(Kitco News) - Fury Gold Mines, a junior explorer focused on gold projects in Quebec and Nunavut, Canada, has secured a C$4.3 million investment from major gold producer Agnico Eagle Mines.
The financing increases Agnico's stake in Fury from 2.3% to 6.3%, with the potential to reach 9.9% if Agnico exercises warrants it holds.
This latest investment highlights Agnico's continued support for Fury and its strategic interest in the Arctic region.
Fury CEO Tim Clark told Kitco Mining that his relationship with Agnico's executive team dates back 25 years. Clark characterized the C$4 million financing as hard-earned, signifying Agnico's rigorous approach to valuing investments. He added, "It says volumes about the way Agnico values... their investments. They have to technically be sound."
The process involved extensive work with Agnico's geology and corporate development teams, with Clark viewing the investment as validation that Fury is "Acting in good faith for investors."
Agnico's philosophy for junior investments, according to Clark, emphasizes spending money wisely and being strategic.
A significant driver behind Agnico's interest appears to be the potential in Canada's Arctic territory of Nunavut. Agnico's leadership has historically viewed Nunavut as a key area for future mining potential due to its largely undiscovered resources.
With Agnico developing its Hope Bay project in the region, Fury's Committee Bay project fits into a "pipeline position" crucial for larger companies to secure future potential.
Fury's Committee Bay property is described as a 300-kilometer greenstone belt located in the Arctic. It is a "huge property" that remains "very unexplored." The project holds a 2023 resource at the Three Bluffs deposit of approximately 1.3 million ounces grading 7.8 grams per tonne across all categories.
A key development generating excitement for both Fury and Agnico is recent drilling that intersected gold mineralization in a shear zone, shifting the focus from historical hits typically found in iron formations.
"What we hit was in a shear zone, which has actually changed the way we've looked at this. The potential upside," Clark explained. He noted that shear zones can extend for miles, potentially unlocking significant value. Agnico "agreed and that it was worth putting the money into developing it" based on these findings.
The majority of the new funding, C$3.9 million, is specifically allocated for exploration at Committee Bay. The planned work program will primarily focus on testing the potential of these shear zones by stepping out from previous drill hits. "That's the main focus to go up there and, and circle around and find out what's really there," Clark said.
Additionally, Fury plans to drill-test high-grade surface samples found last summer, some grading up to 30 grams per tonne, in unexplored areas to demonstrate the property's broader exploration potential beyond the existing resource.
Producers like Agnico are not just seeking a resource but want to see potential for significant future discoveries, which Clark describes as the need for "big ounces up there" in the Arctic.
Operating in the Arctic presents logistical and financial challenges, which is why few juniors operate there. However, Fury benefits from existing infrastructure, including drills, a camp, and an airstrip, built from historical spending. This allows Fury to drill for less than C$700 per meter, significantly lower than the C$1,000 to C$1,200 per meter typical for most juniors and majors.
This efficiency was noted and appreciated by Agnico's senior geologist.
The C$3.9 million is expected to fund approximately 5,000 meters of drilling this year, which will "test a lot of our theories." Part of the funding will also be used to stage fuel for next summer's program, reflecting a strategic, forward-looking approach.
Clark views the Committee Bay program as a "big swing" for Fury, noting that validation from a major like Agnico is a significant endorsement. Despite the Committee Bay asset receiving relatively little market valuation attention previously, its potential, combined with the strategic partnership with Agnico, positions it as a key catalyst for the company.
Beyond the Agnico funding, Fury also holds a valuable stake in Dolly Varden Silver worth C$40-50 million, providing additional financial flexibility.
Fury plans to stage its exploration projects throughout the year, starting with Quebec and then moving to Nunavut. Clark considers the Nunavut program a major catalyst for Fury this year.
As a reminder, Fury Gold Mines trades on the NYSE American and TSX under the ticker FURY.