Fury Gold Mines Ltd (TSE:FURY) (NYSEAMERICAN:FURY), a new Canadian explorer, which was formed when Auryn Resources Inc reorganized and merged with Eastmain Resources Inc, has earned a ‘Buy’ rating from Roth Capital markets.
The firm converted its coverage of Auryn into coverage of Fury Gold following the transaction and tagged the company with an inaugural price target of C$2.70, implying 41% upside on Thursday’s closing price of C$1.91.
“While technically Fury Gold is a name and ticker change from its predecessor company Auryn Resources, we believe the significant changes to the company make a comparison to our prior estimates unjustified,” Roth wrote. “Instead, we have completed a sum of the parts analysis on Fury’s assets and are issuing an initial price target of $2.70 and a Buy rating.”
The move saw Auryn spin out two private companies for its Peruvian assets, undergo a 7:10 reverse stock split, acquire Eastmain and subsequently complete a C$23 million equity offering.
“We assign a value of $49.8 million to [Fury’s] Committee Bay [in Nunavut] based on a valuation of $40 per ounce of resource,” the firm wrote. “We assign a value of $75 million to Homestake Ridge [in British Columbia], or approximately 43% of the project’s [net present value] in its latest financial study.
“We assign a value of $125 million to Eau Claire [in Quebec], or approximately 41% of its most recent financial study NPV. We then add $20 million for Gibson MacQuoid, $23.8 million for cash as of Q2 2020 plus the recently completed equity funding, and $40 million for exploration potential in the next 24 months. Thus, we arrive at a total value of $333.5 million or $2.65 per fully diluted share. We round this up to reach our $2.70 price target.”
Fury, which has a footprint in three prolific mining regions, has said it will aggressively grow its multi-million-ounce gold platform through project development and potential new discoveries.
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Published at Fri, 16 Oct 2020 15:17:00 +0000-Fury Gold Mines receives ‘Buy’ rating from Roth following Auryn-Eastmain merger