/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED
STATES/
VANCOUVER, BC and
TORONTO, Aug. 31, 2020 /CNW/ - Auryn Resources Inc.
(TSX: AUG) (NYSE-American: AUG) ("Auryn" or the
"Company") and Eastmain Resources Inc. (TSX: ER)
("Eastmain") are pleased to
jointly announce that Auryn has entered into an agreement with a
syndicate of underwriters co-led by Canaccord Genuity Corp. and
Beacon Securities Limited in connection with a bought deal private
placement financing (the "Bought Deal Offering") of
an aggregate of 7,500,000 subscription receipts of the Company (the
"Subscription Receipts") to raise gross proceeds of
C$22,500,000. The Subscription
Receipts will be exchanged for common shares of Auryn concurrently
with completion of the recently announced transaction whereby Auryn
will acquire Eastmain
("Eastmain Transaction") after spinning-out Auryn's Peruvian
operations to Auryn shareholders. The Eastmain Transaction will
create Fury Gold Mines Limited ("Fury Gold"), a leading
developer of Canadian gold projects. It will also result in two
additional new independent companies holding Auryn's Peruvian
projects. The sale of Subscription Receipts will fulfill a
principal condition of the Eastmain Transaction.
A Message from Ivan Bebek,
Executive Chairman & Director of Auryn:
"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.
With this financing condition met, we look forward to commencing
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."
A Message from Blair Schultz,
Interim President & CEO of Eastmain:
"This financing is a big step forward for Eastmain as we prepare to become Fury Gold
Mines shareholders. Fury is creating a Canadian focused gold
company, well positioned to capitalize on the opportunities at
Eau Claire and across its pipeline
of high-grade gold assets."
The Subscription Receipts are being concurrently sold in two
tranches. The first tranche of Subscription Receipts will be issued
at a price of C$2.00 per
Subscription Receipt for gross proceeds of C$5,000,000 and the second tranche of
Subscription Receipts will be issued at the higher price of
C$3.50 per Subscription Receipt (the
"FT Price") and will be exchanged for Fury Gold shares,
which are designated as flow through shares as described below.
Pricing of the Subscription Receipts reflects that the Fury Gold
common shares, into which both tranches of the subscription
receipts will be exchanged on a basis of one Subscription Receipt
into one common share of Fury Gold , are as constituted after the
spinout of Auryn's Peruvian projects and common share
consolidation. Therefore, the subscription receipts do not
participate in the spin-outs and will not be consolidated.
Common shares that qualify as "flow-through shares" require the
Company to renounce in favour of the investors who paid the FT
Price certain Canadian income tax deductions which the Company
incurs by spending the proceeds on qualifying Canadian exploration
expenses. The Company does not have any near term need for these
income tax deductions and shares designated as "flow through
shares" are otherwise identical to the Company's other common
shares. The flow through obligations will be met when the Company
completes its planned drill program at the Eau Claire project in Quebec.
Further details regarding the Eastmain Transaction including its
principal completion conditions can be found in the Company's and
Eastmain's joint news release
dated July 29, 2020. The Bought Deal
Offering is scheduled to close on September
24, 2020 and is subject to customary completion conditions
including, but not limited to, the receipt of certain professional
opinions and the approval of the TSX and NYSE American stock
exchanges.
These securities will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent
registration or an applicable exemption from the registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy any of these
securities.
ON BEHALF OF THE BOARD OF DIRECTORS OF AURYN RESOURCES INC.
Ivan Bebek
Executive Chairman and Director
ON BEHALF OF THE BOARD OF DIRECTORS OF EASTMAIN RESOURCES INC.
Blair Schultz
Interim President and CEO
About Auryn
Auryn Resources is a technically-driven, well-financed junior
exploration company focused on finding and advancing globally
significant precious and base metal deposits. The company built a
portfolio of six projects in Canada and Peru containing gold, silver and
copper resources and exploration targets. On July 29, 2020, Auryn announced its
intention to spin out its Peruvian assets into two new
companies and acquire Eastmain Resources, creating a Canadian
gold-focused exploration and development company to be renamed
as Fury Gold Mines. The Company's two flagship Canadian properties
are the Committee Bay gold project in Nunavut and Homestake gold project in
British Columbia for which an
amended preliminary economic assessment was filed effective
June 24, 2020. Upon closing of
the spinout and acquisition transactions, expected
in October 2020, Fury Gold's three core assets will
comprise of Eau Claire in Quebec, Committee Bay and Homestake Ridge.
Auryn shareholders, invested prior to the completion of
the transactions, will become shareholders of Fury
and will also receive shares in the two
new Canadian spin out companies, one holding the Sombrero
copper-gold project, and the other holding both the Curibaya
silver-gold project and Huilacollo gold project. Auryn's technical
and management teams have an impressive track-record of
successfully monetizing assets for all stakeholders and local
communities in which it operates. Auryn conducts itself to the
highest standards of corporate governance and sustainability. For
more information on the company and the transactions, please
visit www.aurynresources.com.
About Eastmain
Eastmain is a Canadian
exploration company operating in the Eeyou Istchee emerging
James Bay gold camp in Québec.
Eastmain holds a 100%-interest in
the Clearwater Property, host of the Eau Claire Project, for which
it issued a Preliminary Economic Assessment ("PEA") in May 2018, and the Percival Discovery made in
November 2018. Eastmain is also the operator of the Éléonore
South Joint Venture, located immediately south of Newmont's
Éléonore Mine, which hosts the Moni/Contact Trend Discovery
(2017)
Forward Looking Information and Additional Cautionary
Language
This release includes certain statements that may be deemed
"forward-looking statements". Forward looking information is
information that includes implied future performance and/or
forecast information including information relating to or
associated with the acquisition, title to mineral
concessions and relating to the Bought Deal Offering,
including the use of proceeds and expected closing date, and
relating to the Eastmain Transaction. These statements involve
known and unknown risks, uncertainties and other factors which may
cause actual results, performance or achievements of the Company to
be materially different (either positively or negatively) from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Readers should refer to the risks
discussed in the Company's Annual Information Form and MD&A for
the year ended December 31, 2019 and
subsequent continuous disclosure filings with the Canadian
Securities Administrators available at www.sedar.com and the
Company's registration statement on Form 40-F filed with the United
States Securities and Exchange Commission and available at
www.sec.gov.
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
SOURCE Auryn Resources
