Company News – Mon 9 Jan, 2017

Auryn Resources to receive investment from Goldcorp

Some more positive news out of Auryn Resources this morning. Goldcorp will be investing in Auryn taking over $35 million of the total $41 million raise. This will bring Goldcorp’s the post financing ownership up to 12.5%.

There are some points that I think are important to note regarding this financing. It is always a great sign in my eyes when a major company ups its ownership stake in an exploration company. Auryn management has always stated the goal was to build a major’s exploration portfolio and clearly Goldcorp thinks they have a chance of doing this. This is why Goldcorp wants to be a part of it early. Also the financing is priced at $3.67 per share. This is a 20% premium on today’s opening Auryn share price of $3.05. Finally the Company will now have plenty of money to fund its 55,000 drill program planed for this year.

We will be chatting with Ivan Bebek later this week for a further explanation of what this investment from Goldcorp means for the Company. If you have any questions of points you would like us to discuss please post them in the comment section or email me directly – Fleck[at]kereport.com.

For more information click here and watch our webinar from the beginning of last month.

Here is the news release…

Auryn Resources Inc. has entered into an investment agreement with Goldcorp Inc. for a strategic equity placement whereby Goldcorp will purchase directly and indirectly in two tranches 9,542,402 common shares of Auryn for $3.67 per share. After giving effect to the placement, Goldcorp will own 12.5 per cent of Auryn’s outstanding common shares.

In addition, Auryn and Goldcorp have entered into an Investor Rights and Obligations Agreement whereby, as long as Goldcorp maintains a 5% or greater equity ownership interest in Auryn:

  • Goldcorp will have the right to participate in future Auryn equity issues in the amount necessary to maintain up to a 12.5% interest;
  • Goldcorp will have a right to match certain non-equity financings; and
  • If Goldcorp chooses to sell more than 2% of Auryn’s shares, Auryn will have the right to designate buyers and Goldcorp will vote its shares to elect the Auryn recommended director nominees.

An aggregate of 4,590,818 common shares will be issued to third party investors through a brokered private placement offering conducted by a syndicate of agents led by Beacon Securities Limited as flow-through shares at a price C$5.01 per flow-through share, the terms of which provide that Auryn will renounce the income tax benefits of the Canadian Exploration Expense related to the expenditure of the proceeds of those shares to those third party investors. Accordingly, gross proceeds to be received by Auryn will be C$41,158,911.46 consisting of C$18,172,313.28 in direct share subscriptions and C$22,999,998.19 in flow-through dollars through third parties. Goldcorp’s cost of the 9,542,402 common shares will be C$35,020,615.34.

Shawn Wallace, President and CEO, commented that, “We are very pleased to have secured an important investment with an industry leader such as Goldcorp, on favourable terms that minimizes dilution to our shareholders. Auryn is now fully funded to complete one of the most extensive, globally significant exploration programs in 2017. The program will include a planned 55,000 meters of exploration drilling across six projects in Canada and Peru and expect to make a number of advances that could potentially contribute to the realization of multiple major gold discoveries.”

The net proceeds of the Placement will be used to fund exploration at Auryn’s properties, and for general corporate purposes.

The closing of the Placement is expected to occur during January 2017 and is subject to the completion of formal documentation and receipt of Toronto Stock Exchange acceptance. All securities issued in connection with the Placement will be subject to a four-month hold period.

Auryn’s financial advisor with respect to the strategic investment was Minvisory Corp.

The securities offered have not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor in any other jurisdiction.

Upon completion of the investment, Goldcorp will have acquired ownership of 9,542,402 common shares of Auryn at a subscription price of C$3.67 per common share for a total purchase price of C$35,020,615.34. The common shares acquired by Goldcorp represent 12.5% of the issued and outstanding common shares of Auryn. Prior to this acquisition Goldcorp did not own any securities of Auryn. Goldcorp acquired the common shares for investment purposes. Goldcorp will evaluate its investment in Auryn from time to time and may, based on such evaluation, market conditions and other circumstances, increase or decrease shareholdings as circumstances require. The exemption relied on for the acquisition of the common shares is Section 2.10 of National Instrument 45-106 – Prospectus and Registration Exemptions. A copy of the Early Warning report filed by Goldcorp in connection with the acquisition will be available on Auryn’s SEDAR profile. Goldcorp’s head office is located at Suite 3400 – 666 Burrard St. Vancouver, BC, V6C 2X8.

About Auryn

Auryn Resources is a technically driven junior mining exploration company focused on delivering shareholder value through project acquisition and development. The Company’s management team is highly experienced with an impressive track record of success and has assembled an extensive technical team as well as a premier gold exploration portfolio. Auryn is focused on scalable high-grade gold deposits in established mining jurisdictions, which include the Committee Bay gold project located in Nunavut, the Homestake Ridge gold project in British Columbia and a portfolio of gold projects in southern Peru, through Corisur Peru SAC.

We seek Safe Harbor.

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Comments:
  1. On January 9, 2017 at 8:25 am,
    CFS says:

    Great!

    • On January 9, 2017 at 8:32 am,
      Wolfster says:

      Indeed. Ex Replied to you on weekends section in case you missed it

      • On January 9, 2017 at 4:05 pm,
        Excelsior says:

        Thanks Wolfster. I saw it and mentioned that this news on Auryn was great, and that I also did add some Tinka last week for more Zinc/Lead exposure, (along with some Constantine Metal for Copper/Zinc/Gold/Silver). I added some Sabina Gold & Silver today, because they are getting very close to receiving their decision on permitting, so it will either be Party Time or Party Foul, but I projecting they get the permit as this will be the 3rd time they’ve gone back to provide more info, and there are many First Nations and local community behind the project being developed.

        Ever Upward!

        • On January 9, 2017 at 5:05 pm,
          Excelsior says:

          “We had hoped to receive a decision from INAC before the end of the year,” said Bruce McLeod, President & CEO “We have been working diligently with all appropriate parties in the interim towards this end. However, despite these efforts it is likely that we will not receive word from the Minister’s office until early in 2017.Although this is disappointing to our shareholders, we appreciate INAC’s careful consideration of the NIRB Report.We have continued to work with parties to bolster our plans and remain confident that there are no issues on the Project that cannot be addressed. We also appreciate the strong support we have received from Kitikmeot stakeholders and responsible parties: support that I believe is unprecedented for a mining project in Nunavut.”

          http://www.sabinagoldsilver.com/news/sabina-gold-and-silver-updates-on-minister-of-indigenous-and-northern-affairs-canada-decision-on-the-back-river-gold-project

  2. On January 9, 2017 at 8:33 am,
    CFS says:

    Off Topic:

    Some Bio/pharma stock buying again today.
    Here’s one I mentioned last week:
    http://stockcharts.com/h-sc/ui?s=ETRM
    (ARIA is another)

  3. On January 9, 2017 at 8:46 am,
    Wolfster says:

    Saw something on bnn during holidays about some bio plays. Will look for it tonight and post. If I can’t find did write down the picks. All late stage plays that are potentially buyout candidates

  4. On January 9, 2017 at 10:01 am,
    Archdeacon (!) Andrew says:

    Auryn: Nice pop to 16.72% – Bob Moriarty advised us to get ahead before the new year.

  5. On January 9, 2017 at 10:26 am,
    Robert Moriarty says:

    Auryn is a long term great stock. They have management bandwidth and three projects with giant potential. Certainly Goldcorp got it and bought in cheap as any reasonably intelligent investor would have.

    Matthew, Excelsior and I were all beating the drums since the fall as to the opportunity we saw clearly. The company went from $1.01 at the beginning of 2016, ran up to $4.20 in July and corrected about 50%. Now it’s up 50% in about six weeks. And this isn’t the high for 2017.

    There are dozens of stocks that did the same thing. It’s a market, it goes up, it goes down. For those who owned it at $1.01, it would be a brilliant move to sell part at above $4.

    If you won’t take a profit when you have it, you are going to take a loss when you have to.

    Buy what is cheap and sell what is dear. That’s all you need to know to profit. Everything else is noise.

    • On January 9, 2017 at 4:28 pm,
      Excelsior says:

      Agreed Bob M. Great management team, solid assets, and a nice longer term potential with Auryn, but no shame in pulling partial profits on a nice run up in share-price in any company. It may stay levitated a while longer, but there are no shortage of opportunities in the resource sector to deploy the gains into. If the company does pull back in a big way, then it can always be bought back.

      There were a number of stocks I held that had great moves in the 1st half of 2016, but that didn’t stop me trimming last summer in July & August when they were getting really overbought and ahead of themselves. It didn’t hurt my feelings to reposition in many of those same companies in December when they were trading 30-60% lower than their recent summer peaks. 🙂

      __________________________________________________________________________

      $BPGDM hit 100 last summer which was way overbought, and those that did not trim, watched their gains evaporate away as most companies fell back down for the balance of the year.

      When $BPGDM hit a double bottom low again this last Nov/Dec, then that gave me the confidence to get back in the water and reposition in miners much heavier in Dec through the post holiday tax-loss selling season. Things don’t stay that oversold for long.

      We mentioned on here a few times that it was very similar to January of 2016, or the Nov/Dec oversold situation in late 2014, right before that Q1 rally.

      http://stockcharts.com/h-sc/ui?s=%24BPGDM&p=D&yr=5&mn=0&dy=0&id=p20600169876

      • On January 9, 2017 at 4:54 pm,
        Excelsior says:

        For clarity that $BPGDM is the Gold Miners Bullish Percentage Index, and it is a breadth indicator that provides a fairly good signal on when the miners are overbought or over sold.

  6. On January 9, 2017 at 11:15 am,
    Archdeacon (!) Andrew says:

    Cheers Bob.