced the results from four drill holes with the following significant intersections (Figure 3):
- 5.9m at 28.8g/t AuEq (24.8g/t Au, 2.7% Cu & 31.5g/t Ag), including 1.0m at 105.5g/t AuEq (102.9g/t Au, 1.4% Cu & 53.0g/t Ag) (LDR-26-12A);
- 7.7m at 4.0g/t AuEq (2.7g/t Au, 0.8% Cu & 8.2g/t Ag) (LDR-26-12A);
- 11.5m at 4.3g/t AuEq (2.5g/t Au, 1.1% Cu & 26.1g/t Ag), including 0.8m at 31.2g/t AuEq (13.3g/t Au, 11.9% Cu & 141.8g/t Ag) (LDR-26-13); and
- 6.7m at 5.9g/t AuEq (4.4g/t Au, 1.0% Cu & 9g/t Ag), including 2.0m at 13.8g/t AuEq (10.3g/t Au, 2.4% Cu & 21.0g/t Ag) (LDR-26-14).
The infill drilling results reconciled well against the block model and further confirmed the strong continuity of the mineralisation to a 50m spacing. Assays are pending for the remaining drill holes.
Figure 3: Golden Eye resource with recent infill results of up to 5.9m @ 28.8g/t AuEq.
Joe Mann
Cygnus flew a detailed airborne magnetics over the Joe Mann property in Q4 2025 and in January 2026 commenced a detailed Induced Polarisation ("IP") survey along major regional structures. Cygnus is targeting analogous gold mineralisation to IAMGOLD's Nelligan Complex, which is located just 10km west of the project and contains 4.3Moz Au (M&I) and 7.5Moz Au (Inferred).⁴ These surveys will help generate further drill targets in addition to some of the high-grade historic intersections that also require follow up.
Gwillim
At the Gwillim property, permits are underway for drilling to commence in the current quarter. Drilling at Gwillim will be co-funded by 50% JV partner Alamos Gold, which has a market capitalisation of ~C$25B. Gwillim is just 12km from the Chibougamau processing facility and has high potential for defining new resources. Initial drilling will focus on following up high-grade historic gold intersections⁵ such as:
- 7.6m @ 38.1g/t Au from 314.9m (87-KOD-18);
- 15.2m @ 9.4g/t Au from 155.1m (87-KOD-1); and
- 16.4m @ 8.3g/t Au from 168.3m (87-KOD-10).
Cygnus Metals Limited
CYGNUS METALS
ENVIRONMENTAL AND SOCIAL ASSESSMENT
As part of the Project directives for the ESIA, the Company completed flora and fauna inventory reports for the Corner Bay and Devlin projects and their connecting roads. Cygnus continues to sample the effluent from the Copper Rand tailings facility on a weekly basis. All water parameters are meeting regulated ranges and limits.
Studies and field works at the Corner Bay and Devlin areas were completed to provide further baseline characterisation of hydrology, hydrogeology and soil conditions completed in Q3 2025. The analysis of the sampled materials and collected information was in progress in Q1 2026. A Spring Q2 2026 field sampling program is planned for at Copper Rand and Golden Eye. These activities are required to understand the baseline conditions and are a requirement of the Quebec government Environmental Social Impact Assessment ("ESIA").
HEALTH AND SAFETY
No reportable health and safety incidents occurred. The site was focused on completing and annual review of procedures and training in Q1.
OUTLOOK
The Company has a clear strategy to focus on its Chibougamau Project to:
- Rapidly grow the current resource base through brownfield exploration and investment in drilling; and
- Advance the Project towards development through study work and utilising existing infrastructure.
Cygnus sees a substantial opportunity to create shareholder value via an established high-grade resource with significant growth potential, excellent infrastructure, 900,000tpa processing facility and clear pathway to production, all within a quality endowed mineral terrane that has seen minimal modern exploration.
Exploration drilling will continue in 2026 to test priority targets which a focus on resource growth opportunities and resource conversion. In parallel with the drilling, the Company will be conducting geophysics and data compilation to continue to build the pipeline of targets. The data compilation work is key to unlocking this historic district presenting low-risk brownfield exploration and resource growth opportunities.
With the copper and gold price gains seen in 2025 and thus far in 2026 and the increasing copper demand from sectors related to the clean energy transition, the Company anticipates accelerating the development of its proposed hub-and spoke model operation. The Scoping Study/PEA is expected to be completed this year and will be followed by a Feasibility Study. The completion of a Feasibility Study will require a substantial infill drilling program of over 30,000 meters at its flagship Corner Bay and Devlin projects. At the same time as completing the infill drilling program, the Company plans to complete all the required work to file the Quebec government Environmental Social Impact Assessment.
Cygnus Metals Limited
CYGNUS METALS
OVERALL PERFORMANCE
Total comprehensive gain of the Group for the three months ended 31 March 2026, amounted to $337,514 (2025: $1,010,183 loss). At 31 March 2026, net assets of the Company were $109,451,252 (31 December 2025: $84,035,916).
At 31 March 2026, the Group had $31,873,761 in cash and cash equivalents (31 December 2025: $13,351,264).
The following tables provide selected financial information that should be read in conjunction with the Company's audited financial statements for the reporting year ended 31 December 2025.
The following table sets out the equivalent interim financial data for the most recent and comparative quarters:
| | 2026
Q1
$ | 2025
Q4
$ | 2025
Q3
$ | 2025
Q2
$ | 2025
Q1
$ | 2024
Q4
$ | 2024
Q3
$ | 2024
Q2
$ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Total finance and other income | 131,335 | 122,826 | 158,646 | 68,045 | 692,758 | 647,505 | 646,980 | 775,861 |
| Total operating expenses | (2,804,268) | (2,995,255) | (1,831,455) | (1,726,347) | (2,028,100) | (1,042,106) | (1,041,394) | (2,058,139) |
| Loss for the period after income tax | (2,672,933) | (2,872,429) | (1,672,809) | (1,658,302) | (1,335,342) | (696,601) | (729,345) | (1,638,256) |
| Total comprehensive gain/(loss) for the period | 337,514 | (2,668,894) | (1,955,770) | (1,627,213) | (1,010,183) | (602,313) | (612,206) | (2,067,872) |
| Basic and diluted loss per share (cents per share) | (0.25) | (0.27) | (0.16) | (0.19) | (0.16) | (0.08) | (0.20) | (0.56) |
| Distributions or cash dividends declared per share | - | - | - | - | - | - | - | - |
Operating expenses were higher in the March 2026 quarter than in the March 2025 quarter due largely to the recognition of approximately $1,100,000 in accelerated share-based payment expenses in relation to approximately 19 million performance rights for which the related vesting condition was met during the current quarter.
On 6 January 2026, the Company issued 238,372 fully paid ordinary shares upon the exercise of 238,372 unlisted share options with various exercise prices and expiry dates. The Company received A$16,987 in cash proceeds before costs.
On 13 March 2026, the Company announced a share placement totalling A$25,000,000 (before costs) priced at A$0.16 per share to institutional and sophisticated investors. The Company issued 156,250,000 ordinary fully paid shares on 20 March 2026.
Placement funds are being used at the Chibougamau Copper-Gold Project to cover resource growth and conversion, exploration of multiple prospects (including Joe Mann and Gwillim), ongoing permitting work, minor early capital works and completion of an updated economic study following the preliminary economic assessment previously completed by Doré in 2022. Other uses include general working capital and costs associated with the share placement.
Due to the strengthening of the Australian dollar against the Canadian dollar during the period, other comprehensive income included gains in relation to the foreign currency revaluation of subsidiary ledgers which are denominated in Canadian dollars. These foreign currency revaluation gains or losses are recognised through a reserve in equity and does not form part of taxable operating income.
There were no other unusual operating, financing or investing activities during the March 2026 quarter.
SELECTED FINANCIAL INFORMATION
The following selected financial information has been extracted from the Company's general purpose financial statements which have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements and the Corporations Act 2001 (Cth).
Cygnus Metals Limited
CYGNUS METALS
The financial statements of Cygnus Metals Limited also comply with International Financial Reporting Standards ("IFRS") including International Accounting Standard 34 Interim Financial Reporting and international Accounting Standards as issued by the International Accounting Standards Board ("IASB") and Interpretations (collectively, "IFRS Accounting Standards").
These financial statements have been prepared under the historical cost convention except for investments held at fair value through other comprehensive income.
The functional currency of each entity within the group is measured using the currency of the primary economic environment in which that entity operates, being Australian dollars for group entities domiciled in Australia and Canadian dollars for group entities domiciled in Canada. The consolidated financial statements are presented in Australian dollars which is the parent entity's functional and presentation currency.
| | Three months ended
31 March | | |
| --- | --- | --- | --- |
| | 2026
$ | 2025
$ | Direction
of change |
| Operations | | | |
| Total finance and other income | 131,335 | 692,758 | Decrease |
| Total operating expenses | (2,804,268) | (2,028,100) | Increase |
| Including the following expense categories: | | | |
| Consultants and contractors | (292,793) | (384,404) | Decrease |
| Corporate costs | (190,606) | (328,404) | Decrease |
| Employee benefits expense | (248,373) | (464,151) | Decrease |
| Share-based payments | (1,437,186) | (163,273) | Increase |
| Site administration and maintenance expense | (264,027) | (230,150) | Increase |
| Loss for the period after income tax | (2,672,933) | (1,335,342) | Increase |
| Total comprehensive gain/(loss) for the period | 337,514 | (1,010,183) | |
| Basic and diluted loss per share (cents per share) | (0.25) | (0.16) | Increase |
| Cash dividends declared per share | - | - | |
| Cash Flows | | | |
| Net cash flows used in operating activities | (1,952,615) | (1,506,242) | Increase |
| Net cash flows used in investing activities | (3,158,225) | (2,986,166) | Increase |
| Net cash flows from/(used in) financing activities | 23,640,636 | (54,433) | |
| Net change in cash and cash equivalents | 18,529,766 | (4,546,841) | |
| Cash and cash equivalents at the beginning of the period | 13,351,264 | 14,869,835 | |
| Effect of movements in exchange rates on cash held | (7,269) | 3,108 | |
| Cash and cash equivalents at the end of the period | 31,873,761 | 10,326,102 | |
| | 31 Mar
2026
$ | 31 Dec
2025
$ | Direction
of change |
| --- | --- | --- | --- |
| Balance Sheet | | | |
| Excess of current assets over current liabilities | 31,451,132 | 11,983,527 | Increase |
| Total assets | 115,701,669 | 90,803,017 | Increase |
| Total liabilities | (6,250,417) | (6,767,101) | Decrease |
Cygnus Metals Limited
CYGNUS METALS
RESULTS OF OPERATIONS
Operations
- Income comprises interest income which remained consistent with the comparative reporting quarter. Income also included approximately $590,000 in flow-through share premiums in the comparative period which was not incurred in the current period due to all flow-through share expenditure commitments being satisfied in 2025.
- Although various expense categories decreased in the current reporting period, operating expenses and losses increased overall in the current reporting period due to the recognition of approximately $1,100,000 in accelerated share-based payment expenses in relation to approximately 19 million performance rights for which the related vesting condition was met during the current quarter.
Cash Flows
- Net cash flows used in operating and investing activities have increased in the current reporting period due to the increase in exploration activities at the Chibougamau Copper-Gold Project compared to the comparative quarter immediately following completion of the acquisition of the Project.
- Net cash flows provided by financing activities have increased in the current reporting period due to completing $25,000,000 (before costs) in share placements versus nil in the comparative reporting period.
The table below, as at 31 March 2026, outlines how the Company has utilised the funds received from the $18,300,000 share placement completed in 2025, the $25,000,000 share placement completed in March 2026, any deviations from the anticipated use of funds, and the allocation of proceeds from these financings.
| Financings | Anticipated use of proceeds allocated | Allocated proceeds $ | Actual use of proceeds (as at 31 Dec 2025) $ | Variation from anticipated use of proceeds | Explanation and impact |
|---|---|---|---|---|---|
| Share Placement for proceeds of $18,300,000 (20 June 2025) | Exploration and feasibility expenditure across Canadian and Australian licenses. | $18,300,000 | $15,064,153 | The Company has not yet spent all of the proceeds of the financing. | N/A |
| General corporate purposes. | |||||
| Share Placement for proceeds of $25,000,000 (20 March 2026) | Exploration and feasibility expenditure across Canadian licenses. | $25,000,000 | $1,376,351 | The Company has not yet spent all of the proceeds of the financing. | N/A |
| General corporate purposes. |
Balance Sheet
- Total assets have increased at the end of the reporting period compared to the end of 2025 due largely to the receipt of $25,000,000 (before costs) in share placement proceeds. The value of listed investments also increased by $683,705 compared to the end of 2025.
- The excess of current assets over current liabilities has also increased largely due to the aforementioned share placement.
- Closing cash on hand increased by $18,522,497 between 31 December 2025 and 31 March 2026.
Cygnus Metals Limited
CYGNUS METALS
Exploration and Evaluation Assets
Movements in exploration and evaluation assets with respect to the Company's interest in mineral properties owned, leased or under option consists of the following for the three months ended 31 March:
| | 2026
$ | 2025
$ |
| --- | --- | --- |
| Opening balance | 73,828,269 | 61,309,265 |
| Expenditure incurred – Australian tenements | 54,149 | 207,355 |
| Expenditure incurred – Canadian tenements | 5,383,861 | 3,261,923 |
| Government grants received | (92,718) | (817,177) |
| Closing balance | 79,173,561 | 63,961,366 |
There was an increase in drilling and associated exploration activities in the current reporting period compared to the comparative quarter immediately following completion of the acquisition of the Project.
In the comparative reporting period, the Company received a Canadian Mining Tax Credit cash refund in relation to exploration expenditure incurred in 2024.
The following table includes a breakdown of exploration and evaluation assets by project area at 31 March.
| | 2026
$ | 2025
$ |
| --- | --- | --- |
| Australian gold and rare earth projects | 3,087,957 | 2,816,759 |
| James Bay (Canada) lithium projects | 26,755,711 | 26,888,216 |
| Chibougamau (Canada) copper-gold project | 49,329,893 | 34,256,391 |
| Totals | 79,173,561 | 63,961,366 |
The majority of exploration activities in the current and comparative reporting periods occurred on the Chibougamau Copper-Gold Project areas. The market sentiment for lithium remained depressed throughout the current reporting period resulting in somewhat restrained expenditure on these project areas.
PROPOSED TRANSACTIONS
From time to time, in the normal course of business, the Company considers potential acquisitions, joint ventures, and other opportunities. The Company will disclose such an opportunity if and when required under applicable securities rules.
LIQUIDITY AND CAPITAL RESOURCES
As at 31 March 2026, the Group had current assets of $33,893,357 (31 December 2025: $14,942,436), including cash and cash equivalents of $31,873,761 (31 December 2025: $13,351,264), and current liabilities of $2,442,225 (31 December 2025: $2,958,909).
The Group's cashflow forecast through to the end of June 2027 reflects that the Group will not be required to raise additional capital during this period to enable it to continue to meet its operational and planned exploration activities.
The Directors are satisfied that there is a reasonable basis to conclude that the Group can raise additional capital as and when required and thus it is appropriate to prepare the consolidated financial report on a going concern basis as the Group has potential options available to manage liquidity, including one or a combination of, a placement of shares, option conversion, entitlement offer or a change in the Company's expenditure profile.
Cygnus Metals Limited
CYGNUS METALS
RESTRICTED CASH
The Company did not have any restricted cash balances at 31 March 2026 or 31 December 2025.
FINANCIAL INSTRUMENTS
The Company's principal financial instruments comprise cash and short-term deposits, other receivables, investments and trade and other payables. There has been no significant change in the nature of the Company's financial instruments during the current reporting period.
The Company holds 1,650,000 shares in TSXV-listed Stria Lithium Inc ("Stria"). The Company has recognised a net fair value gain on revaluation of the Stria common shares of $683,705 during the current reporting period as a result of an increase in the share price of Stria.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the Company's financial performance.
CONTINGENT LIABILITIES
Rehabilitation Liability
As at the reporting date, the Company has not identified a present legal or constructive obligation to rehabilitate its exploration areas that would require recognition of a rehabilitation provision. This assessment is based on the Company's activities to date and the absence of any material disturbance or other past event giving rise to an unavoidable obligation to restore the site. Rehabilitation obligations may arise in the future as exploration and development activities progress and as regulatory approvals and site disturbance occur. At that time, the Company will recognise a provision for the best estimate of the expenditure required to settle the present obligation. The timing and amount of any future obligation will depend on the nature and extent of disturbance, the rehabilitation requirements attached to relevant approvals/tenements, and the scope of any approved closure/rehabilitation plans.
FINANCIAL LIABILITIES
Promissory Notes
In 2019, Doré Copper Mining Corp. ("Doré") issued promissory notes to Ocean Partners Investments Limited ("OPIL"), a related party, in the aggregate amount of CAD$7,500,000, plus accrued interest. These promissory notes are considered a financial liability under AASB 9 and were initially measured at fair value with subsequent measurement at amortized cost. The obligations of the Corporation under the promissory notes are guaranteed by Doré's wholly owned subsidiary CBay Minerals Inc. ("CBay") with such guarantee secured against the property and assets of CBay. Each of the promissory notes bear interest at a rate of 6% per annum, with CAD$1,000,000 maturing on the commencement of commercial production, CAD$2,000,000 maturing on the first anniversary of the commencement of commercial production, CAD$2,000,000 maturing on the second anniversary of the commencement of commercial production, and CAD$2,500,000 maturing on the third anniversary of the commencement of commercial production. The settlement of the obligation, both principal and interest, is contingent upon the timing of commencement of commercial production. Given the lack of certainty at this time as to whether Cygnus will reach the operational and economic milestones needed to achieve commercial production, and the estimated timeline to do so, the notes currently have nominal or no fair value.
On 10 October 2024, Cygnus and OPIL executed a Limited Waiver waiving the accrual of interest on the promissory notes for the period commencing on 1 October 2024 and ending on 31 December 2026.
The accrued interest as at 31 December 2024 would have been valued at CAD$2,456,875. Cygnus will reassess the amount, timing and probability of future cash flows at each reporting date to determine any required adjustments to the amortized cost balance of $Nil. As commercial production remains unlikely at 31 March 2026, no adjustments were necessary.
Cygnus Metals Limited
CYGNUS METALS
RELATED PARTY TRANSACTIONS
The Company's related parties include key management personnel ("KMP") and entities over which they have control or significant influence as described below.
KMP remuneration
| Three months ended 31 March | ||
|---|---|---|
| 2026 | 2025 | |
| $ | $ | |
| Short-term employee benefits | 335,097 | 294,790 |
| Post-employment benefits | 9,450 | 8,914 |
| Share-based payments | 996,620 | 161,157 |
| Totals | 1,341,167 | 464,861 |
No KMP has entered into a material contract with the Company since the end of the previous financial year and there were no material contracts involving directors' interests existing at the end of the current period.
The following transactions and arrangements with Director related parties occurred during the current and comparative reporting periods:
Andean Silver Limited, a company that David Southam and Ray Shorrocks are directors of, recharged shared office and travel costs to the Company during the three months ended 31 March 2026 totalling $6,647 (2025: $6,188). $4,431 was owing to Andean Silver Limited by the Company at 31 March 2026 (2025: $5,514).
FireFly Metals Limited, a company of which Kevin Tomlinson is a director, recharged shared administrative and head office occupancy costs to the Company during the three months ended 31 March 2026 totalling $22,672 (2025: $25,216). $12,488 was owing to FireFly Metals Limited by the Company at 31 March 2026 (2025: $15,180).
Terms and conditions of transactions with related parties
Transactions with related parties are made on terms equivalent to those that prevail in arm's length transactions. The value of these related party transactions is considered minor and the transactions save Cygnus significant costs should these services had been sourced directly. Outstanding balances at year-end are unsecured and interest-free and settlement occurs in cash and are presented as part of trade payables. There have been no bank guarantees provided for any related party payables. Amounts shown are net of GST paid or payable.
Cygnus Metals Limited
CYGNUS METALS
OUTSTANDING SHARE DATA
The Company's share capital consists of ordinary shares without par value. As at 15 May 2026, there were 1,220,913,340 ordinary shares issued and outstanding. In addition, there were 11,177,121 share options, 83,621,706 performance rights and 3,146,535 share rights on issue.
Ordinary Shares
The share capital of Cygnus consists only of fully paid ordinary shares; the shares do not have a par value. All shares are equally eligible to receive dividends and the repayment of capital and represent one vote at the shareholder meetings of the Company.
Details of movements in issued capital in the current and comparative reporting periods:
| Notes | Date | Shares | Issue Price $ | Total $ | |
|---|---|---|---|---|---|
| Opening balance at 1 January 2025 | 848,319,650 | 92,739,029 | |||
| Exercise of Share Rights | 1 | 6/02/2025 | 912,021 | - | 75,426 |
| Less share issue costs | (54,434) | ||||
| Closing balance at 31 March 2025 | 849,231,671 | 97,794,038 | |||
| Opening balance at 1 January 2026 | 1,064,424,968 | 110,301,681 | |||
| Exercise of share options | 6/01/2026 | 9,660 | 0.070 | 677 | |
| Exercise of share options | 6/01/2026 | 45,742 | 0.072 | 3,273 | |
| Exercise of share options | 6/01/2026 | 182,970 | 0.091 | 16,706 | |
| Share Placement | 20/03/2026 | 156,250,000 | 0.160 | 25,000,000 | |
| Less share issue costs | - | - | (1,376,351) | ||
| Closing balance at 31 March 2026 | 1,220,913,340 | 133,945,986 |
Notes:
1. Shares issued to directors and employees upon the exercise of vested Share Rights issued in lieu of cash salary in relation to 2024.
Each share has the same right to receive dividend and the repayment of capital and represents one vote at the shareholders' meeting of Cygnus.
Share rights
Information relating to share rights issued and converted during and outstanding at the end of the current reporting periods, is set out below.
| Issue Date | Expiry date | Opening balance 1-Jan-26 | Granted as remuneration | Converted | Closing balance 31-Mar-26 | Vested and convertible 31-Mar-26 | Value of rights expensed during the year $ |
|---|---|---|---|---|---|---|---|
| 9/07/24 | 31/07/29 | 2,019,128 | - | - | 2,019,128 | 2,019,128 | - |
| 30/10/24 | 31/07/29 | 726,382 | - | - | 726,382 | 726,382 | - |
| 10/01/25 | 31/07/29 | 401,025 | - | - | 401,025 | 401,025 | - |
| 3,146,535 | - | - | 3,146,535 | 3,146,535 | - | ||
| Issue Date | Expiry date | Opening balance 1-Jan-25 | Granted as remuneration | Converted | Closing balance 31-Mar-25 | Vested and convertible 31-Mar-25 | Value of rights expensed during the year $ |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 9/07/24 | 31/07/29 | 2,395,018 | - | (279,720) | 2,115,298 | 2,115,298 | - |
| 30/10/24 | 31/07/29 | 1,118,422 | - | (291,739) | 826,683 | 826,683 | - |
| 10/01/25 | 31/07/29 | - | 741,587 | (340,562) | 401,025 | 401,025 | - |
| 3,513,440 | 741,587 | (912,021) | 3,343,006 | 3,343,006 | - |
Cygnus Metals Limited
CYGNUS METALS
Share options
The share-based payment reserve records items recognised on valuation of director, employee and contractor share options and performance rights. Information relating to options issued, exercised and lapsed during the current and comparative reporting periods and outstanding at the end of the current reporting period is set out below.
| Grant Date | Expiry date | Exercise price | Opening Balance 1 Jan 2026 | Exercised | Lapsed | Closing Balance 31 Mar 2026 | Vested and exercisable at end of the period |
|---|---|---|---|---|---|---|---|
| 31/12/2024 | 16/02/2026 | $0.1748¹ | 365,940 | - | (365,940) | - | - |
| 31/12/2024 | 22/04/2026 | $0.6743¹ | 1,796,760 | - | - | 1,796,760 | 1,796,760 |
| 31/12/2024 | 19/08/2026 | $0.4843¹ | 82,336 | - | - | 82,336 | 82,336 |
| 31/12/2024 | 26/09/2026 | $0.0644¹ | 43,912 | (9,660) | - | 34,252 | 34,252 |
| 31/12/2024 | 12/05/2027 | $0.3617¹ | 1,024,631 | - | - | 1,024,631 | 1,024,631 |
| 31/12/2024 | 13/06/2027 | $0.3372¹ | 109,782 | - | - | 109,782 | 109,782 |
| 31/12/2024 | 19/08/2027 | $0.2514¹ | 1,829,700 | - | - | 1,829,700 | 1,829,700 |
| 31/12/2024 | 12/05/2028 | $0.1226¹ | 1,280,789 | (45,742) | - | 1,235,047 | 1,235,047 |
| 31/12/2024 | 19/04/2029 | $0.0614¹ | 6,907,116 | (182,970) | - | 6,724,146 | 6,724,146 |
| 31/12/2024 | 16/09/2029 | $0.0644¹ | 137,227 | - | - | 137,227 | 137,227 |
| 13,578,193 | (238,372) | (365,940) | 12,973,881 | 12,973,881 | |||
| Weighted average exercise price: | $0.2068 | $0.0733 | $0.1748 | $0.2077 | $0.2077 | ||
| Weighted average remaining contractual life: | 2.13 years |
Note: 1. Converted from a Canadian Dollar exercise price at the closing rate on 31 December 2024 of CAD:AUD = 0.891533
Various share options were exercised or lapsed and cancelled during the current reporting period.
Cygnus Metals Limited
CYGNUS METALS
Share options (continued)
Movements in share options in the comparative period:
| Grant Date | Expiry date | Exercise price | Opening balance 1 Jan 2025 | Issued | Exercised | Lapsed | Closing balance 31 Mar 2025 | Vested and exercisable at end of the period |
|---|---|---|---|---|---|---|---|---|
| 23/12/21 | 21/01/2025 | $0.1600 | 3,500,000 | - | - | (3,500,000) | - | - |
| 21/10/22 | 21/10/2025 | $0.2500 | 1,500,000 | - | - | - | 1,500,000 | 1,500,000 |
| 21/10/22 | 21/10/2025 | $0.5000 | 1,500,000 | - | - | - | 1,500,000 | 1,500,000 |
| 21/10/22 | 21/10/2025 | $0.7500 | 1,500,000 | - | - | - | 1,500,000 | 1,500,000 |
| 21/10/22 | 21/10/2025 | $1.0000 | 1,500,000 | - | - | - | 1,500,000 | 1,500,000 |
| 31/12/24 | 30/04/2025 | $0.4046¹ | 1,257,001 | - | - | - | 1,257,001 | 1,257,001 |
| 31/12/24 | 5/06/2025 | $0.1150¹ | 43,912 | - | - | - | 43,912 | 43,912 |
| 31/12/24 | 6/06/2025 | $0.1150¹ | 123,504 | - | - | - | 123,504 | 123,504 |
| 31/12/24 | 1/09/2025 | $0.5885¹ | 54,891 | - | - | - | 54,891 | 54,891 |
| 31/12/24 | 16/02/2026 | $0.1748¹ | 365,940 | - | - | - | 365,940 | 365,940 |
| 31/12/24 | 22/04/2026 | $0.6743¹ | 1,920,264 | - | - | - | 1,920,264 | 1,920,264 |
| 31/12/24 | 19/08/2026 | $0.4843¹ | 82,336 | - | - | - | 82,336 | 82,336 |
| 31/12/24 | 26/09/2026 | $0.0644¹ | 43,912 | - | - | - | 43,912 | 43,912 |
| 31/12/24 | 17/01/2027 | $0.4291¹ | 123,504 | - | - | - | 123,504 | 123,504 |
| 31/12/24 | 15/05/2027 | $0.3617¹ | 1,225,898 | - | - | - | 1,225,898 | 1,225,898 |
| 31/12/24 | 13/06/2027 | $0.3372¹ | 109,782 | - | - | - | 109,782 | 109,782 |
| 31/12/24 | 19/08/2027 | $0.2514¹ | 1,829,700 | - | - | - | 1,829,700 | 1,829,700 |
| 31/12/24 | 12/05/2028 | $0.1226¹ | 1,482,056 | - | - | - | 1,482,056 | 1,482,056 |
| 31/12/24 | 19/04/2029 | $0.0614¹ | 7,410,283 | - | - | - | 7,410,283 | 7,410,283 |
| 31/12/24 | 16/09/2029 | $0.0644¹ | 137,227 | - | - | - | 137,227 | 137,227 |
| 27,710,210 | - | - | (3,500,000) | 22,210,210 | 22,210,210 | |||
| Weighted average exercise price: | $0.14 | - | - | $0.16 | $0.33 | $0.33 | ||
| Weighted average remaining contractual life: | 1.26 years |
Note:
1. Converted from a Canadian Dollar exercise price at the closing rate on 31 December 2024 of CAD:AUD = 0.891533
3,500,000 share options exercisable at $0.16 held by a Company controlled by director Ray Shorrocks expired and were cancelled on 20 January 2025. These share options were granted to Mr Shorrocks in 2021 as part of his remuneration package.
Cygnus Metals Limited
CYGNUS METALS
Performance rights
Information relating to performance rights issued and lapsed during and outstanding at the end of the current and comparative periods, is set out below.
| Tranche | Grant Date | Vesting date | Expiry date | Opening Balance 1-Jan-26 | Cancelled | Closing Balance 31-Mar-26 | Vested and exercisable 31-Mar-26 | Value of rights expensed during the period $ |
|---|---|---|---|---|---|---|---|---|
| A | 15/08/22 | 29/08/23 | 21/10/27 | 1,500,000 | - | 1,500,000 | 1,500,000 | - |
| B | 15/08/22 | 29/08/23 | 21/10/27 | 1,500,000 | - | 1,500,000 | 1,500,000 | - |
| M | 31/01/23 | 01/11/24 | 13/02/28 | 5,000,000 | - | 5,000,000 | 5,000,000 | - |
| P | 31/01/23 | 13/02/28 | 13/02/28 | 4,000,000 | - | 4,000,000 | - | - |
| Q | 31/01/23 | 13/02/28 | 13/02/28 | 2,500,000 | - | 2,500,000 | 2,500,000 | - |
| R | 31/01/23 | 13/02/28 | 13/02/28 | 2,500,000 | - | 2,500,000 | - | 57,368 |
| V | 26/03/23 | 13/02/28 | 13/02/28 | 400,000 | - | 400,000 | 400,000 | - |
| W | 26/03/23 | 03/04/25 | 03/04/28 | 300,000 | - | 300,000 | 300,000 | - |
| Z | 02/03/23 | 24/02/26 | 04/05/28 | 50,000 | - | 50,000 | 50,000 | - |
| A4 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603 | - | 1,059,603 | 1,059,603 | - |
| A5 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603 | (1,059,603) | - | - | - |
| A6 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603 | - | 1,059,603 | 1,059,603 | - |
| A7 | 14/05/25 | 11/07/28 | 31/05/30 | 12,666,666 | - | 12,666,666 | - | 75,495 |
| A8 | 14/05/25 | 11/07/28 | 31/05/30 | 9,666,667 | - | 9,666,667 | - | 57,615 |
| A9 | 14/05/25 | 11/07/28 | 31/05/30 | 9,666,667 | - | 9,666,667 | - | 480,909 |
| A10 | 29/05/25 | 11/07/28 | 31/05/30 | 9,599,994 | - | 9,599,994 | - | 55,682 |
| A11 | 29/05/25 | 11/07/28 | 31/05/30 | 9,599,999 | - | 9,599,999 | - | 55,683 |
| A12 | 29/05/25 | 11/07/28 | 31/05/30 | 9,600,007 | - | 9,600,007 | - | 462,878 |
| A13 | 07/11/25 | 11/07/28 | 31/05/30 | 101,250 | - | 101,250 | - | 1,219 |
| A14 | 07/11/25 | 11/07/28 | 31/05/30 | 101,250 | - | 101,250 | - | 9,661 |
| A15 | 04/11/25 | 11/07/28 | 31/05/30 | 1,500,000 | - | 1,500,000 | - | 17,340 |
| A16 | 04/11/25 | 11/07/28 | 31/05/30 | 1,500,000 | - | 1,500,000 | - | 163,336 |
| 84,931,309 | (1,059,603) | 84,931,309 | 13,369,206 | 1,437,186 |
Cancellation of Performance Rights
On 12 January 2026, the Company cancelled 1,796,760 Performance Rights granted to the Executive Chair, David Southam due to the related vesting condition not being met by 31 December 2025.
Movements in performance rights in the comparative period:
| Tranche | Grant date | Vesting date | Expiry date | Opening balance 1-Jan-2025 | No Movements | Closing balance 31-Mar-2025 | Vested and exercisable 31-Mar-2025 | Value of rights expensed during the period $ |
|---|---|---|---|---|---|---|---|---|
| A | 15/08/22 | 29/08/23 | 21/10/27 | 1,500,000 | - | 1,500,000 | 1,500,000 | - |
| B | 15/08/22 | 29/08/23 | 21/10/27 | 1,500,000 | - | 1,500,000 | 1,500,000 | - |
| H | 16/11/22 | 15/06/24 | 30/07/25 | 250,000 | - | 250,000 | 250,000 | - |
| M | 31/01/23 | 01/11/24 | 13/02/28 | 5,000,000* | - | 5,000,000 | 5,000,000 | - |
| P | 31/01/23 | 13/02/28 | 13/02/28 | 4,000,000* | - | 4,000,000 | - | - |
| Q | 31/01/23 | 13/02/28 | 13/02/28 | 2,500,000* | - | 2,500,000 | - | 58,855 |
| R | 31/01/23 | 13/02/28 | 13/02/28 | 2,500,000* | - | 2,500,000 | - | 57,368 |
| V | 26/03/23 | 13/02/28 | 13/02/28 | 400,000 | - | 400,000 | - | 3,494 |
| W | 26/03/23 | 05/04/25 | 03/04/28 | 300,000 | - | 300,000 | - | 4,153 |
| X | 02/03/23 | 24/02/24 | 04/05/28 | 50,000 | - | 50,000 | 50,000 | - |
| Y | 02/03/23 | 24/02/25 | 04/05/28 | 50,000 | - | 50,000 | 50,000 | 664 |
| Z | 02/03/23 | 24/02/26 | 04/05/28 | 50,000 | - | 50,000 | - | 1,453 |
| A4 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603* | - | 1,059,603 | - | 17,878 |
| A5 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603* | - | 1,059,603 | - | - |
| A6 | 28/08/23 | 31/12/25 | 05/09/28 | 1,059,603* | - | 1,059,603 | - | 19,408 |
| 21,278,809 | - | 21,278,809 | 8,350,000 | 163,273 |
Note: * Approval for the issue of these securities was obtained under Listing Rule 10.14.
Valuation of Performance Rights issued
There were no performance rights issued during the current reporting period.
Cygnus Metals Limited
CYGNUS METALS
Performance rights (continued)
The terms of performance rights on issue during the current reporting period include:
| Tranche | Vesting conditions |
|---|---|
| A | The Company reporting a JORC compliant Inferred Mineral Resource of 5Mt at a minimum grade of 0.8% Li₂O on or before 21 October 2026. |
| B | The Company reporting a JORC compliant Inferred Mineral Resource of 10Mt at a minimum grade of 0.8% Li₂O on or before 21 October 2026. |
| M | 2 years’ continuous employment with the Company from the date of appointment (ie. up to and including 1 November 2024). |
| P | The Company reporting a JORC compliant Inferred Mineral Resource of 20Mt at a minimum grade of 0.8% Li₂O on or before 13 February 2028. |
| Q,V | The Company achieving a market capitalisation of at least $150,000,000 over a period of not less than 10 consecutive trading days on which trades in the Company’s shares actually occur. |
| R | The Company’s share price having a 10-day VWAP of at least $1.00 or a market capitalisation of at least $250,000,000 over a period of not less than 10 consecutive trading days on which trades in the Company’s shares actually occur. |
| W | Remaining engaged by the Company as a Director for a continuous period of 24 months from the date of appointment (ie. up to and including 3 April 2025). |
| Z | Remaining an officeholder, employee or consultant of the Company (or a wholly owned subsidiary) at all times up to and including 24 February 2026. |
| A4 | The Company’s TSR exceeds the median TSR of the Peer Group for the Performance Period. The proportion to vest will be calculated as: |
| - If TSR >50th percentile – 100% vesting | |
| - If TSR between 25th and 50th percentile – 50% vesting | |
| - If TSR <25% percentile – 0% vesting | |
| A5 | The Company reporting the discovery or acquisition of a JORC compliant Inferred Mineral Resource of 5Mt on any project (excluding the Pontax Project) at a minimum grade of 0.8% Li₂O on or before 31 December 2025. |
| A6 | Continuous employment with the Company up to and including 31 December 2025. |
| A7,A10 | The Company announces drilling results (excluding infill drilling) for the Chibougamau Project (including any additional tenure after the date of acquisition or application) with three intercepts which each have a copper or CuEq average grade equal to or greater than 3% over 5 metres or is otherwise capable of being expressed at an average grade of equal to or over 1% over a 15-metre period. The three intercepts must be at least 50m apart. |
| A8,A11, A13,A15 | -50% of the Performance Rights will vest upon the Company announcing that 50% of the Chibougamau Inferred MRE has been converted to a Mineral Resource with an Indicated (or higher) classification. |
| -75% of the Performance Rights will vest upon the Company announcing that 55% of the Chibougamau Inferred MRE has been converted to a Mineral Resource with an Indicated (or higher) classification. | |
| -100% of the Performance Rights will vest upon the Company announcing that 60% of the Chibougamau Inferred MRE has been converted to a Mineral Resource with an Indicated (or higher) classification. | |
| -The Performance Rights will vest on a pro-rata basis for conversion rates between the stated thresholds. | |
| A9,A12, A14,A16 | The 20-Day VWAP is A$0.1815 or more per Share (representing a 50% or greater premium to the 10-Day VWAP following the completion of the merger between the Company and Doré, which was A$0.121). |
Cygnus Metals Limited
CYGNUS METALS
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Company's critical accounting estimates are included in its unaudited interim financial statements and are summarised below, along with details of changes in estimates (if any) during the period.
Exploration and Evaluation Assets – Recognition
The entity carries exploration and evaluation expenditure as assets for expenditure accumulated on areas of interest where it is considered likely to be recoverable. The Group judges this to be the case where the Group has right of tenure over an area of interest, has substantive expenditure budgeted for the area of interest and the exploration activities have not yet resulted in sufficient information that would indicate the amounts are not recoverable up to the asset carrying value.
Share-Based Payments
Share-based compensation benefits are provided to employees via the Cygnus Employee Securities Incentive Plan.
Performance rights are issued for nil consideration and the term of the performance rights is determined by the Board in its absolute discretion but will ordinarily have a three-year term up to a maximum of five years. Performance rights are subject to lapsing if performance conditions are not met by the relevant measurement date or expiry date (if no other measurement date is specified) or if employment is terminated. The fair value of performance rights has been calculated at the grant date and allocated to each reporting period evenly over the period from grant date to vesting date. The value disclosed is the portion of fair value of the rights allocated to this reporting period.
The valuation models used to fair value options and performance rights take into account the exercise price (where applicable), the term to expiry, the vesting period, the impact of dilution, the non-tradeable nature of the options or performance rights, the share price at grant date and assumptions on the expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the options and performance rights. Expected share price volatility was determined with reference to actual share price volatility over the historic term of the Company's share price at grant date commensurate with the length of the related option or performance right's future vesting period.
Additionally, assumptions are made about the number of options and performance rights that are expected to vest, which could change from period to period. A change in any, or a combination, of these assumptions used in the valuation model could have a material impact on the total valuation of the options and performance rights.
Promissory Notes
The Group carries Promissory Notes at nil value. As at the reporting date, significant judgement is applied in determining their fair value, as settlement is contingent on the commencement of commercial production. As at reporting date, management has concluded that the fair value is nil due to the absence of certainty as to whether, or when, commercial production will be achieved, having regard to the early stage of development of the underlying Project and the significant technical, operational, permitting and funding milestones that remain outstanding. Accordingly, based on management's assessment of the probability weighted expected future cash flows, the timing of any potential settlement, and the substantial uncertainty surrounding the achievement of commercial production, the promissory notes are assessed to have nil fair value as at 31 March 2026.
The valuation of the Promissory Notes is subject to material estimation uncertainty, and changes in assumptions regarding project development or the likelihood of achieving commercial production could result in a material change in the recognised amount in future periods.
Cygnus Metals Limited
CYGNUS METALS
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The Company's management has evaluated the design of the Company's disclosure controls and procedures. Based on the results of that evaluation, management have concluded that, as of 31 March 2026, the Company's disclosure controls and procedures framework provides reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarised and reported, within the appropriate time periods and is accumulated and communicated to management as appropriate, to allow timely decisions regarding required disclosure.
Internal Control over Financial Reporting
The Executive Chair and Chief Financial Officer are responsible for establishing and maintaining adequate internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with AASB and IAS.
There have been no material changes in the Company's internal controls over financial reporting during the three months ended 31 March 2026.
All internal control systems have inherent limitations and may become ineffective because of changes in conditions. Therefore, even those systems that are determined to be effective can provide only reasonable, not absolute, assurance with respect to the preparation and presentation of the financial statements.
Approval
The Board oversees management's responsibility for financial reporting and internal control systems through the Audit Committee. The Audit Committee meets with the Company's independent auditors half-yearly to review the scope and results of the annual audits and half-yearly reviews and to review the financial statements and related financial reporting and internal control matters before the financial statements are approved by the Board and released. The Board has approved the audited annual financial statements and disclosure contained in this MD&A as at 15 May 2026.
FORWARD LOOKING STATEMENTS
This release may contain certain forward-looking statements and projections regarding estimated, resources and reserves; planned production and operating costs profiles; planned capital requirements; and planned strategies and corporate objectives. Such forward looking statements/projections are estimates for discussion purposes only and should not be relied upon. They are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond Cygnus' control. Cygnus makes no representations and provides no warranties concerning the accuracy of the projections and disclaims any obligation to update or revise any forward-looking statements/projections based on new information, future events or otherwise except to the extent required by applicable laws. While the information contained in this release has been prepared in good faith, neither Cygnus or any of its directors, officers, agents, employees or advisors give any representation or warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this release. Accordingly, to the maximum extent permitted by law, none of Cygnus, its directors, employees or agents, advisers, nor any other person accepts any liability whether direct or indirect, express or limited, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this release or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this release.
Cygnus Metals Limited
CAUTIONARY STATEMENT REGARDING RISKS
Mining operations generally involve a high degree of inherent risk. Certain factors could materially affect the Company's financial condition and/or future operating results, and could cause actual events to differ materially from those described in forward-looking statements made by or relating to the Company. See the paragraph regarding Forward Looking Statements above in this MD&A. The Company's business, financial condition or results of operations could be affected materially and adversely by certain risks. The reader should carefully consider these risks as disclosed in the Company's most recent annual report, as well as other publicly filed disclosure regarding the Company, which are available on the Company's website at https://www.cygnusmetals.com/investors/ and on SEDAR+ (www.sedarplus.ca).
COMPETENT PERSON AND COMPLIANCE STATEMENTS
The scientific and technical information in this report has been reviewed and approved by Mr Duncan Grieve, the Vice President of Exploration and Corporate Development of Cygnus, a “qualified person” as defined in National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.
SLR Consulting (Canada) Ltd. (“SLR”) prepared a technical report in accordance with NI 43-101 and the JORC Code entitled “NI 43-101 Technical Report -- Chibougamau Hub and Spoke Complex, Québec, Canada” dated as at October 31, 2025 with an effective date of August 30, 2025 (the “Chibougamau Technical Report”). All scientific and technical information in the annual report regarding the Mineral Resource Estimates for the Chibougamau Project has been extracted from the Chibougamau Technical Report, which was prepared by Marie-Christine Gosselin, P.Geo. géo. of SLR with the contribution of Renée Barrette, ing. of Ausenco Engineering Canada ULC, each of whom is a Qualified Person under NI 43-101. A copy of the technical report is available on the Company's profile on SEDAR+ at www.sedarplus.ca and on the Company's website at www.cygnusmetals.com.
The information in this report that relates to the Mineral Resource Estimates for the Chibougamau Project and the Pontax Project, and the Exploration Results for the Company's Canadian projects, is based on and fairly represent information and supporting documentation compiled by Mr Grieve. Mr Grieve is an employee of the Company and holds performance rights and shares in Cygnus. Mr Grieve is a Member of the Australian Institute of Geoscientists and has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which has been undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Grieve consents to the inclusion in this release of the matters based on the information in the form and context in which they appear.
Individual grades for the metals included in the metal equivalents calculations for the Mineral Resource Estimate at the Chibougamau Project, as well as the price assumptions, metallurgical recoveries and metal equivalent calculations themselves, are contained in the End Notes of the MD&A on page 22. Metal equivalents for exploration results have been calculated at a copper price of US$8,750/t, gold price of US$2,350/oz and silver price of US$25/oz, with copper equivalents calculated based on the formula CuEq(%) = Cu(%) + (Au(g/t) x 0.77258) + (Ag(g/t) x 0.00822). Individual grades for the metals included in the metal equivalents calculations for the exploration results in this report are contained in the Company's ASX releases as noted in the text. Metallurgical recovery factors have been applied to the copper equivalents calculations, with copper metallurgical recovery assumed at 95% and precious metal (gold and silver) metallurgical recovery assumed at 85% based upon historical production at the Chibougamau Processing Facility, and the metallurgical results contained in Cygnus' announcement dated 28 January 2025. It is the Company's view that all elements in the copper equivalent calculations in respect of the exploration results have a reasonable potential to be recovered and sold.
CYGNUS METALS
END NOTES
- Historic production statistics for the Chibougamau area are recorded in Leclerc. F, Harris. L. B, Bedard. J. H, Van Breeman. O and Goulet. N. 2012, Structural and Stratigraphic Controls on Magmatic, Volcanogenic, and Shear Zone-Hosted Mineralization in the Chapais-Chibougamau Mining Camp, Northeastern Abitibi, Canada. Society of Economic Geologists, Inc. Economic Geology, v. 107, pp. 963-989.
- The information in this release that relates to the Mineral Resource Estimate for the Chibougamau Project reported in accordance with the JORC Code 2012 and NI 43-101 was released by Cygnus in an announcement titled 'Major Resource Update' released to the ASX on 17 September 2025 and the TSXV on 16 September 2025. Details of the Mineral Resource Estimate for the Chibougamau Project as at 17 September 2025 are included below:
| Cu Project | Classification | COG CuEq | Tonnage | Average Grade | Contained Metal | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cu | Au | Ag | CuEq | AuEq | Cu | Au | Ag | CuEq | AuEq | ||||
| % | Mt | % | g/t | g/t | % | g/t | kt | koz | koz | kt | koz | ||
| Corner Bay | Indicated | 1.2 | 4.9 | 2.5 | 0.3 | 8.4 | 2.8 | 4.1 | 124 | 43 | 1,316 | 137 | 638 |
| Inferred | 5.4 | 2.7 | 0.2 | 8.9 | 3.0 | 4.3 | 146 | 41 | 1,543 | 159 | 744 | ||
| Devlin | Measured | 1.5 | 0.1 | 2.7 | 0.3 | 0.5 | 2.9 | 4.7 | 4 | 1 | 2 | 4 | 19 |
| Indicated | 0.6 | 2.0 | 0.2 | 0.2 | 2.1 | 3.4 | 13 | 4 | 5 | 13 | 69 | ||
| M&I | 0.8 | 2.1 | 0.2 | 0.3 | 2.3 | 3.6 | 16 | 5 | 7 | 17 | 88 | ||
| Inferred | 0.3 | 2.0 | 0.2 | 0.3 | 2.1 | 3.4 | 7 | 2 | 3 | 7 | 36 | ||
| Joe Mann | Inferred | 2.0 | 0.7 | 0.2 | 6.0 | - | 4.6 | 6.3 | 2 | 143 | - | 34 | 151 |
| Cedar Bay | Indicated | 1.8 | 0.3 | 1.6 | 6.0 | 9.9 | 6.4 | 8.1 | 4 | 50 | 82 | 16 | 67 |
| Inferred | 0.8 | 2.0 | 5.1 | 11.8 | 6.1 | 7.8 | 17 | 134 | 309 | 50 | 205 | ||
| Golden Eye | Indicated | 0.5 | 1.0 | 4.3 | 9.9 | 4.4 | 5.6 | 5 | 69 | 161 | 22 | 91 | |
| Inferred | 1.2 | 0.9 | 3.4 | 7.9 | 3.6 | 4.6 | 11 | 134 | 313 | 45 | 182 | ||
| Project | Classification | Tonnage | Average Grade | Contained Metal | |||||||||
| Cu | Au | Ag | CuEq | AuEq | Cu | Au | Ag | CuEq | AuEq | ||||
| Mt | % | g/t | g/t | % | g/t | kt | koz | koz | kt | koz | |||
| Hub and Spoke | Measured | 0.1 | 2.7 | 0.3 | 0.5 | 2.9 | 4.7 | 4 | 1 | 2 | 4 | 19 | |
| Indicated | 6.3 | 2.3 | 0.8 | 7.8 | 3.0 | 4.3 | 146 | 166 | 1,563 | 189 | 865 | ||
| M&I | 6.4 | 2.3 | 0.8 | 7.6 | 3.0 | 4.3 | 149 | 167 | 1,565 | 193 | 884 | ||
| Inferred | 8.5 | 2.1 | 1.7 | 7.9 | 3.5 | 4.8 | 182 | 454 | 2,168 | 295 | 1,318 |
Notes:
1. Cygnus' Mineral Resource Estimate for the Chibougamau Copper-Gold project, incorporating the Corner Bay, Devlin, Joe Mann, Cedar Bay, and Golden Eye deposits, is reported in accordance with the JORC Code and the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") (2014) definitions in NI 43-101.
2. Mineral Resources are estimated using a long-term copper price of US$9,370/t, gold price of US$2,400/oz, and silver price of US$30/oz, and a US$/C$ exchange rate of 1:1.35.
3. Mineral Resources are estimated at a CuEq cut-off grade of 1.2% for Corner Bay and 1.5% CuEq for Devlin. A cut-off grade of 1.8 g/t AuEq was used for Cedar Bay and Golden Eye; and 2.0 g/t AuEq for Joe Mann.
4. Corner Bay bulk density varies from 2.85 tonnes per cubic metre (t/m³) to 3.02 t/m³ for the estimation domains and 2.0 t/m³ for the overburden. At Devlin, bulk density varies from 2.85 t/m³ to 2.90 t/m³. Cedar Bay, Golden Eye, and Joe Mann use a bulk density of 2.90 t/m³ for the estimation domains.
5. Assumed metallurgical recoveries are as follows: Corner Bay copper is 93%, gold is 78%, and silver is 80%; Devlin copper is 96%, gold is 73%, and silver is 80%; Joe Mann copper is 95%, gold is 84%, and silver is 80%; and Cedar Bay and Golden Eye copper is 91%, gold is 87%, and silver is 80%.
6. Assumptions for CuEq and AuEq calculations (set out below) are as follows: Individual metal grades are set out in the table. Commodity prices used: copper price of US$9,370/t, gold price of US$2,400/oz and silver price of US$30/oz. Assumed metallurgical recovery factors: set out above. It is the Company's view that all elements in the metal equivalent calculations have a reasonable potential to be recovered and sold.
7. CuEq Calculations are as follows: (A) Corner Bay = grade Cu (%) + 0.68919 * grade Au (g/t) + 0.00884 * grade Ag (g/t); (B) Devlin = grade Cu (%) + 0.62517 * grade Au (g/t) + 0.00862 * grade Ag (g/t); (C) Joe Mann = grade Cu (%) + 0.72774 * grade Au (g/t); and (D) Golden Eye and Cedar Bay = grade Cu (%) + 0.78730 * grade Au (g/t) + 0.00905 * grade Ag (g/t).
8. AuEq Calculations are as follows: (A) Corner Bay = grade Au (g/t) + 1.45097 * grade Cu(%) + 0.01282 * grade Ag (g/t); (B) Devlin = grade Au (g/t) + 1.59957 * grade Cu(%) + 0.01379 * grade Ag (g/t); (C) Joe Mann = grade Au (g/t) + 1.37411 * grade Cu (%); and (D) Cedar Bay and Golden Eye = grade Au (g/t) + 1.27016 * grade Cu (%) + 0.01149 * grade Ag (g/t).
9. Wireframes were built using an approximate minimum thickness of 2 m at Corner Bay, 1.8 m at Devlin, 1.2 m at Joe Mann, and 1.5 m at Cedar Bay and Golden Eye.
10. Mineral Resources are constrained by underground reporting shapes.
11. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
12. Totals may vary due to rounding.
Cygnus Metals Limited
CYGNUS METALS
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The information in this release that relates to the Mineral Resource Estimate at the Pontax Project reported in accordance with the JORC Code 2012 has been previously released by Cygnus in an ASX announcement dated 14 August 2023 and titled "Maiden Resource of 10.1Mt at 1.04% Li₂O with mineralisation open in all directions". The Mineral Resource Estimate for the Pontax Project reported in accordance with the CIM Standards (2019) was prepared by QP Todd McCracken, P.Geo., of BBA Inc and was previously released by Cygnus in an ASX announcement dated 22 November 2024.
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Refer to IAMGOLD's news release dated 17 February 2026.
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Refer to CY5's ASX announcement dated 20 January 2026.
Cygnus Metals Limited
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