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Fury flurry to produce new Canada, Peru focused explorers

Canadian gold explorers Auryn Resources and Eastmain Resources have hatched a plan to form Fury Gold that involves the former paying a hefty premium for Eastmain before trying to reinstate some value by spinning out its Peru interests into two new companies.
Fury flurry to produce new Canada, Peru focused explorers Fury flurry to produce new Canada, Peru focused explorers Fury flurry to produce new Canada, Peru focused explorers Fury flurry to produce new Canada, Peru focused explorers Fury flurry to produce new Canada, Peru focused explorers

50,000m drilling program planned for Eau Claire in Quebec post creation of Fury Gold

Staff reporter

Auryn says local investment bank Evans & Evans has put a "midpoint value" of US$45.5 million on the Sombrero, Curibaya and Huilacollo copper-gold and gold-silver projects.

Taking into account the "assumed value" of the Peru projects and SpinCo shares offered to ‘new' Fury Gold investors, Auryn says the C$121 million offer - or about 42c per share - to Eastmain holders represents a 137% premium to the latter's July 29 closing price, and 123% premium on the 20-day weighted average Eastmain share price.

Eastmain shares (TSX: ER) have climbed from C11c to 18c since the start of the year, valuing the company at about C$51 million this week.

Auryn (TSX: AUG), which fell nearly 2% on the merger announcement, is up 65% since the start of 2020 to C$3.09, giving it a market value around $323 million.

A 10:7 consolidation of new Fury Gold shares at the time of the Peru spin-outs is expected to leave Fury with about 110 million shares on issue, 69% owned by Auryn and 31% by Eastmain shareholders. Fury Gold is expected to remain listed on the TSX and NYSE American exchanges.

Its three core Canadian gold projects will be Eau Claire in Quebec, Committee Bay in Nunavut and Homestake Ridge in British Columbia. Former Agnico Eagle vice president of corporate development Mike Timmins has been put forward as the new president and CEO of Fury Gold, which is said to be planning to provide updated exploration plans for Homestake Ridge and Committee Bay post the merger, and start a 50,000m drill program at Eau Claire, near Newmont's Eleonore gold mine.

"Fury Gold will combine the high-grade gold projects, Committee Bay in Nunavut, Homestake Ridge in BC and Eau Claire in Quebec, to offer investors a robust Canadian, gold-focused exploration and development company," said Auryn chairman Ivan Bebek, who is expected to be chairman of Fury.

"We are very excited to welcome Mike Timmins as CEO of this new endeavour and believe that his impressive pedigree combined with our world-class technical team will successfully execute on our goal of creating significant shareholder value through discovery and development in all three jurisdictions."

Bebek said the splitting of Auryn "should unlock considerable value for Auryn shareholders, and importantly, results in three, commodity-specific exploration companies well-positioned for major discoveries as we head into the bull market".

"Sombrero and Curibaya are premier exploration targets in Peru and we are in the final phases of permitting for inaugural drill programs," he said.

"We plan to significantly enhance the value of these entities over the coming months, prior to their relisting, through achieving drill permits, completing additional community agreements to provide access to more areas, identifying additional high priority targets and further value-added acquisitions."