Categories: Precious Metals
Topics: General Precious Metals

Fury Gold Mines (TSX: FURY)(NYSE: FURY) CEO Tim Clark on Capitalizing on a Rising Gold Market via Multiple Fully-Funded Gold Exploration Projects in Eastern Canada

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO of Fury Gold Mines — Mr. Tim Clark. Tim, it is great to have you on. How are you today, sir?

Tim Clark: I'm great. Gold is up today and so we're feeling optimistic as always. And it's good to be here to share the story.

Gerardo Del Real: Well, let's get into the story. It's really interesting to me. You and I had a couple of conversations here over the past several months off-air about the focus on being a Canadian focused high-grade gold explorer. And I absolutely want to get into the assets. I want to get into the team. I want to get into your background a little bit.

But I want to start by mentioning that you're actually a pretty darn good gold and silver hedge. And so, can you speak to that briefly? And then, we'll chat a bit about your background and the team and the catalysts that are coming up.

Tim Clark: Sure, so when I first got here, I started on the board about two years ago and we had multiple assets. You don't typically find a junior company with as large a land package and as many projects. 

I know Agnico started as a single mine stock story. And I was pleasantly surprised that we had, basically, three if not four assets. One of which was Homestake Ridge, which is basically a silver potential mine in British Columbia. And I thought, at the time, that we were trying to be too much and too many things. And we were spending money up in Nunavut up in the Arctic, Homestake Ridge in British Columbia, plus James Bay in Quebec. And for a smaller company to try and finance that during a tough time in the market when it was hard to raise money seemed a little optimistic.

And so, when I took over as CEO, one of the things that I thought was important was, really, to streamline and simplify our story and not try to be all things to all people; not to be a development company but, really, be the best we could be at exploration and focusing on an area that I thought was really supportive and prolific for exploration, which was in Quebec.

We loved the Homestake Ridge asset… but they had a great group at Dolly Varden. And they wanted that asset to go along with their package. And it has really worked out great. And we ended up taking about a third of the company in stock and we got C$5 million in cash. That stock, I think at the time, we had about C$50 million worth. It's now up to C$64 million, and we've already taken out C$7 million. We've sold off some of it; we took out C$7 million last September to help us with our financing.

And so we're up on that position, and we think it's going to get better. The whole area is surrounded by Hecla Mining, and I think it's potentially a takeout target there; if not them, someone else. 

It's very hard to find good silver resources now. They’re just not out there that have not been discovered. And I think these guys are on it. And I think the team over at Dolly Varden is going to do a phenomenal job promoting the story. And they've got a ton of money in their treasury right now, and they've got a pretty aggressive drill program for this summer.

So we own 23.5% of it. It's equivalent to C$64 million of our equity valuation. And when you add that in with the C$16 million in cash we have right now in our treasury, that's about C$80 million in cash and cash equivalent. And our market cap is only C$103 million today. 

So you get quite a bit of land package and exploration plus 2.5 million ounces of resource already between Nunavut and our James Bay asset for C$23 million bucks. It's outrageously cheap. And that's why I think that this is a unique opportunity in the junior space.

The reason why I came to Fury was because I saw the pathway to basically monetize that silver asset and leverage it up and make sure that this company was well financed going forward. And that's one of two most important things you need as a junior. One is a treasury, and two is a management team that's going to be able to effectively deploy that in a way that you can have development of a resource or new discoveries… and that's where we are.

Gerardo Del Real: So just to be clear, nearly 80% of your valuation is backed and anchored by cash and securities, Dolly Varden securities; is that accurate?

Tim Clark: That is accurate. Yeah, it's kinda crazy. By the end of the day, we could end up getting a lot more out of that Dolly Varden… so we're crossing our fingers that they do really well. 

Gerardo Del Real: Yeah, I was going to interject and just say it's likely because I'm familiar with Sean Khunkhun… I'm familiar with the team, familiar with the asset, and they're doing a phenomenal and aggressive job of growing that. So, I think, in the gold and silver environment that we're in, it's more likely than not that that value is going to continue to increase. And I think it'll increase at a pretty rapid pace.

I complimented you off-air on your timing and on us helping get the story out because of the precious metals market that we're in and the one I feel we're heading into. I think we're going to see new all-time highs on the gold side of it. And so, I do want to touch on, obviously, the 2.5 million ounces of gold resource that you have; you mentioned that. Can we talk about the asset base a little bit?

Tim Clark: Sure, we've got 1.3 million ounces in our main core asset, which is in James Bay. It's the Eau Claire Mine. And this is a very unexplored area of the world up in Quebec. Quebec is probably one of the top two places in the world to mine with the support from the government. You get a lot of flow through participation there, which helps us raise a lot more money for the treasury.

And the other part of it is we're literally 50 km south of Newmont and their Éléonore Mine. So there's a big player up there. There's potential for consolidation. We own a joint venture that's in between with Newmont; we are the operator but it's effectively 50/50. They have a mill up there that needs feed. So they are looking and interested in developing more resources to go up there.

The big plus of James Bay — and I think this is why a lot of the senior names could be looking at us at some point — is that this is where the James Bay hydropower is coming out of. So there's a huge infrastructure of not only roads but hydroelectric power, which is what a lot of these companies want in terms of their ESG compliance. 

And so, you can drive a truck right up to the back of our camp to get to our satellite project, which is called Percival. There's a winter road you can get through there. And so that's really exciting. 

And then, part of that area — and we don't have a picture of it — but it's 55,000 hectares up there that we have. It's a tremendous amount of land. I was up there and flew over on a helicopter last year… and you fly, and you fly, and you fly, and it's all you can see. And there's some water up there but it's pretty open and unexplored. 

So I think the exciting part of it, to me, and the blue sky to the story that investors should pay attention to is that we did spend some money the last couple of years doing some chem and structural analysis and geophysical analysis on the broader property that we hadn't done before.

And along our southern half of the property really covers a third of the Canard deformation zone, which runs for 100 km, so we own about 30 km of it. And we've developed these anomalies. We've got 14, 15, 16 anomalies that we've identified that we want to go back and look at that run all within a mile of the Canard defamation zone.

And they have the same signature; geochem, geophysical, and structural that our main core asset of Eau Claire as well as our satellite Percival have. And if we can advance something there and show that there's a trend line along the Canard defamation zone, this is what the big guys want because they can potentially open up a lot of ounces.

The other asset we have is up in Nunavut. It's about 150 km northeast of where Agnico Eagle has their mines; Meadowbank and Amaruq. And we've got 1.3 million ounces up there too. We've got, I believe, 270,000 hectares up there. It's 300 km, really, of exploration that we've covered and worked in up there. So we have a big land package. It's where the big boys really want to play. We haven't drilled there the last couple years but we had a great strike up on our camp area.

It was outside the typical drilling program that we had and we came on to what's called shear zones. Normally, you look for iron formations but we hit a shear zone and it doesn't really match up with what we were modeling. So we want to go back and explore that. 

It's exciting because these shear zones can go on for miles. The difference up there is it's expensive and you need a much bigger resource to entice a major to get up and buy you. But it is where, if you find something legit, you can really take the stock price up massively because there's a lot of potential… and that's the hope there.

We just haven't gone back because we think it's probably smarter to go up there as a joint venture with a bigger player. We find that we've got a ton to explore in the James Bay project area. And so we're trying to focus and use our dollars most effectively near term to keep advancing that project first. 

But the Nunavut project, I think, there's C$60 million already invested there. And when you even back out what that potentially is worth on our C$23 million valuation, as we talked about earlier, it's just another area of where there's value that should come to Fury at some point.

I think it's important to mention the joint venture, too, with Newmont. You don't get to play with the top player in mining too often and have Newmont as a 50/50 partner in a joint venture with targets in there that we think are exciting. We're trying to be creative. We want to bring forward those projects. So we're working on that. We've got Agnico up near us in Nunavut, and we’ve got Hecla surrounding our Dolly Varden ownership property.

And we've been able to get another major into our stock. Newmont owns 6%. But we have another major that's bought into a percentage of our stock and invested with us in the past year that’s taken an interest in us. I'm not allowed to talk about details but that's a really positive thing for the company. And then, we also have a major US institutional owner who owns 7.5% of the company that's also come in the past year. So we're moving that direction.

Gerardo Del Real: You have a very, very strong Quebec based technical team. James Bay is emerging as a mining center and attracting a lot of capital in the precious metals space and in the lithium space. Your infrastructure advantage is top notch. You have 2.5 million ounces of gold. You have the anchor in Dolly Varden securities. What comes next, Tim?

Tim Clark: Great question. I think we've proven to the market that we can raise money even in the worst of times. And we raised quite a bit last year and we did another C$8.5 million this year at a great price. We've done it consistently. So I'm not worried about raising money. 

What I want to do is find some gold. So we're actively drilling right now. Because we raised money in February of this year, we had the package that we could really start earlier. So we've started drilling two months earlier than we did last year. We're hoping that assay results come out by the end of May/beginning of June… and we've got our first hole already in the bag. So it's a quick jump.

I think that a lot of the retail are going to look at the drill results sort of near-term. But I will tell you that the institutional owners, the way they look at us is longer-term. And what they focus on is less on the drilling and more on the strategy.

And one of the strategies that I think we've done really well is to keep developing our relationships with our bigger partners; the producers. Geographically, if you consider or believe that gold is going to go up, then my thesis is that there's a lot of pent-up consolidation, particularly in Canada because of the political stability.

Throughout the world, it's becoming more volatile, not less. It's becoming more risky, not less. More expensive. And if you can own a big package as these giant companies should, they're going to swallow up more in Canada. And you’ve watched B2Gold do it, Newmont, and Newcrest's potential thing.

So there's going to be some movement. And our packages sit right along these majors, which I talked about earlier. And I think furthering those relationships and developing and bringing our resources forward is important; looking for new discoveries is important. 

But at the same time, there are opportunities out there. And there are a lot of companies that haven't been as good at raising money as we have or haven't been as efficient at keeping the share count down. And they're in trouble. There are companies out there that were a billion dollars a year ago, and now they're less than C$150 million.

And I think that we've been approached with ideas, and so we're keeping an open concept… a sort of practical look at the industry. And if there's something that makes sense for us to work with and/or purchase — or maybe we sell something that we can get good value out of — we're always open to that. 

As you talk about the price of gold, I'm a believer in that, and I think things are going to move here. And I think they're going to look for companies that can execute to manage some of that stuff. So I don't know… we'll see what happens.

We've got the advantage of the Dolly Varden position. If that gets taken out, maybe we get a hundred million bucks out of that, and maybe we deploy it, and maybe we dividend it out. But there are opportunities, is my point. 

And what I'm trying to do as a company is not just go out there and create a spin of a discovery and just sell it off. I think that that could happen if we had something here because we're cheap. And I think there are a number of buyers of Fury in the near term. 

But in the meantime, I also want to build a company, and I think we have the capacity to do it. We certainly have talented people, especially working on the ground in Quebec. And our geology team is bar-none. They are as good as any major in terms of quality of people. And so it's going to be an interesting run. 

What do you think in terms of things that are going to be happening up in Canada?

Gerardo Del Real: No, look, I'm a big, big fan of James Bay. I'm a big fan of that region and the government support. I love seeing the amount of capital that's come into the area. 

I think you're going to see not just mining companies but chemical companies and automakers and a lot of other multi-billion dollar companies moving into the region because of the infrastructure advantage.

And listen, I think Fury has positioned itself beautifully for gold exposure, silver exposure, potential M&A. You're drilling. You have assays pending. Gold is at US$2,025 right now. Silver looks to be flirting with the US$26 level. I think your timing is excellent. 

Tim, this has been fun. Anything else to add to that?

Tim Clark: No, I just think that, from a junior perspective, I don't think there's any junior company that’s better financed than us… and that's going to give us an advantage. And we've restructured the company and taken out 30% of the cost in the last year.

I'm excited because I think there's a lot upside and it's going to be an exciting year to watch. I think gold is going to be good for gold AND silver.

Gerardo Del Real: I couldn't agree more. Tim, I'm looking forward to having you back on. A lot of catalysts. A busy 2023. It's been a pleasure!

Tim Clark: Thank you so much! It was great talking. Take care.

Gerardo Del Real: Let's do it again soon. Bye now.