Auryn Resources Inc. (TSX:AUG) exchanged term sheet to acquire Eastmain Resources Inc. (TSX:ER) for approximately CAD 150 million on July 29, 2020. Auryn Resources Inc. (TSX:AUG) entered into a definitive agreement to acquire Eastmain Resources Inc. (TSX:ER) on July 29, 2020. Under the terms of transaction, Eastmain shareholders will be entitled to receive approximately 0.117 of a Fury Gold (the new company) share (approximately 0.165 of an Auryn share pre-consolidation) for each Eastmain share. In related transactions, Auryn Resources Inc. will spin out Peruvian assets into two new SpinCo companies - "SpinCo Sombrero" consisting of the Sombrero project and "SpinCo Curibaya" consisting of the Curibaya and Huilacollo projects to Auryn shareholders and will conduct concurrent private placement of Fury Gold subscription receipts, raising a minimum of CAD 15 million. Concurrent with the spin-out of the Peruvian projects, Fury Gold will consolidate its shares by approximately 10:7 such that approximately 110 million Fury Gold shares will be outstanding after the Eastmain acquisition, of which 69% will be owned by current Auryn shareholders and 31% will be owned by current Eastmain shareholders. Holders of Eastmain options will receive appropriately adjusted replacement options of Fury Gold and Eastmain's outstanding warrants will be adjusted so that on exercise, holders will receive shares of Fury Gold adjusted to reflect the Eastmain exchange ratio. Eastmain expects to be de-listed from the TSX and the OTCQB when the arrangement is completed and Eastmain will become a wholly-owned subsidiary of Fury Gold. Fury Gold is expected to remain listed on the TSX and NYSE American exchanges. In case of termination due to superior proposal received by Auryn or Eastmain, the party accepting a superior proposal has agreed to pay a termination fee of 3.75% based on the defined value of the superior proposal.

Fury Gold will be led by new President and Chief Executive Officer, Mike Timmins. The Board of Fury Gold will consist of current Auryn Directors, Ivan Bebek, Jeffrey Mason and Steve Cook, and current Eastmain Directors, Michael Hoffman and Blair Schultz, with the addition of Mike Timmins and proposed advisory Board will consist of Shawn Wallace and Laurie Curtis.

The transaction is subject to approval from special majority (66 2/3%) of security holders of Auryn Resources and Eastmain Resources and the completion of the financing, as well as approval of the arrangements under British Columbia and Ontario law and approval of the TSX and NYSE American. Eastmain and Auryn Shareholders will not have exercised Dissent Rights, or have instituted proceedings to exercise Dissent Rights, in connection with the arrangement (other than Eastmain and Auryn Shareholders representing not more than 5% of the Eastmain and Auryn Shares then outstanding). As of October 5, 2020, remaining principal condition to the completion of the transaction is obtaining the final orders of the British Columbia Supreme Court and Ontario Superior Court of Justice at hearings which are scheduled for October 7, 2020. The Directors and officers of each of Auryn and Eastmain collectively holding 17.1 million Auryn securities and 16.9 million Eastmain securities have entered into voting agreements with Eastmain and Auryn, respectively, under which they agree to vote in favor of the resolutions approving the transaction. In addition, shareholders of Eastmain holding 20.6 million shares have entered into agreements with Auryn agreeing to vote the Eastmain securities they hold as of the record date in support of the resolutions approving the transaction. The Board of Directors of Auryn and Eastmain, following consultation with their financial and legal advisors and the recommendation of the respective special committees formed to consider the transaction, have unanimously approved the transaction. Both Boards of Directors recommend that their respective security holders vote in favor of the resolutions to approve the transaction. Auryn and Eastmain have formed their respective special committees to consider the transaction. As of August 31, 2020, Auryn has entered into an agreement with a syndicate of underwriters in connection with a bought deal private placement financing of an aggregate of 7.5 million subscription receipts to raise gross proceeds of CAD 22.5 million. The subscription receipts will be exchanged for common shares of Auryn concurrently with completion transaction. The sale of subscription receipts will fulfill a principal condition of the transaction. The offering is scheduled to close on September 24, 2020. As of September 24, 2020, the equity financing announced on August 31, 2020 was completed by raising CAD 23 million through the issuance of 7.8 million subscription receipts. It is anticipated that a special meeting of the security holders of Eastmain and an annual and special meeting of the security holders of Auryn will be held on October 5, 2020. As of September 25, 2020, Institutional Shareholder Services Inc. has recommended that Auryn shareholders vote in favor of all proposed resolutions related to the reorganization of Auryn, the acquisition of Eastmain Resources and the recently closed bought-deal subscription receipts financing. As of October 5, 2020, the transaction was approved by shareholders of both companies at respective special meetings. As of October 7, 2020, the transaction received approval from the British Columbia Supreme Court and the Ontario Superior Court of Justice. The transaction is expected to be complete later in the year 2020. It also follows an endorsement from independent proxy advisor Glass Lewis which, like independent proxy advisor ISS last week, recommended shareholders of each of Auryn and Eastmain vote in favor of the transaction. As per filing on August 10, 2020, the transaction is expected to complete in October 2020. As of September 24, 2020, the transaction is expected to be completed on October 9, 2020.

Minvisory Corp. acted as financial advisor and Bernhard Zinkhofer, Cory Kent, Michael Taylor, Ravipal Bains, Gavyn Backus, Melanie Harmer, Stephen Brown-Okruhlik and Sonia Rainville of McMillan LLP acted as legal advisors to Auryn. Richard Wong of Thorsteinssons LLP and John Hollinrake of Dorsey & Whitney LLP acted as legal advisors to Auryn. Matthew Gaasenbeek, Michael Barman, Pierre Laliberte, Greg Bowie, Jason Banducci, Rosemary Teixeira, Ashley Kowal, Carli Kavanagh and Alison Choi of RF Securities Clearing LP acted as financial advisor and fairness opinion provider to the Special Committee of Auryn. Bob Wooder and Kathleen Keilty of Blake, Cassels & Graydon LLP acted as legal advisors to Auryn. Maxit Capital LP acted as fairness opinion provider and financial advisor and Jay Goldman, Lindsay Clements, Jennifer Campbell, Christopher B. Norton, Kimberly Dodson, Ashley Jung, Rebecca Lee, Eni Silva and Robert Lysy of Cassels Brock & Blackwell LLP acted as legal advisors to Eastmain. Computershare Trust Company of Canada acted as transfer agent for Auryn Resources. Laurel Hill Advisory Group acted as proxy agent for Eastmain.