Cygnus Metals' (ASX:CY5) drill results from its Canada project can potentially lead to a merger or acquisition, as the region has previously seen as a tie-up between Iamgold and Northern Superior, according to a Tuesday Euroz Hartleys note.

The company on Monday said it found a new zone of mineralization in an area outside of the known resource at its Chibougamau project in Canada.

The research firm said that the "exciting" results could change the narrative on the potential scale of the area, as there is a possibility of growing into "something larger" in the future.

Euroz Hartleys added that if it turns out to be a discovery, the implications for cost reduction are significant, as it is just 200 meters below the surface.

Euroz Hartleys maintained its speculative buy rating on CY5 and raised its price target to AU$0.46 from AU$0.37.