Building a Canadian Mining Company with Fury Gold Mines’ CEO Michael Timmins & Chairman Ivan Bebek
Fury Gold Mines’ (Ticker:FURY) CEO Michael Timmins and Chairman Ivan Bebek provide an overview and update on the company’s progress. Michael commented on the advancement at Fury’s flagship project: “Eau Claire continues to impress us. And I think it’s the sheer scale of the mineral endowment that has surprised us the most. This is the type of project that I was searching for back when I was at Agnico Eagle. Significant growth, high-grade gold, easy access, gold at all project scales and in different geologies and the suite of regional targets, that’s going to offer that long-term growth.”
Ivan commented on why he is excited about Fury Gold’s potential: “Just a tremendous amount of deep value. And just listening to Mike, talk about the projects and what’s on deck and coming, it reminds me of why I want to own a lot more of Fury, when appropriate. We have a lot of results pending, so I’m going to wait until they’re all out, but I just feel there’s a tremendous amount of deep value behind this robust exploration and all the torque you look for as a shareholder. And I think that’s going to be lived every month for the rest of the year. There’ll be some holes to look for that could really, really change the game for us considerably, to the upside. Love the direction the company’s headed. Feel it’s a tremendous opportunity right now. I don’t know the results yet. Obviously, want to know them as much as everybody listening, but there’s enough holes there that can give us a lot of different ways to win for investors. Not just here. There’ll be the ones at Homestake as well as at my favorite, Committee Bay, this summer. So, I look forward to an extremely active year. Company’s busy and you’re going to hear a lot from Mike and the team.”
0:00 Introduction
1:37 Eau Claire project overview
4:20 Gold macro situation & Fury Gold’s valuation
8:43 Shelf prospectus & why Fury filed it
10:34 Ivan’s perspective on flow-through financing
12:12 High-grade gold in Canada
15:00 Drilling focus among three projects
18:50 Upcoming catalysts
TRANSCRIPT:
Bill: Joining me today is Mike Timmins, the president and CEO, as well as Ivan Bebek, the chairman. Gentlemen, welcome to the show. Mike, I’m going to kick it over to you first. Can you kind of remind us of what the goals here are at your flagship project and what progress have you made thus far?
Mike: Yeah. Thank you, Bill. We’re happy to be here and I’m glad Ivan is here too. It’s good for a chairman to come in. Talk a little bit about the view from that seat and also as one of our major shareholders, so thank you to him, for joining us. We’ve been very busy, Bill at Eau Claire, obviously drilling the deposit and stepping on along the various extensions, as you’ve seen in the notes. The new Snake Lake structure that we’ve identified, which is parallel to Eau Claire, can be a step change for the project.
So, we’re hitting Snake Lake in behind our step-out drilling of Eau Claire, over a kilometer away from its surface expression. So, we’re actually developing a view that that might have the same size potential as Eau Claire itself. It is early days. Results out this month on our first three step-out holes below Snake Lake. So, that’s a pretty exciting development for us. The 850 Zone hosts Eau Claire’s western extensions. The previous owners were really focused on shallow open pit material and completely missed the Eau Claire potential which lies at about 300, 400 meters below that.
So, this has huge potential to add ounces, literally in our basement, within the original PEA footprint. So, another big eye-opener for us. We’ve also been very successful, I think, at deriving regional targets by diving deep into the data. A comprehensive review of the geophysics simply hadn’t been done before. And we recognize this incredible opportunity doing the due diligence, of really just starting to see those results coming out now of that work. Eau Claire continues to impress us. And I think it’s the sheer scale of the mineral endowment that has surprised us the most. This is the type of project that I was searching for back when I was at Agnico Eagle. Significant growth, high-grade gold, easy access, gold at all project scales and in different geologies and the suite of regional targets, that’s going to offer that long-term growth. And as you pointed out where we are, 20,000 meters into the first 50,000 meters program, and I’ve already outlined a ton of potential. And as you know, Bill, we’re just getting started.
Bill: So, with this Snake Lake target, if you’re successful there, are we looking at a big open pit or would this be like a satellite pit? I know you’re at the conceptual level now, but can you give us a taste of what this might mean, if you’re successful there?
Mike: It would be pit and underground, the same thing as Eau Claire, but we’re hoping it’s a mirror of it, is the big goal.
Bill: Okay. Ivan, could you kind of speak to the valuation and the macro situation? I was chatting with Mike before we hit record and I said, “You’ve had nothing but headwinds. Since he took over, the gold price goes from above $2,000 down below 1700. Now we’re trading sideways. So, the gold price hasn’t been helping. What is your analysis of the macro situation in the gold sector and specifically, Fury’s valuation right now?
Ivan: Okay. First off, great to be back here. Mike and his team have been doing an amazing job. Something that you don’t see that happens in our groups and specifically with Fury, is you don’t see the work behind the scenes that makes all of this happen. It’s really fun to point to great drill holes. It’s really fun to come out with a great plan, but executing that is paramount. And Mike’s really made it feel like we work with Agnico Eagle here, based on a lot of the professionalism that he’s brought across every platform in the company. So, hats off to Mike there. This doesn’t pay you today, shareholders, but it will pay you tomorrow. It will gander us a big premium later down the road, once things really start to come together for us.
And to your comment or your question about the headwinds, we don’t like excuses. We like results. And we like to show performance for our shareholders, but it has been challenging. And I’ve done this for about 21 years. And since we came public, gold went down almost $300 an ounce and we hit the worst sentiments since ’01. And when you can’t get love in the market, you just make sure you’re working really hard to create those opportunities for shareholders, going forward.
And you just heard Mike, talk a little bit about the holes at Snake Lake, something called the 850 Zone. There’s some big areas to really… And I like the word step change… Or a game changer would be the more familiar word… But step change is a word I like even better… The actual projects to double that potentially or triple it in size, which is something we felt originally had huge potential at Eau Claire. And that is where we’ve been heading, is in that direction. We have a great handle on the deposit. On the macro part of the gold market, I think we’ve seen a turn. We’ve seen it bottom pretty bad through a really tough quarter last quarter.
And I think the second half of the year, if you listen to many of the experts and see the money flow starting to come back to the space, I think we’re going to see new highs in gold. And when you look at that and think about Fury has 3.7 million ounces of seven grams per ton gold as an average grade just over seven grams. That’s a big statement. Not many companies have that, of our size and not many companies are able to find that anymore, because the exploration has gotten so much more difficult.
So, from that perspective, I think that all the hard work we’ve done and we’ve worked hard and Mike, I think you’ve had about three, 400 Zoom meetings. You know, Mike’s relentless. He doesn’t stop, because we have something to say. And this, I think is going to equate to us going from being with our peer group to performing well past the peer group. And what’s really going to do it and what does it for me every day. Is when I hear big exploration targets. I was a bit concerned at Eau Claire that there wasn’t that huge Committee Bay look to it or that huge upside look. I knew it could be there, but I needed to see more.
And Michael Hendricks and the team and Brian Atkinson, and the guys, have really done a phenomenal job of sifting through the copious amounts of data and something… And Mike Timmins, maybe you can comment on this. I’ve heard there’s a huge amount more samples that were not worth being used by our predecessors within the region on the project. And they’re getting to a lot better concepts for some big swings to take this summer too. So, I think for me, that’s a huge compliment on the project.
Mike: That’s true. I mean we are finding more data as we go and as we dig. As we round up the computers at camp and everything else and correlate it, so that we have one consistent systematic geological picture. So, that’s a 100% correct.
Ivan: Yeah. And then just the pace we’ve been going at, Bill. We’ve never slowed down. You know, bad market, some people become a little bit apprehensive about the pace they’re going at, but the confidence in the project goes up, you move forward. And if you believe in the gold market, you know that’s going to continue. You really step into your projects and that’s what we’re doing here. So, no, it’s been a lot busier than the share price would reflect. And I think that, in the next, as Mike said, six weeks, you’re going to start to see all of those results from all of this heavy lifting that we’ve been doing. In the second half of the year here, we should turn the corner with a lot more gold to talk about. And other programs that are on the horizon.
Bill: Ivan, you put out a press release recently about a shelf prospectus. Can you explain to listeners what that is and how you intend to raise money, moving forward?
Ivan: Sure. Shelf is a very, very, very efficient way of raising capital. There’s a bit of head cost, upfront, but we can raise up to $200 million in using this mechanism called the base shelf. And basically, if we want money in a week from now, we can get money in a week from now. I mean, if we’re marketing, if there’s investors interested that want to participate in a funding or in a large block of shares, we can close the transaction within one week. Now, traditional bought deals take about 45, 50 days, including the marketing that goes around and the legal costs can be astounding at times. And we all know that gold is volatile. The market is cyclical, but this gives us speed to capital. This also takes away the need to require to do a big funding, like a $20 million funding at once or a 30.
This gives us the chance to do five million here, 7 million there, and be very, very strategic with how we raise capital. So, we don’t ever have a big burden of a heavy financing to worry about. Right now, we’re in good shape financially. I think March 31st, we had about 10, $11 million in cash. And so, we don’t need money yet. We’re going to need it throughout the year, but small fundings along the way, unless we see a very, very key shareholder we want to add to the registry, an institution or an investor of consequence, we’d always consider that. But it allows us to be more strategic and a lot more inter dilutive with our financing approach.
So, it’s a big thing. We’re going to actually do this in all the companies I’m involved in, for the same purpose. One week to get the capital and to pick your shareholders carefully, as that’s been the real, real big important part of our culture and our share structures. It allows us to do that better.
Bill: Because your key project is in Quebec, what’s your take on flow-through financing Ivan? There’re pros and cons to it. And because you’re so particular of who you bring into the stock, sometimes you can bring in people that will sell the stock sooner than later, if you do a flow-through, even though you raise at a premium. What’s your take?
Ivan: So, we’ve done only charity flow-through. All of our money that we’ve raised at Auryn and all the money we’ve raised here, which is a lot different from flow. What charity flow-through is, it’s a mechanism where the buyer can be anybody. It can be an American. It can be a Canadian. It can be somebody overseas. But we get a premium on the price they pay when they make the investment. The only thing negative about charity flow-through, it’s not always available. And then on straight flow-through itself, which you asked me about, it’s something that I’ve turned away from because investors are not as aligned with the business of the company. They’re more aligned with the business of a tax saving transaction for their personal taxes.
So, from us, I think you would only see charity flow-through at the very best, but you know, it’s not available in huge capacities at all times through the year. And if you want to do a program and raise $5 million and there’s no flow-through available, we might have to do hard dollars. And we’re okay with that, because we might be able to do that on the back of some great results and pick better prices due to the one week, start to close, completing one of those transactions. So, either way, I would say it’s a benefit, because you can raise money at 80% premium to your spot price. Now that’s roughly where it ends up in Quebec. Or 40, 45% premium in Committee Bay or Homestake, but it’s not always there. We’ll use it when we can. And we’ll just make sure that we’re not doing the traditional flow-through where we don’t have control of the investors.
Bill: Mike, you have three projects in Canada. They are high-grade. Remind listeners, again, the focus of the company in terms of being in Canada and pursuing high-grade gold.
Mike: Yeah. I think there are many benefits to focusing on high-grade. So, you’ve got robust project [inaudible 00:11:46] clinics. You’ve got high-grade deposits, are exciting to drill at any gold price. So, you can be at 1250 or 2,500 and you’re still putting out high-grade gold. So, it’s exciting. And so, it weathers that storm. Investors looking for low risk in the mining sector can often filter on grade. And so, if they filter on high-grade, there’s only going to be a few names. And Fury, obviously stands out from the crowd. Drilling and growing high-grade gold deposits is challenging to say the least. Mother Earth is not easy. And so, the goal is to keep the rest of the business as low risk as possible.
So, we have very limited social risk. Low financial risks, now that we’ve put this prospectus in place, as Ivan has talked about. We have low execution risk, with great infrastructure at all three of our projects. And I think the same goes for Canada. If you really look at it, we enjoy the rule of law. There’s a clear permitting pathway for mineral development in every province and every territory. I think even more important is the fact that a lot of rural or remote communities have mining experience and knowledge, which provides comfort for them and ease of business for us. And again, I’ll use an Agnico Eagle reference. They’ve kept their business manageable and the strategy simple for decades, by focusing on grade and staying in stable jurisdictions, and Fury is no different.
Ivan: I just want to add one thing there Bill, on the high-grade and grade is king, as Mike really eloquently put together for us and why. High-grade is also variable. So, you’re going to see holes that come out. You’re going to see some narrow. You’re going to see some wide. You’re going to see a combination. What you can look at is companies like Kirkland Lake. It did phenomenal with its high-grade portfolio of projects. The profitability was astounding. Cisco, as well, in Quebec, not long ago. They were doing extremely well with their project, but it required a lot of drilling.
So, there’s a good chance we will require a lot of drilling, because we’re seeing a lot of high-grade. Or there’s a good chance we’re going to see variability through our drill results. As long as we’re hitting gold and as long as we’re hitting high-grade, then everything that we’ve set out to do with Eau Claire is going to be on full cylinders going forward. So, from my perspective, I think we’ve got a lot of it to start with and we’re going to have a lot of it to work with, in the coming months.
Bill: So, Ivan and Mike, whoever wants to answer this question, please jump in. Seven months ago, when we talked about Fury Gold and we were laying out the vision, we said, 80,000 meters over the next 18 months. 50,000, were going to be at Eau Claire. But Ivan, you’ve also said that Committee Bay is a gold bull market project, so you’re going to be sensitive to that. Are we going to take any of the meterage from like a Committee Bay and maybe put that more at Eau Claire? Has that shifted at all in how you guys are spending these dollars that you’ve earmarked for this?
Mike: Yeah, sure. Bill, I think it all depends on the results. I mean, as you said, we’ve just really gotten started at Eau Claire. And so, what we want to do is we want to come full circle on some of the concepts that we have there. Both, what is Snake Lake? What it will ultimately be. We’re not done with one kilometer down punch extension yet. What are we seeing out West? I mean, those results have to come out. That will resonate. There’s Homestake Ridge, which we haven’t discussed either. We put plans out for Homestake. We put plans out for Committee Bay. Those are subject to planning, going forward. The 80 to a 100,000 meters that we’ve kind of socialized and suggested that we’re going to do over the next 18 months is across the entire platform.
But of course, you do it one step at a time because we’re disciplined. We said, we want to know as early as possible, how big Eau Claire can get. Can we go from 80,000 ounces a year that was in the PEA to something in the ground that can support 150 to 200,000 ounces of production per year? That first junior producer category. Can Eau Claire, do that? I think it can. So, it’s a matter of, it’s a matter of just… It’s chapter one, chapter two, chapter three. Just move through it. And then we’ll make decisions, obviously, as a group, together with our board, as to where we want to allocate meterage. Where we want to allocate our budget.
Ivan: And actually a good point here, Bill to your comment about the shelf. And that allows us to raise money in June, from Homestake or end of may. And raise money in July for Committee Bay. We don’t need to raise all the money today, which normally would put a damper on the share price. And, fortunately, I think we have six or seven holes that we are really, really keen on the results from, to come out here in the next three to six weeks, as Mike’s put out.
And, if that works with us in currency, the goal would not be to take away from any project. It would be to add to each project. We’re going to be aggressive. And so, I like Mike’s answer because it’s very true. We’re going to be careful with what the results tell us what to do, on the projects we haven’t started drilling yet. Now the good news is we’ve done all the work, so they’re ready to drill. We’re in the position to do that. And that was the press release the other day, the corporate update. It was letting everybody know how busy we’ve been, how organized we really are, but we’re actually ready to go.
And so, a little bit of wind from the gold market and some great results out of Eau Claire puts us in a position to raise a lot more capital than we need to do the rest of these projects and maybe move that 80,000 number up, which would be my preference, just because I want to go for it on all levels. And I really, really believe in this gold market. And so, I think the other comment that as we’re talking here resonates with me, is I feel there’s been a big miss. There’s a massive miss.
And if you look at the results on Eau Claire today, if you look at the grade we’ve hit, if you look at the steady, there’s always been something new being added, incremental increases and whatnot. We are increasing our understanding. We are liking the project more than we first had it. And now, there’s a big regional picture that Mike alluded to, that we’re going to deal with this summer, but it really is a chance to be a real district. And I think for me, it’s something that’s performing internally and we hope to see it in the share price soon.
Bill: Mike, you’ve taken a multi-year, long-term perspective on building value, but speculators like myself, we get impatient and it becomes more, “What have you done for me lately?” So, could you just remind us what’s on tap over the next couple of months? What catalyst should we be looking for?
Mike: So, at Eau Claire, I think it’s Snake Lake and the 850 Zone drill results are going to be the big catalyst this spring, as we continue to execute and demonstrate the project’s growth potential. That’s just ongoing. That’s going to be coming. Assuming continued success and we’re all assuming it, you could expect another drill or two to go to Eau Claire, which is obviously going to dramatically increase our capabilities there and the rate of news coming out to the market. This summer at Eau Claire, we’re going to be developing eight new, regional target centers that Ivan just spoke about. Bring them all to the drill stage and set up to drill into fresh rock.
Any one of those targets could be that next new major bull discovered. So, that’s exciting. Another near-term catalyst for us could be the commencement of drilling Homestake. And we’ve talked about that already. We are very excited with our plans for the project and I would expect a great deal of value to be translated into share price. It would show people all of the good things that can happen when you’re drilling high-grade gold [inaudible 00:19:31]. So, a big year planned for investors in 2021, Bill.
Bill: Ivan, final thoughts?
Ivan: Just a tremendous amount of deep value. And just listening to Mike, talk about the projects and what’s on deck and coming, it reminds me of why I want to own a lot more of Fury, when appropriate. We have a lot of results pending, so I’m going to wait until they’re all out, but I just feel there’s a tremendous amount of deep value behind this robust exploration and all the torque you look for as a shareholder. And I think that’s going to be lived every month for the rest of the year. There’ll be some holes to look for that could really, really change the game for us considerably, to the upside. Love the direction the company’s headed. Feel it’s a tremendous opportunity right now. I don’t know the results yet. Obviously, want to know them as much as everybody listening, but there’s enough holes there that can give us a lot of different ways to win for investors. Not just here. There’ll be the ones at Homestake as well as at my favorite, Committee Bay, this summer. So, I look forward to an extremely active year. Company’s busy and you’re going to hear a lot from Mike and the team.
