What’s new: Fury Gold Mines (FURY) is a TSX and NYSE-listed explorer that is building up its reserves and looks to be digging gold from assets in Canada.
The company is different from many other single-asset exploration companies, as it has four key assets. The benefit of that position is reflected in the recently closed partial sale of their stake in Dolly Varden Silver Corporation (“Dolly Varden Silver”) which has secured financing for FURY to continue exploration activities without dilution, despite weak markets.
Fury sold 17 million common shares at C$0.40 per share in the capital of Dolly Varden Silver, representing approximately 7.4% of the outstanding common shares, to a well-known institutional investor.
Context: Fury Gold Mines hosts the gold assets of former Auryn Resources and the assets of former Eastmain Resources. FURY retained the high-grade gold Eau Claire project in the James Bay gold camp in Quebec; the Committee Bay project in Nunavut, a large stake in Dolly Varden Silver, and an operator interest in the Éléonore South JV (with Newmont).
The diverse assets of Fury have increased financing flexibility during this weak period in the markets and allowed Fury to sell down their Dolly Varden stake to secure finance for the exploration of their key assets. Even though several key steps remain, this sale has moved them one step closer to digging gold in Canada.
The Strategy: Tim Clark, the experienced CEO of Fury Gold Mines, brings institutional focus and an extensive network of leadership connections in the gold mining sector to this junior exploration company. Tim is positioning FURY as a focused exploration and development play that could be digging gold in one of the top mining jurisdictions in the world.
The big picture: Tim negotiated the sale and consolidation of FURY’s Homestake Ridge project with the contiguous Dolly Varden assets for a stake (post-sale 26%) in Dolly Varden Silver (C$120m market cap). The transaction closed in February 2022. Tim cut costs, ordered refocused spend on key targets around Eau Claire, halted exploration spending in Nunavut, and restructured the Éléonore South JV (retained operatorship and a 50% stake).
The market is not giving much value to any of these assets, as the details of resources remain very preliminary in nature. That hasn’t stopped its corporate peers from assigning value, as seen in the Homestake Ridge asset-for-shares transaction with Dolly Varden.
The next steps
The key targets: The preliminary economic assessment (PEA) of 2018 confirmed the suitability of digging gold around Eau Claire, but the intended mine (three years open pit and 10 underground) was too small scale (would produce on average 79,200 oz gold per year) for institutional investors. So Fury’s exploration team was tasked to increase the reserves and resources and allocate capital accordingly.
Meanwhile: FURY announced excellent assay results from the first phase of their summer 2022 drill program, and confirmed a potential 20%, or 330m, increase to the mineralized strike length of the Eau Claire Deposit. We await results from further step-out drilling around Eau Claire and on the north limb, which would firm prospects to double the asset.
Go deeper: FURY and Newmont restructured the Éléonore South JV and are now sole partners in this prospective land asset. New exploration targets have been established and an agreement with the neighbour, Sirios Resources and their Cheechoo Deposit can unlock further value.
By the numbers: Inferred resources in Sirios’s open-pit mine, in the diagram below shown to be to the north of the Éléonore South JV boundary (redline at the bottom), contain 1,955,000 ounces of gold. If FURY agrees with Sirios to cross the boundary with a shallower pit resources would materially increase (even with no minerality assigned to the Éléonore South JV) for Sirios Resources.
What we are watching: The key Eau Claire assets are in an excellent location for digging gold, with highly prospective assets, access to cheaper hydroelectric power, and great infrastructure. Results of the new targets at Percival and the Éléonore South JV present opportunities for considerable discoveries.
Why it matters: Finding enough resources to support digging gold at a rate of 200koz p.a. at one specific asset is necessary to attract more institutional interest, and attract the interest of other gold miners. Eau Claire has industry-leading operating costs and is located in a Tier-1 jurisdiction, with very modest upfront Capex, which helps if the company eventually secures enough reserves to proceed with mining.
Fury Gold Mines
Location: Vancouver, Canada
Tickers: NYSE:FURY TSX:FURY
Project Stages: Exploration
Editor’s note: This article has been updated with new details throughout.
Disclaimer: This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Little Square Capital expressly disclaims all liability with respect to actions taken based on any or all of the information in this article.