Auryn Resources Inc. (TSX: AUG) announced a $22.5 million bought deal equity financing on Monday, hot on the heels of recent plans to acquire Eastmain Resources Inc. (TSX: ER) and spin out its own Peruvian assets.
The deal, which was jointly announced with Eastmain, encompasses a bought deal of 7.5 million subscription receipts at $3.00 each to a syndicate of underwriters led by Canaccord Genuity Corp. and Beacon Securities Limited. The subscription receipts will convert into Auryn shares following the completion of the aforementioned takeover transaction following the spin out of its projects in Peru into the new Fury Gold Mines Limited. Following the spinout, in which Auryn shareholders will each receive 0.7 shares of Fury Gold, 69% of Fury Gold's approximately 110 million outstanding shares will be owned by Auryn shareholders.
“We are excited to welcome these investors as new shareholders of Fury Gold and to position the company with $22.5 million to carry out its aggressive growth plans through exploration and development over the next 12 months," Ivan Bebek, Auryn's executive chairman, said in the release. "With this financing condition met, we look forward to our planned 50,000-meter drill program commencing this fall to expand the Eau Claire high-grade gold deposit, following the closing of the Eastmain Transaction.”
Auryn is acquiring the Eau Claire deposit from Eastmain. A 2018 resource estimate pegged the deposit with 853,000 ounces of gold at an average grade of 6.18 grams of gold per tonne (g/t Au) indicated and 500,000 ounces inferred at an average grade of 6.53 g/t Au. The company says that Fury's massive 50,000 drill program at the project is set to commence right after the spinout transaction.
Mike Timmins, a mining executive who formerly worked with Agnico Eagle Mines Ltd. (TSX: AEM) and Placer Dome Inc., will step in as CEO of Fury Gold. Eastmain's CEO, Blair Schultz, will step down to a director role.