EX-99.1 2 fury_ex991.htm EX-99.1 fury_ex991.htm

EXHIBIT 99.1

 

 

(An exploration company)

 

CONDENSED INTERIM

CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

 

 

 

 

Fury Gold Mines Limited

 

 

 

 

 

 

 

 

Condensed Interim Consolidated Statements of Financial Position

(Expressed in thousands of Canadian dollars – Unaudited)

 

 

 

 

At September 30

 

 

At December 31

 

 

 

Note

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 $ 10,088

 

 

 $ 10,309

 

Marketable securities

 

 

3

 

 

 

 1,673

 

 

 

 582

 

Accounts receivable

 

 

 

 

 

 

 782

 

 

 

 369

 

Prepaid expenses and deposits

 

 

 

 

 

 

 841

 

 

 

 602

 

 

 

 

 

 

 

 

 13,384

 

 

 

 11,862

 

Non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Restricted cash

 

 

 

 

 

 

 144

 

 

 

 144

 

Prepaid expenses and deposits

 

 

 

 

 

 

 99

 

 

 

 42

 

Property and equipment

 

 

 

 

 

 

 673

 

 

 

 931

 

Mineral interests

 

 

4

 

 

 

 144,140

 

 

 

 145,190

 

Investments in associates

 

 

5

 

 

 

 37,096

 

 

 

 42,430

 

 

 

 

 

 

 

 

 182,152

 

 

 

 188,737

 

Total assets

 

 

 

 

 

 $ 195,536

 

 

 $ 200,599

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

 

 

 

 

 $ 2,351

 

 

 $ 1,148

 

Lease liability

 

 

 

 

 

 

 154

 

 

 

 160

 

Flow-through share premium liability

 

 

6

 

 

 

 1,667

 

 

 

 -

 

 

 

 

 

 

 

 

 4,172

 

 

 

 1,308

 

Non-current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Lease liability

 

 

 

 

 

 

 109

 

 

 

 227

 

Provision for site reclamation and closure

 

 

 

 

 

 

 4,005

 

 

 

 4,271

 

Total liabilities

 

 

 

 

 

 $ 8,286

 

 

 $ 5,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

8

 

 

 $ 310,277

 

 

 $ 306,328

 

Share option and warrant reserve

 

 

9

 

 

 

 21,426

 

 

 

 20,309

 

Accumulated other comprehensive loss

 

 

 

 

 

 

 (6 )

 

 

 (3 )

Deficit

 

 

 

 

 

 

 (144,447 )

 

 

 (131,841 )

Total equity

 

 

 

 

 

 $ 187,250

 

 

 $ 194,793

 

Total liabilities and equity

 

 

 

 

 

 $ 195,536

 

 

 $ 200,599

 

 

Commitments (notes 4, 5(c), 13)

 

Approved on behalf of the Board of Directors:

 

“Forrester A. Clark”

 

“Steve Cook”

 

Chief Executive Officer

 

Director

 

 

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Fury Gold Mines Limited

1

 

 

 

Fury Gold Mines Limited

Condensed Interim Consolidated Statements of Loss (Earnings) and Comprehensive Loss (Income)

(Expressed in thousands of Canadian dollars, except per share amounts – Unaudited)

 

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

 Note

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and evaluation

 

 

7

 

 

 $ 3,839

 

 

 $ 3,785

 

 

 $ 6,528

 

 

 $ 7,871

 

Fees, salaries, and other employee benefits

 

 

 

 

 

 

 445

 

 

 

 560

 

 

 

 1,842

 

 

 

 2,302

 

Insurance

 

 

 

 

 

 

 155

 

 

 

 174

 

 

 

 493

 

 

 

 560

 

Legal and professional

 

 

 

 

 

 

 365

 

 

 

 88

 

 

 

 620

 

 

 

 702

 

Marketing and investor relations

 

 

 

 

 

 

 168

 

 

 

 162

 

 

 

 555

 

 

 

 718

 

Office and administration

 

 

 

 

 

 

 85

 

 

 

 74

 

 

 

 285

 

 

 

 285

 

Regulatory and compliance

 

 

 

 

 

 

 56

 

 

 

 31

 

 

 

 235

 

 

 

 187

 

 

 

 

 

 

 

 

 5,113

 

 

 

 4,874

 

 

 

 10,558

 

 

 

 12,625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expense (income), net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accretion of provision for site reclamation and closure

 

 

 

 

 

 

 43

 

 

 

 27

 

 

 

 109

 

 

 

 67

 

Amortization of flow-through share premium

 

 

6

 

 

 

 (1,609 )

 

 

 (1,476 )

 

 

 (2,222 )

 

 

 (2,890 )

Foreign exchange loss

 

 

 

 

 

 

 2

 

 

 

 4

 

 

 

 8

 

 

 

 9

 

Impairment expense

 

 

 

 

 

 

 -

 

 

 

 5,492

 

 

 

 -

 

 

 

 5,492

 

Interest expense

 

 

 

 

 

 

 13

 

 

 

 25

 

 

 

 50

 

 

 

 94

 

Interest income

 

 

 

 

 

 

 (162 )

 

 

 (67 )

 

 

 (472 )

 

 

 (116 )

Net gain on disposition of mineral interests

 

 

4

 

 

 

 (468 )

 

 

 -

 

 

 

 (468 )

 

 

 (48,390 )

Net loss from associates

 

 

5

 

 

 

 3,200

 

 

 

 3,328

 

 

 

 5,334

 

 

 

 5,218

 

Realized net (gain) loss on marketable securities

 

 

3

 

 

 

 (231 )

 

 

 -

 

 

 

 (231 )

 

 

 -

 

Unrealized net (gain) loss on marketable securities

 

 

3

 

 

 

 749

 

 

 

 73

 

 

 

 (78 )

 

 

 299

 

 

 

 

 

 

 

 

 1,537

 

 

 

 7,406

 

 

 

 2,030

 

 

 

 (40,217 )

Loss (earnings) before taxes

 

 

 

 

 

 

 6,650

 

 

 

 12,280

 

 

 

 12,588

 

 

 

 (27,592 )

Income tax expense (recovery)

 

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 18

 

 

 

 (187 )

Net loss (earnings)

 

 

 

 

 

 

 6,650

 

 

 

 12,280

 

 

 

 12,606

 

 

 

 (27,779 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss (income), net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized currency (gain) loss on translation of foreign operations

 

 

 

 

 

 

 (1 )

 

 

 2

 

 

 

 3

 

 

 

 2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss (income)

 

 

 

 

 

 $ 6,649

 

 

 $ 12,282

 

 

 $ 12,609

 

 

 $ (27,777 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (earnings) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic loss (earnings) per share

 

 

12

 

 

 $ 0.05

 

 

 $ 0.09

 

 

 $ 0.09

 

 

 $ (0.21 )

Diluted loss (earnings) per share

 

 

12

 

 

 $ 0.05

 

 

 $ 0.09

 

 

 $ 0.09

 

 

 $ (0.20 )

 

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Fury Gold Mines Limited

2

 

 

 

Fury Gold Mines Limited

 

Condensed Interim Consolidated Statements of Equity

 

(Expressed in thousands of Canadian dollars, except share amounts – Unaudited)

 

 

 

Number of common shares

 

 

Share capital

 

 

Share option and warrant reserve

 

 

Accumulated other comprehensive loss

 

 

Deficit

 

 

Total

 

Balance at December 31, 2021

 

 

 125,720,950

 

 

 $ 295,464

 

 

 $ 18,640

 

 

 $ -

 

 

 $ (156,749 )

 

 $ 157,355

 

Total comprehensive income

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (2 )

 

 

 27,779

 

 

 

 27,777

 

Shares issued pursuant to offering, net of share issue costs

 

 

 13,750,000

 

 

 

 10,864

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 10,864

 

Share-based compensation

 

 

 -

 

 

 

 -

 

 

 

 1,455

 

 

 

 -

 

 

 

 -

 

 

 

 1,455

 

Balance at September 30, 2022

 

 

 139,470,950

 

 

 $ 306,328

 

 

 $ 20,095

 

 

 

 (2 )

 

 $ (128,970 )

 

 $ 197,451

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2022

 

 

 139,470,950

 

 

 $ 306,328

 

 

 $ 20,309

 

 

 

 (3 )

 

 $ (131,841 )

 

 $ 194,793

 

Total comprehensive loss

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (3 )

 

 

 (12,606 )

 

 

 (12,609 )

Shares issued pursuant to offering, net of share issue costs and flow-through premium liability (note 8)

 

 

 6,076,500

 

 

 

 3,949

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 3,949

 

Share-based compensation (note 9(a))

 

 

 -

 

 

 

 -

 

 

 

 1,117

 

 

 

 -

 

 

 

 -

 

 

 

 1,117

 

Balance at September 30, 2023

 

 

 145,547,450

 

 

 $ 310,277

 

 

 $ 21,426

 

 

 

 (6 )

 

 $ (144,447 )

 

 $ 187,250

 

 

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Fury Gold Mines Limited

3

 

 

 

Fury Gold Mines Limited

 

 

 

 

 

 

 

 

 

 

 

 

Condensed Interim Consolidated Statements of Cash Flows

 

 

 

 

(Expressed in thousands of Canadian dollars – Unaudited)

 

 

 

 

Three months ended September 30

 

 

Nine months ended

September 30

 

 

 

Note

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) earnings

 

 

 

 

 $ (6,650 )

 

 $ (12,280 )

 

 $ (12,606 )

 

 $ 27,779

 

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 (162 )

 

 

 (67 )

 

 

 (472 )

 

 

 (116 )

Items not involving cash:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain on disposition of mineral interests

 

 

 

 

 

 (468

) 

 

 

 -

 

 

 

 (468

) 

 

 

 (48,390 )

Unrealized net (gain) loss on marketable securities

 

 

3

 

 

 

 749

 

 

 

 73

 

 

 

 (78 )

 

 

 299

 

Realized net (gain) loss on marketable securities

 

 

3

 

 

 

 (231 )

 

 

 -

 

 

 

 (231 )

 

 

 -

 

Depreciation

 

 

 

 

 

 

 85

 

 

 

 100

 

 

 

 258

 

 

 

 286

 

Net loss from associates

 

 

5

 

 

 

 3,200

 

 

 

 3,328

 

 

 

 5,334

 

 

 

 5,218

 

Amortization of flow-through share premium

 

 

6

 

 

 

 (1,609 )

 

 

 (1,476 )

 

 

 (2,222 )

 

 

 (2,890 )

Accretion of provision for site reclamation and closure

 

 

 

 

 

 

 43

 

 

 

 27

 

 

 

 109

 

 

 

 67

 

Share-based compensation

 

 

9

 

 

 

 191

 

 

 

 328

 

 

 

 1,117

 

 

 

 1,455

 

Interest expense

 

 

 

 

 

 

 13

 

 

 

 25

 

 

 

 50

 

 

 

 94

 

Impairment expense

 

 

 

 

 

 

 -

 

 

 

 5,492

 

 

 

 -

 

 

 

 5,492

 

Other

 

 

 

 

 

 

 -

 

 

 

 23

 

 

 

 -

 

 

 

 1

 

Changes in non-cash working capital

 

 

11

 

 

 

 558

 

 

 

 (705 )

 

 

 488

 

 

 

 (518 )

Cash used in operating activities

 

 

 

 

 

 

 (4,281 )

 

 

 (5,132 )

 

 

 (8,721 )

 

 

 (11,223 )

Investing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest received

 

 

 

 

 

 

 162

 

 

 

 67

 

 

 

 472

 

 

 

 116

 

Option payment received

 

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 50

 

 

 

 -

 

Proceeds from disposition of mineral interests, net of transaction costs

 

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 4,479

 

Marketable securities additions

 

 

3

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (60 )

Disposition of marketable securities

 

 

3

 

 

 

 310

 

 

 

 -

 

 

 

 310

 

 

 

 -

 

Acquisition of mineral interest, net of cash acquired

 

 

 

 

 

 

 -

 

 

 

 (1,281 )

 

 

 -

 

 

 

 (1,281 )

Acquisition of Universal Mineral Services LTD

 

 

5a

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (1 )

Change in restricted cash

 

 

 

 

 

 

 -

 

 

 

 -

 

 

 

 -

 

 

 

 (29 )

Cash provided by (used in) investing activities

 

 

 

 

 

 

 472

 

 

 

 (1,214 )

 

 

 832

 

 

 

 3,224

 

Financing activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease payments

 

 

 

 

 

 

 (46 )

 

 

 (52 )

 

 

 (167 )

 

 

 (161 )

Proceeds from issuance of flow-through shares, net of issuance costs

 

 

8

 

 

 

 (88 )

 

 

 -

 

 

 

 7,838

 

 

 

 10,864

 

Cash (used in) provided by financing activities

 

 

 

 

 

 

 (134 )

 

 

 (52 )

 

 

 7,671

 

 

 

 10,703

 

Effect of foreign exchange on cash

 

 

 

 

 

 

 1

 

 

 

 -

 

 

 

 (3 )

 

 

 -

 

Increase (decrease) in cash

 

 

 

 

 

 

 (3,942 )

 

 

 (6,398 )

 

 

 (221 )

 

 

 2,704

 

Cash, beginning of the period

 

 

 

 

 

 

 14,030

 

 

 

 12,361

 

 

 

 10,309

 

 

 

 3,259

 

Cash, end of the period

 

 

 

 

 

 $ 10,088

 

 

 $ 5,963

 

 

 $ 10,088

 

 

 $ 5,963

 

 

Supplemental cash flow information (note 11)

 

The accompanying notes form an integral part of these condensed interim consolidated financial statements.

 

Fury Gold Mines Limited

4

 

 

 

Note 1: Nature of operations

 

Fury Gold Mines Limited (the “Company” or “Fury Gold”) was incorporated on June 9, 2008, under the Business Corporations Act (British Columbia) and is listed on the Toronto Stock Exchange and the NYSE-American, with its common shares trading under the symbol FURY. The Company’s registered and records office is at 1500-1055 West Georgia Street Vancouver, BC, V6E 4N7 and the mailing address is 1630-1177 West Hastings Street, Vancouver, BC, V6E 2K3.

 

The Company’s principal business activity is the acquisition and exploration of resource projects in Canada. At September 30, 2023, the Company had two principal projects: Eau Claire in Quebec and Committee Bay in Nunavut, and also holds a 50.022% interest in the Eleonore South Joint Venture (“ESJV”), with the remaining 49.978% held by Newmont Corporation (“Newmont”). Additionally, the Company holds a 23.36% (22% at November 8, 2023) interest in Dolly Varden Silver Corporation (“Dolly Varden”), which owns the Kitsault project in British Columbia and a 25% interest in Universal Mineral Services LTD (“UMS”), a private shared-services provider (note 5).

 

Note 2: Basis of presentation

 

Statement of compliance

 

These unaudited condensed interim consolidated financial statements (the “interim financial statements”) have been prepared in accordance with International Accounting Standard 34 – Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”). Certain disclosures included in the Company’s annual consolidated financial statements (the “consolidated financial statements”) prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the IASB and interpretations issued by the IFRS Interpretations Committee (“IFRICs”) have been condensed or omitted herein. Accordingly, these interim financial statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2022.

 

These interim financial statements were approved and authorized for issuance by the Board of Directors of the Company on November 8, 2023.

 

Basis of preparation and consolidation

 

These interim financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control exists when the Company has power over an investee, exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect the amount of the Company’s returns. The Company’s interim results are not necessarily indicative of its results for a full year.

 

The subsidiaries (with a beneficial interest of 100%) of the Company at September 30, 2023 were as follows:

 

Subsidiary

Place of

incorporation

Functional

currency

North Country Gold Corp. (“North Country”)

BC, Canada

CAD

Eastmain Resources Inc. (“Eastmain”)

ON, Canada

CAD

Eastmain Mines Inc. (“Eastmain Mines”) (a)

 Canada

CAD

Fury Gold USA Limited (“Fury Gold USA”) (b)

Delaware, U.S.A.

USD

 

(a) Company incorporated federally in Canada.

 

(b) Fury USA provides certain administrative services with respect to employee benefits for US resident personnel.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

5

 

 

 

Investments in associates and joint arrangements

 

These interim financial statements also include the following joint arrangement and investments in associates:

 

Associates and joint

arrangement

 

Ownership interest

 

 

Location

 

Classification and

accounting method

  

Dolly Varden

 

 

 23.36 %

 

BC, Canada

 

Associate; equity method

  

UMS

 

 

 25.0 %

 

BC, Canada

 

Associate; equity method

  

ESJV

 

 

 50.022 %

 

Quebec, Canada

 

Joint operation

  

 

These interim financial statements have been prepared on a historical cost basis except for certain financial instruments that have been measured at fair value (note 13). All amounts are expressed in thousands of Canadian dollars unless otherwise noted. Reference to US$ are to United States dollars. All intercompany balances and transactions have been eliminated.

 

Segmented information

 

The Company’s operating segments are reviewed by the key decision maker to make decisions about resources to be allocated to the segments and to assess their performance. The Company operates in one reportable operating segment, being the acquisition, exploration, and development of mineral resource properties, and in one geographical location, Canada.

 

Critical accounting estimates, judgments, and policies

 

The preparation of financial statements in accordance with IFRS requires management to select accounting policies and make estimates and judgments that may have a significant impact on the interim financial statements. Estimates are continuously evaluated and are based on management’s experience and expectations of future events that are believed to be reasonable under the circumstances. Actual outcomes may differ from these estimates.

 

In preparing the Company’s interim financial statements for the nine months ended September 30, 2023, the Company applied the material accounting policy information and critical accounting estimates and judgments disclosed in notes 3 and 5, respectively, of its consolidated financial statements for the year ended December 31, 2022.

 

Application of new and revised accounting standards:

 

On May 7, 2021, the IASB issued Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes). The amendments narrow the scope of the initial recognition exemption (“IRE”) so that it does not apply to transactions that give rise to equal and offsetting temporary differences. As a result, companies will need to recognize a deferred tax asset and a deferred tax liability for temporary differences arising on initial recognition of a lease and a decommissioning provision. The adoption of the new standard did not impact the financial statements of the Company.

 

On February 12, 2021, the IASB issued Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounted Estimates and Errors). The amendments require the disclosure of material accounting policy information rather than disclosing significant accounting policies and clarifies how to distinguish changes in accounting policies from changes in accounting estimates. The adoption of the new standard did not impact the financial statements of the Company.

 

On February 12, 2021, the IASB issued Disclosure Initiative – Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements). The amendments help companies provide useful accounting policy disclosures. The adoption of the new standard did not impact the financial statements of the Company.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

6

 

 

 

Note 3: Marketable securities

 

The marketable securities held by the Company were as follows:

 

 

 

Total

 

Balance at December 31, 2021

 

 $ 605

 

Additions

 

 

 110

 

Unrealized net loss

 

 

 (135 )

Balance at December 31, 2022

 

 $ 582

 

Additions

 

 

 1,138

 

Disposals

 

 

 (79 )

Unrealized net gain

 

 

 32

 

Balance at September 30, 2023

 

 $ 1,673

 

 

Purchases and sales of marketable securities are accounted for as of the trade date.

 

Note 4: Mineral interests

 

The Company’s resource properties are located in Canada. A summary of the carrying amounts is as follows:

 

 

 

Quebec

 

 

Nunavut

 

 

 British Columbia

 

 

Total

 

Balance at December 31, 2021

 

 $ 125,094

 

 

 $ 19,139

 

 

 $ 16,460

 

 

 $ 160,693

 

Sale of Homestake Resources Corporation

 

 

 -

 

 

 

 -

 

 

 

 (16,460 )

 

 

 (16,460 )

Acquisition of additional ownership interest in ESJV

 

 

 1,281

 

 

 

 -

 

 

 

 -

 

 

 

 1,281

 

Option payment received

 

 

 (310 )

 

 

 -

 

 

 

 -

 

 

 

 (310 )

Change in estimate of provision for site reclamation and closure

 

 

 (409 )

 

 

 395

 

 

 

 -

 

 

 

 (14 )

Balance at December 31, 2022

 

 $ 125,656

 

 

 $ 19,534

 

 

 $ -

 

 

 $ 145,190

 

Option payment received

 

 

 (675 )

 

 

 -

 

 

 

 -

 

 

 

 (675 )

Change in estimate of provision for site reclamation and closure

 

 

 (155 )

 

 

 (220 )

 

 

 -

 

 

 

 (375 )

Balance at September 30, 2023

 

 $ 124,826

 

 

 $ 19,314

 

 

 $ -

 

 

 $ 144,140

 

 

On December 12, 2022, the Company entered into an Option Agreement (“the Ophir Agreement”), pursuant to which Ophir Gold Corp. (the “Optionee”) would acquire a 100% interest in the Radis Property through payment of certain cash and common shares over a three-year period, payments of which may be accelerated by the Optionee. The Company shall retain a 2% NSR on the property, three-quarters of which may be purchased by the Optionee for $1,500. The Agreement was subject to certain closing conditions, which were met on January 25, 2023. The first option payment, comprising a cash payment of $50 and 2,500,000 common shares of Ophir Gold with a fair value of $625, was received upon closing. The common shares of Ophir Gold have been classified as marketable securities (note 3). Further option payments are due on the next three anniversary dates of January 25, comprising cash payments totaling $325 and issuance of 2,500,000 additional common shares in accordance with the agreement.

 

On August 16, 2023 the Company entered into a royalty extinguishment agreement whereby certain Eastmain net smelter royalties of the Mia project were extinguished in exchange for marketable securities to the value of $468 as at the date of the agreement.

 

On November 1, 2023 Benz Mining Corp (“Benz”) fulfilled its obligations in accordance with an option agreement dated August 7, 2019, to acquire 75% in the Eastmain Gold, Ruby Hill West and Ruby Hill East projects. The final payment received included $1,350 in cash and 1,237,216 Benz common shares.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

7

 

 

 

Note 5: Investment in associates

 

(a) Acquisition of investments in associates

 

(i)

On February 25, 2022, the Company completed the sale of Homestake Resources Corporation to Dolly Varden for cash proceeds of $5,000 and 76,504,590 common shares of Dolly Varden. The Company’s resulting interest in Dolly Varden represented approximately 35.3% of the issued and outstanding common shares of Dolly Varden on February 25, 2022, which has been accounted for using the equity method. The Company recognized a gain of $48,390, net of transaction costs of $589, on the date of disposition. On October 13, 2022, the Company completed the sale of 17,000,000 common shares of Dolly Varden for total gross proceeds of $6,800.

 

 

(ii)

On April 1, 2022, the Company purchased a 25% share interest in UMS, a private shared-services provider for nominal consideration. The Company funded, in addition to its nominal investment in UMS, a cash deposit of $150 which is held by UMS for the purposes of general working capital, and which will be returned to the Company upon termination of the UMS Canada arrangement, net of any residual unfulfilled obligations. UMS is the private company through which its shareholders, including Fury Gold, share geological, financial, and transactional advisory services as well as administrative services on a full, cost recovery basis. Many of the Company’s key personnel are now directly employed by UMS and seconded to the Company.

 

(b) Summarized financial information of the Company’s investments in associates:

 

The carrying amounts of the Company’s investments in associates as at September 30, 2023 were as follows:

 

 

 

Dolly Varden

 

 

UMS

 

 

Total

 

Carrying amount at December 31, 2021

 

 $ -

 

 

 $ -

 

 

 $ -

 

Acquisition of equity investment

 

 

 60,439

 

 

 

 151

 

 

 

 60,590

 

Disposal

 

 

 (12,280 )

 

 

 -

 

 

 

 (12,280 )

Company’s share of net loss of associates

 

 

 (5,856 )

 

 

 (24 )

 

 

 (5,880 )

Carrying amount at December 31, 2022

 

 $ 42,303

 

 

 $ 127

 

 

 $ 42,430

 

Company’s share of net loss of associates

 

 

 (5,314 )

 

 

 (20 )

 

 

 (5,334 )

Carrying amount at September 30, 2023

 

 $ 36,989

 

 

 $ 107

 

 

 $ 37,096

 

 

The fair market value of the Company’s investment in Dolly Varden as at September 30, 2023 was $38,083 based upon a closing share price of $0.64 on that date.

 

For the three months ended September 30, 2023, the Company’s equity share of net loss of the Company’s associates on a 100% basis were as follows:

 

Three months ended September 30, 2023

 

Dolly Varden

 

 

UMS

 

Cost recoveries

 

 $ -

 

 

 $ (1,056 )

Exploration and evaluation

 

 

 14,814

 

 

 

 362

 

Marketing

 

 

 352

 

 

 

 110

 

Share-based compensation

 

 

 469

 

 

 

 -

 

Administrative and other

 

 

 (1,948 )

 

 

 592

 

Net loss of associate, 100%

 

 

 13,687

 

 

 

 8

 

Company’s share of net loss of associates

 

 $ 3,198

 

 

 $ 2

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

8

 

 

 

For the nine months ended September 30, 2023, the Company’s equity share of net loss of the Company’s associates on a 100% basis were as follows:

 

Nine months ended September 30, 2023

 

Dolly Varden

 

 

UMS

 

Cost recoveries

 

 $ -

 

 

 $ (4,277 )

Exploration and evaluation

 

 

 22,111

 

 

 

 1,529

 

Marketing

 

 

 1,100

 

 

 

 369

 

Share-based compensation

 

 

 1,373

 

 

 

 -

 

Administrative and other

 

 

 (1,851 )

 

 

 2,457

 

Net loss of associate, 100%

 

 

 22,733

 

 

 

 78

 

Company’s share of net loss of associates

 

 $ 5,314

 

 

 $ 20

 

 

The Company’s equity share of net assets of associates at September 30, 2023 was as follows:

 

 

 

Dolly Varden

 

 

UMS

 

Current assets

 

 $ 6,954

 

 

 $ 817

 

Non-current assets

 

 

 154,167

 

 

 

 2,539

 

Current liabilities

 

 

 (2,807 )

 

 

 (1,552 )

Non-current liabilities

 

 

 -

 

 

 

 (1,375 )

Net assets, 100%

 

 

 158,314

 

 

 

 429

 

Company’s equity share of net assets of associates

 

 $ 36,989

 

 

 $ 107

 

 

(c) Services rendered and balances with UMS

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30  

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Exploration and evaluation

 

 $ 131

 

 

 $ 129

 

 

 $ 713

 

 

 $ 432

 

General, marketing and administration

 

 

 123

 

 

 

 171

 

 

 

 584

 

 

 

 527

 

Total transactions for the period

 

 $ 254

 

 

 $ 300

 

 

 $ 1,297

 

 

 $ 959

 

 

The outstanding balance owing at September 30, 2023, was $83 (December 31, 2022 – $240) which is included in accounts payable and accrued liabilities.

 

As part of the UMS arrangement, the Company is contractually obliged to pay certain rental expenses in respect of a ten-year office lease entered into by UMS on July 1, 2021. As at September 30, 2023, the Company expects to incur approximately $398 in respect of its share of future rental expense of UMS for the remaining 7.75 years.

 

The Company issues share options to certain UMS employees, including key management personnel of the Company (note 10). The Company recognized a share-based compensation expense of $45 and $293 for the three and nine months ended September 30, 2023 respectively of share options issued to UMS employees (September 30, 2022 - $100 and $408).

 

Note 6: Flow-through share premium liability

 

Flow-through shares are issued at a premium, calculated as the difference between the price of a flow-through share and the price of a common share at that date. Tax deductions generated by eligible expenditures are passed through to the shareholders of the flow-through shares once the eligible expenditures are incurred and renounced.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

9

 

 

 

The flow-through share funding and expenditures, along with the corresponding impact on the flow-through share premium liability, were as follows:

 

Quebec

 

Flow-through funding

and expenditures

 

 

Flow-through

Premium liability

 

Balance at December 31, 2021

 

 $ 7,290

 

 

 $ 3,124

 

Flow-through eligible expenditures

 

 

 (7,290 )

 

 

 (3,124 )

Balance at December 31, 2022

 

 $ -

 

 

 $ -

 

Flow-through share issuance (note 8)

 

 

 8,750

 

 

 

 3,889

 

Flow-through eligible expenditures

 

 

 (5,000 )

 

 

 (2,222 )

Balance at September 30, 2023

 

 $ 3,750

 

 

 $ 1,667

 

 

On March 23, 2023, the Company completed an offering (note 8) and raised $8,750 through the issuance of 6,076,500 common shares designated as flow-through shares. The flow-through proceeds will be used for mineral exploration in Quebec. The Company is committed to incur the full exploration expenditures of $8,750 before December 31, 2024.

 

Note 7: Exploration and evaluation costs

 

For the three and nine months ended September 30, 2023 and 2022, the Company’s exploration and evaluation costs were as follows:

 

 

 

Quebec

 

 

Nunavut

 

 

Total

 

Assaying

 

 $ 490

 

 

 $ 11

 

 

 $ 501

 

Exploration drilling

 

 

 1,326

 

 

 

 -

 

 

 

 1,326

 

Camp cost, equipment, and field supplies

 

 

 367

 

 

 

 48

 

 

 

 415

 

Geological consulting services

 

 

 -

 

 

 

 8

 

 

 

 8

 

Geophysical Analysis

 

 

 92

 

 

 

 -

 

 

 

 92

 

Permitting, environmental and community costs

 

 

 24

 

 

 

 45

 

 

 

 69

 

Expediting and mobilization

 

 

 4

 

 

 

 -

 

 

 

 4

 

Salaries and wages

 

 

 600

 

 

 

 12

 

 

 

 612

 

Fuel and consumables

 

 

 257

 

 

 

 -

 

 

 

 257

 

Aircraft and travel

 

 

 500

 

 

 

 (1 )

 

 

 499

 

Share-based compensation

 

 

 53

 

 

 

 3

 

 

 

 56

 

Three months ended September 30, 2023

 

 $ 3,713

 

 

 $ 126

 

 

 $ 3,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quebec

 

 

Nunavut

 

 

Total

 

Assaying

 

 $ 662

 

 

 $ 11

 

 

 $ 673

 

Exploration drilling

 

 

 1,107

 

 

 

 -

 

 

 

 1,107

 

Camp cost, equipment, and field supplies

 

 

 316

 

 

 

 47

 

 

 

 363

 

Geological consulting services

 

 

 35

 

 

 

 6

 

 

 

 41

 

Permitting, environmental and community costs

 

 

 43

 

 

 

 -

 

 

 

 43

 

Expediting and mobilization

 

 

 4

 

 

 

 -

 

 

 

 4

 

Salaries and wages

 

 

 647

 

 

 

 4

 

 

 

 651

 

Fuel and consumables

 

 

 252

 

 

 

 -

 

 

 

 252

 

Aircraft and travel

 

 

 536

 

 

 

 21

 

 

 

 557

 

Share-based compensation

 

 

 93

 

 

 

 1

 

 

 

 94

 

Three months ended September 30, 2022

 

 $ 3,695

 

 

 $ 90

 

 

 $ 3,785

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

10

 

 

 

 

 

Quebec

 

 

Nunavut

 

 

British Columbia

 

 

Total

 

Assaying

 

 $ 675

 

 

 $ 32

 

 

 $ -

 

 

 $ 707

 

Exploration drilling

 

 

 1,687

 

 

 

 -

 

 

 

 -

 

 

 

 1,687

 

Camp cost, equipment, and field supplies

 

 

 734

 

 

 

 145

 

 

 

 -

 

 

 

 879

 

Geological consulting services

 

 

 7

 

 

 

 13

 

 

 

 -

 

 

 

 20

 

Geophysical Analysis

 

 

 92

 

 

 

 -

 

 

 

 -

 

 

 

 92

 

Permitting, environmental and community costs

 

 

 220

 

 

 

 138

 

 

 

 -

 

 

 

 358

 

Expediting and mobilization

 

 

 10

 

 

 

 -

 

 

 

 -

 

 

 

 10

 

Salaries and wages

 

 

 1,444

 

 

 

 22

 

 

 

 -

 

 

 

 1,466

 

Fuel and consumables

 

 

 362

 

 

 

 -

 

 

 

 -

 

 

 

 362

 

Aircraft and travel

 

 

 601

 

 

 

 (1 )

 

 

 -

 

 

 

 600

 

Share-based compensation

 

 

 339

 

 

 

 9

 

 

 

 -

 

 

 

 347

 

Nine months ended September 30, 2023

 

 $ 6,170

 

 

 $ 358

 

 

 $ -

 

 

 $ 6,528

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quebec

 

 

Nunavut

 

 

British Columbia

 

 

Total

 

Assaying

 

 $ 1,091

 

 

 $ 39

 

 

 $ 2

 

 

 $ 1,132

 

Exploration drilling

 

 

 1,820

 

 

 

 -

 

 

 

 -

 

 

 

 1,820

 

Camp cost, equipment, and field supplies

 

 

 766

 

 

 

 144

 

 

 

 10

 

 

 

 920

 

Geological consulting services

 

 

 41

 

 

 

 10

 

 

 

 -

 

 

 

 51

 

Geophysical analysis

 

 

 127

 

 

 

 -

 

 

 

 -

 

 

 

 127

 

Permitting, environmental and community costs

 

 

 135

 

 

 

 119

 

 

 

 -

 

 

 

 254

 

Expediting and mobilization

 

 

 10

 

 

 

 -

 

 

 

 -

 

 

 

 10

 

Salaries and wages

 

 

 1,858

 

 

 

 38

 

 

 

 1

 

 

 

 1,897

 

Fuel and consumables

 

 

 519

 

 

 

 -

 

 

 

 -

 

 

 

 519

 

Aircraft and travel

 

 

 699

 

 

 

 21

 

 

 

 -

 

 

 

 720

 

Share-based compensation

 

 

 413

 

 

 

 7

 

 

 

 1

 

 

 

 421

 

Nine months ended September 30, 2022

 

 $ 7,479

 

 

 $ 378

 

 

 $ 14

 

 

 $ 7,871

 

 

Note 8: Share capital

 

Authorized

 

Unlimited common shares without par value.

 

Unlimited preferred shares – nil issued and outstanding.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

11

 

 

 

Share issuances

 

Nine months ended September 30, 2023:

 

In March 2023, the Company issued 6,076,500 flow-through shares for gross proceeds of $8,750 (“March 2023 Offering”). Share issue costs related to the March 2023 Offering totaled $912, which included $525 in commissions and $387 in other issuance costs. A reconciliation of the impact of the March 2023 Offering on share capital is as follows:

 

 

 

Number of

common shares

 

 

Impact on

share capital

 

Flow-through shares issued at $1.44 per share

 

 

 6,076,500

 

 

 $ 8,750

 

Cash share issue costs

 

 

 -

 

 

 

 (912 )

Proceeds net of share issue costs

 

 

 6,076,500

 

 

 

 7,838

 

Less: flow-through share premium liability (note 6)

 

 

 -

 

 

 

 (3,889 )

Total allocated to share capital

 

 

 6,076,500

 

 

 $ 3,949

 

 

Nine months ended September 30, 2022:

 

 

i.

The Company closed the “April 2022 Offering”, a non-brokered private equity placement, for gross proceeds of $11,000 and consisted of 13,750,000 common shares priced at $0.80 per share. Proceeds from the Private Placement will be used to fund continued exploration at the Company’s Eau Claire project in Quebec and for general working capital. Share issue costs related to the April 2022 Offering totaled $136.

 

Note 9: Share option and warrant reserve

 

(a) Share-based compensation expense

 

The Company uses the fair value method of accounting for all share-based payments to directors, officers, employees, and other service providers. During the three and nine months ended September 30, 2023 and 2022, the share-based compensation expense was as follows:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Recognized in net loss (earnings) and included in:

 

 

 

 

 

 

 

 

 

 

 

 

Exploration and evaluation costs

 

 $ 56

 

 

 $ 94

 

 

 $ 347

 

 

 $ 421

 

Fees, salaries and other employee benefits

 

 

 135

 

 

 

 234

 

 

 

 770

 

 

 

 1,034

 

Total share-based compensation expense

 

 $ 191

 

 

 $ 328

 

 

 $ 1,117

 

 

 $ 1,455

 

 

During the three and nine months ended September 30, 2023, the Company granted 156,000 and 2,689,425 share options, respectively (three and nine months ended September 30, 2022 – nil and 3,430,000, respectively) to directors, officers, employees, and certain consultants who provide certain on-going services to the Company, representative of employee services. The Company’s executive officer option grants are subject to vesting restrictions, representing certain performance measures to be met. As at September 30, 2023, it is not considered probable that those performance measures will be achieved, therefore those options have been excluded from the share-based compensation expense recognized.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

12

 

 

 

The weighted average fair value per option of these share options for the three and nine months ended September 30, 2023 was calculated as $0.27 and $0.47, respectively, using the Black-Scholes option valuation model at the grant date using the following weighted average assumptions:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Risk-free interest rate

 

 

 4.25 %

 

 

 -

 

 

 

 3.06 %

 

 

 2.20 %

Expected dividend yield

 

Nil

 

 

 

 -

 

 

Nil

 

 

Nil

 

Share price volatility

 

 

 69 %

 

 

 -

 

 

 

 68 %

 

 

 67 %

Expected forfeiture rate

 

 

 4.7 %

 

 

 -

 

 

 

 4.7 %

 

 

 5 %

Expected life in years

 

 

 5.0

 

 

 

 -

 

 

 

 5.0

 

 

 

 5.0

 

 

The risk-free interest rate assumption is based on the Government of Canada benchmark bond yields and treasury bills with a remaining term that approximates the expected life of the share-based options. The expected volatility assumption is based on the historical and implied volatility of the Company’s common shares. The expected forfeiture rate and the expected life in years are based on historical trends. 

 

(b) Share option plan

 

The Company maintains a rolling share option plan providing for the issuance of share options up to 10% of the Company’s issued and outstanding common shares at the time of the grant. The Company may grant share options from time to time to its directors, officers, employees, and other service providers. The share options typically vest as to 25% on the date of the grant and 12.5% every three months thereafter for a total vesting period of 18 months.

 

The number of share options issued and outstanding and the weighted average exercise price were as follows:

 

 

 

Number of

share options

 

 

Weighted

average

exercise price

($/option)

 

Outstanding, December 31, 2021

 

 

 6,751,997

 

 

 $ 2.00

 

Granted

 

 

 3,430,000

 

 

 

 1.00

 

Expired

 

 

 (608,237 )

 

 

 4.65

 

Forfeited

 

 

 (693,436 )

 

 

 1.77

 

Outstanding, December 31, 2022

 

 

 8,880,324

 

 

 $ 1.44

 

Granted

 

 

 3,134,800

 

 

 

 0.80

 

Expired

 

 

 (1,672,087 )

 

 

 1.66

 

Forfeited

 

 

 (386,522 )

 

 

 0.89

 

Outstanding, September 30, 2023

 

 

 9,956,515

 

 

 $ 1.23

 

 

As at September 30, 2023, the number of share options outstanding and exercisable was as follows:

 

 

 

Options outstanding

 

 

Options exercisable

 

Exercise

price ($/option)

 

Number of shares

 

 

Weighted average exercise price ($/option)

 

 

Weighted average remaining life (years)

 

 

Number of shares

 

 

Weighted average exercise price ($/option)

 

 

Weighted average remaining life (years)

 

$0.56 – $1.00

 

 

 6,927,906

 

 

 

 0.91

 

 

 

 3.71

 

 

 

 5,016,193

 

 

 

 0.94

 

 

 

 3.52

 

$1.00 – $1.95

 

 

 893,609

 

 

 

 1.79

 

 

 

 1.45

 

 

 

 893,609

 

 

 

 1.79

 

 

 

 1.45

 

$2.05 – $3.00

 

 

 2,135,000

 

 

 

 2.05

 

 

 

 2.06

 

 

 

 2,135,000

 

 

 

 2.05

 

 

 

 2.06

 

 

 

 

 9,956,515

 

 

 

 1.23

 

 

 

 3.15

 

 

 

 8,044,802

 

 

 

 1.33

 

 

 

 2.90

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

13

 

 

 

(c) Share purchase warrants

 

The number of share purchase warrants outstanding at September 30, 2023 was as follows:

 

 

 

Warrants

outstanding

 

 

Weighted average exercise price

 ($/share)

 

Outstanding at December 31, 2021

 

 

 8,211,453

 

 

 $ 1.27

 

Expired

 

 

 (750,003 )

 

 

 1.95

 

Outstanding at December 31, 2022 and September 30, 2023

 

 

 7,461,450

 

 

 $ 1.20

 

 

The following table reflects the warrants issued and outstanding as of September 30, 2023:

 

Expiry date

 

Warrants

outstanding

 

 

Exercise price ($/share)

 

October 6, 2024

 

 

 5,085,670

 

 

 

 1.20

 

October 12, 2024

 

 

 2,375,780

 

 

 

 1.20

 

Total

 

 

 7,461,450

 

 

 

 1.20

 

 

Note 10: Key management personnel

 

Key management personnel include Fury Gold’s board of directors and certain executive officers of the Company, including the Chief Executive Officer and Chief Financial Officer.

 

The remuneration of the Company’s key management personnel was as follows:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Short-term benefits provided to executives(a)

 

 $ 196

 

 

 $ 229

 

 

 $ 708

 

 

 $ 1,006

 

Directors’ fees paid to non-executive directors

 

 

 73

 

 

 

 50

 

 

 

 209

 

 

 

 150

 

Share-based compensation

 

 

 119

 

 

 

 192

 

 

 

 682

 

 

 

 935

 

Total

 

 $ 388

 

 

 $ 471

 

 

 $ 1,599

 

 

 $ 2,091

 

 

(a) Short-term employee benefits include salaries, bonuses payable within twelve months of the date of the condensed interim consolidated statements of financial position, and other annual employee benefits.

 

Note 11: Supplemental cash flow information

 

The impact of changes in non-cash working capital was as follows:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Accounts receivable

 

 $ (450 )

 

 $ (89 )

 

 $ (413 )

 

 $ (75 )

Prepaid expenses and deposits

 

 

 (323 )

 

 

 (321 )

 

 

 (296 )

 

 

 (137 )

Accounts payable and accrued liabilities

 

 

 1,331

 

 

 

 (295 )

 

 

 1,197

 

 

 

 (306 )

Change in non-cash working capital

 

 $ 558

 

 

 $ (705 )

 

 $ 488

 

 

 $ (518 )

 

Operating activities include the following cash (paid) received:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Income taxes refunded (paid)

 

 $ -

 

 

 $ -

 

 

 $ (18 )

 

 $ 187

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

14

 

 

 

Note 12: Loss (earnings) per share

 

For the three and nine months ended September 30, 2023, and 2022, the weighted average number of shares outstanding and loss (earnings) per share were as follows:

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net loss (earnings)

 

 $ 6,650

 

 

 $ 12,280

 

 

 $ 12,606

 

 

 $ (27,779 )

Weighted average basic number of shares outstanding

 

 

 145,547,450

 

 

 

 139,470,950

 

 

 

 143,722,274

 

 

 

 134,031,390

 

Basic loss (earnings) per share

 

 $ 0.05

 

 

 $ 0.09

 

 

 $ 0.09

 

 

 $ (0.21 )

Weighted average diluted number of shares outstanding

 

 

 145,547,450

 

 

 

 139,470,950

 

 

 

 143,722,274

 

 

 

 139,484,961

 

Diluted (earnings) loss per share

 

 $ 0.05

 

 

 $ 0.09

 

 

 $ 0.09

 

 

 $ (0.20 )

 

All of the outstanding share options and share purchase warrants at September 30, 2023 were anti-dilutive for the periods then ended as the Company was in a loss position.  

 

Note 13: Financial instruments

 

The Company’s financial instruments as at September 30, 2023 consisted of cash, accounts receivable, marketable securities, deposits, and accounts payable and accrued liabilities. The fair values of these financial instruments approximate their carrying values, unless otherwise noted.

 

(a)      Financial assets and liabilities by categories

 

 

 

At September 30, 2023

 

 

At December 31, 2022

 

 

 

Amortized Cost

 

 

FVTPL

 

 

Total

 

 

Amortized Cost

 

 

FVTPL

 

 

Total

 

Cash

 

 $ 10,088

 

 

 $ -

 

 

 $ 10,088

 

 

 $ 10,309

 

 

 $ -

 

 

 $ 10,309

 

Marketable securities

 

 

 -

 

 

 

 1,673

 

 

 

 1,673

 

 

 

 -

 

 

 

 582

 

 

 

 582

 

Deposits

 

 

 85

 

 

 

 -

 

 

 

 85

 

 

 

 25

 

 

 

 -

 

 

 

 25

 

Accounts receivable

 

 

 782

 

 

 

 -

 

 

 

 782

 

 

 

 369

 

 

 

 -

 

 

 

 369

 

Total financial assets

 

 

 10,955

 

 

 

 1,673

 

 

 

 12,628

 

 

 

 10,703

 

 

 

 582

 

 

 

 11,285

 

Accounts payable and accrued liabilities

 

 

 2,351

 

 

 

 -

 

 

 

 2,351

 

 

 

 1,148

 

 

 

 -

 

 

 

 1,148

 

Undiscounted lease payments

 

 

 300

 

 

 

 -

 

 

 

 300

 

 

 

 468

 

 

 

 

 

 

 

 468

 

Total financial liabilities

 

 $ 2,651

 

 

 $ -

 

 

 $ 2,651

 

 

 $ 1,616

 

 

 $ -

 

 

 $ 1,616

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

15

 

 

 

(b)Financial assets and liabilities measured at fair value

 

The categories of the fair value hierarchy that reflect the significance of inputs used in making fair value measurements are as follows:

 

Level 1 – fair values based on unadjusted quoted prices in active markets for identical assets or liabilities;

 

Level 2 – fair values based on inputs that are observable for the asset or liability, either directly or indirectly; and

 

Level 3 – fair values based on inputs for the asset or liability that are not based on observable market data.

 

The Company’s policy to determine when a transfer occurs between levels is to assess the impact at the date of the event or the change in circumstances that could result in a transfer. No transfers occurred between the levels during the period.

 

The Company’s financial instruments measured at fair value on a recurring basis were the Company’s marketable securities which were classified as Level 1 at September 30, 2023 (December 31, 2022 – Level 1).

 

During the three and nine months ended September 30, 2023, there were no financial assets or financial liabilities transferred, measured, and recognized in the condensed interim consolidated statements of financial position at fair value that would be categorized as level 3 in the fair value hierarchy.

 

(c) Financial instruments and related risks

 

The Company’s financial instruments are exposed to liquidity risk, and market risks, which include currency risk and price risk. As at September 30, 2023, the primary risks were as follows:

 

Liquidity risk

 

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company proactively manages its capital resources and has in place a budgeting and cash management process to help determine the funds required to ensure the Company has the appropriate liquidity to meet its current exploration plans and achieve its growth objectives. The Company ensures that there is sufficient liquidity available to meet its short-term business requirements, taking into account its anticipated cash outflows from exploration activities, and its holdings of cash and marketable securities. The Company monitors and adjusts, when required, these exploration programs as well as corporate administrative costs to ensure that adequate levels of working capital are maintained.

 

As at September 30, 2023, the Company had unrestricted cash of $10,088 (December 31, 2022 – $10,309), working capital surplus of $9,212 (December 31, 2022 – $10,554), which the Company defines as current assets less current liabilities, and an accumulated deficit of $144,447 (December 31, 2022 – $131,841). The Company notes that the flow-through share premium liability, which reduced the Company’s working capital by $1,667 (December 31, 2022 – nil), is not settled through cash payment. Instead, the flow-through share premium liability will be drawn down as the Company incurs exploration expenditures for the Eau Claire project. During the three and nine months ended September 30, 2023, Fury Gold recognized net losses of $6,650 and $12,606, respectively, (three and nine months ended September 30, 2022 – net loss of $12,280 and net earnings of $27,779). The Company expects to incur future operating losses in relation to exploration activities. With no source of operating cash flow, there is no assurance that sufficient funding will be available to conduct further exploration and development of its mineral properties.

 

The Company’s contractual obligations are as follows:

 

 

 

Within

 1 year

 

 

2 to 3

years

 

 

Over 3

years

 

 

At September 30

2023

 

 

At December 31

2022

 

Accounts payable and accrued liabilities

 

 $ 2,351

 

 

 $ -

 

 

 $ -

 

 

 $ 2,351

 

 

 $ 1,148

 

Quebec flow-through expenditure requirements

 

 

 -

 

 

 

 3,750

 

 

 

 -

 

 

 

 3,750

 

 

 

 -

 

Undiscounted lease payments

 

 

 189

 

 

 

 111

 

 

 

 -

 

 

 

 300

 

 

 

 468

 

Total

 

 $ 2,540

 

 

 $ 3,861

 

 

 $ -

 

 

 $ 6,401

 

 

 $ 1,616

 

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

16

 

 

 

The Company also makes certain payments arising on mineral claims and leases on an annual or bi-annual basis to ensure all the Company’s properties remain in good standing. Cash payments of $53 and $278 were made during the three and nine months ended September 30, 2023, in respect of these mineral claims.

 

During the nine months ended September 30, 2023, the Company entered into a drilling services contract for the 2023 exploration program. The Company has committed to a minimum 6,000 metre drilling program, and as at September 30, 2023, 13,262 metres had been drilled. The company also entered a helicopter service agreement in May 2023 with a minimum length of 120 days, starting on June 1, 2023.

 

Credit risk

 

The Company’s cash and accounts receivable are exposed to credit risk, which is the risk that the counterparties to the Company’s financial instruments will cause a loss to the Company by failing to pay their obligations. The amount of credit risk to which the Company is exposed is considered insignificant as the Company’s cash is held with highly rated financial institutions in interest-bearing accounts and the accounts receivable primarily consist of sales tax receivables and a receivable from a reputable supplier of services in Canada.

 

Market risk

 

This is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Significant market risks to which the Company is exposed are as follows:

 

i.

Currency risk

 

 

 

The Company is exposed to currency risk by having balances and transactions in currencies that are different from its functional currency (the Canadian dollar). The Company’s foreign currency exposure related to its financial assets and liabilities held in US dollars was as follows:

 

 

 

 At September 30

2023

 

 

 At December 31

2022

 

Financial assets

 

 

 

 

 

 

US$ bank accounts

 

 $ 9

 

 

 $ 1

 

Financial liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

 

 (99 )

 

 

 (61 )

 

 

 $ (90 )

 

 $ (60 )

 

A 10% increase or decrease in the US dollar to Canadian dollar exchange rate would not have a material impact on the Company’s net loss.

 

ii.

Price risk

 

 

 

The Company holds certain investments in marketable securities (note 3) which are measured at fair value, being the closing share price of each equity security at the date of the condensed interim consolidated statements of financial position. The Company is exposed to changes in share prices which would result in gains and losses being recognized in the earnings for the period. A 10% increase or decrease in the Company’s marketable securities’ share prices would not have a material impact on the Company’s net income.

 

Fury Gold Mines Limited

Notes to Q3 2023 Condensed Interim Consolidated Financial Statements

(Expressed in thousands of Canadian dollars, except where noted – Unaudited)

17