Company Updates From Management – Fri 6 Mar, 2020

Auryn Resources – Updating the progress in Peru and the possibility of a spin-out company

Auryn Resources (TSX:AUG, NYSE:AUG) has been busy this year on its properties in Peru (Sombrero and Curibaya) and raising $15million to fund its exploration plans for the year.

Ivan Bebek, Execuative Chairman of Auryn joins me to recap the recent news from this year. We start with the DIA being obtained for the Sombrero Project and the new high grade targets at Curibaya. Next Ivan outlines the possibility of spinning out the Homestake and Committee Bay Projects into another company.

If you have any follow up questions for Ivan please email me at Fleck@kereport.com.7

Click here to read over the recent news releases at the Auryn website.


Comments:
  1. On March 7, 2020 at 12:49 am,
    Tim says:

    Mr. Bebek and his team have done an admirable job with exploration and trying to be judicious with capital in a difficult financial environment for junior mining. It has definitely also been a long slog for the patient but somewhat exasperated share base.

    Unfortunately this latest proposal seems too clever by half (or rather by 1/3s?). To me this proposal to split Auryn into three separate companies is the least appealing of the various options kicked around by Mr. Bebek during has various interviews ok KE report.
    Splitting the company into 3 would needlessly increase overhead and invite even more future dilution for the daughter companies. Management seems to have a high-school crush on Committee Bay and just cannot part with it because of all the emotional and financial capital invested so far. Cory can’t say it that bluntly but that is the impression I get from the interviews each time he asks about the plan for Committee Bay.
    At some point the price is what it is – if it were worth more at the present time, then a larger miner would step in with an offer. The fact that nobody has done so needs to be acknowledged as the current reality. If Mr. Bebek truly believes that Committee Bay is a potential game changer, why not sell it for whatever the clearing price would be but retain a NSR to preserve optionality? From the interview yesterday, he seems to think that Sombrero has the greatest potential of the three projects. So how about simplify the company and make a decisive move. My proposal would be:

    1. Sell Committee Bay and retain an NSR (yes this means you will not what management considers fair value, but just like art, the price is what the buyer is willing to pay today)
    2. Use part of the proceeds to undue the dilution of the past several years
    3. Use the remaining proceeds to accelerate the exploration program in Peru, bring in multiple rigs as soon as permitting is complete, and signaling that there will be no further dilution in the near to medium term
    4. Congratulations, you are now a Peru-focused mining company with two potential game-changing Tier 1 deposits and a maintenance-free, overhead-free, attractive asset in the form of the Committee Bay NSR.
    5. Borrow a page from Lion One and build a local world-class assay facility to ensure timely processing of results and enhance local relationships and economic development in a win/win scenario.