Fury Gold Mines (FURY) - 2025 Q2 - Quarterly Report

Condensed Interim Consolidated Financial Statements This section presents the company's financial position, performance, equity changes, and cash flows for the interim period, highlighting key financial trends Condensed Interim Consolidated Statements of Financial Position The Company's financial position at June 30, 2025, shows an increase in total assets and equity compared to December 31, 2024, primarily driven by higher cash balances and mineral property interests, while total liabilities decreased Condensed Interim Consolidated Statements of Financial Position (CAD thousands) | Metric | June 30, 2025 (CAD thousands) | December 31, 2024 (CAD thousands) | Change (CAD thousands) | Percentage Change | | :-------------------------------- | :------------------------------ | :-------------------------------- | :--------------------- | :------------------ | | Total Assets | 91,522 | 85,112 | 6,410 | 7.53% | | Cash | 8,566 | 4,912 | 3,654 | 74.39% | | Mineral Property Interests | 50,158 | 45,200 | 4,958 | 10.97% | | Total Liabilities | 6,388 | 6,909 | (521) | -7.54% | | Total Equity | 85,134 | 78,203 | 6,931 | 8.86% | Condensed Interim Consolidated Statements of Loss and Comprehensive Loss The Company reported a decreased net loss for the three months ended June 30, 2025, but an increased net loss for the six months ended June 30, 2025, compared to the prior year, largely influenced by a significant increase in exploration and evaluation costs Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (CAD thousands) | Metric | Three months ended June 30, 2025 (CAD thousands) | Three months ended June 30, 2024 (CAD thousands) | Six months ended June 30, 2025 (CAD thousands) | Six months ended June 30, 2024 (CAD thousands) | | :-------------------------------------- | :----------------------------------------------- | :----------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Loss for the period | 1,996 | 3,496 | 4,988 | 4,208 | | Total Comprehensive Loss for the period | 1,998 | 3,497 | 4,992 | 4,210 | | Exploration and Evaluation Costs | 3,033 | 1,685 | 5,194 | 2,476 | | Basic and Diluted Loss per Share | 0.01 | 0.02 | 0.03 | 0.03 | - Exploration and evaluation costs increased significantly by 80% for the three months and 110% for the six months ended June 30, 2025, compared to the same periods in 2024[6] Condensed Interim Consolidated Statements of Equity The Company's total equity increased from December 31, 2024, to June 30, 2025, primarily due to significant increases in share capital from new issuances related to the QPM acquisition, private placements, and flow-through share offerings, despite an increase in the accumulated deficit Condensed Interim Consolidated Statements of Equity (CAD thousands) | Equity Component | June 30, 2025 (CAD thousands) | December 31, 2024 (CAD thousands) | Change (CAD thousands) | | :--------------------------- | :---------------------------- | :-------------------------------- | :--------------------- | | Share Capital | 323,382 | 312,723 | 10,659 | | Share Option and Warrant Reserve | 23,948 | 22,684 | 1,264 | | Accumulated Other Comprehensive Loss | (16) | (12) | (4) | | Deficit | (262,180) | (257,192) | (4,988) | | Total Equity | 85,134 | 78,203 | 6,931 | - Share capital increased by $10,659 thousands, driven by shares issued for the QPM Acquisition ($4,503 thousands), private placement ($3,571 thousands), and flow-through share offering ($2,457 thousands)[8] Condensed Interim Consolidated Statements of Cash Flows The Company experienced a significant increase in cash from financing activities for the six months ended June 30, 2025, which offset increased cash usage in operating activities and contributed to a substantial overall increase in cash Condensed Interim Consolidated Statements of Cash Flows (CAD thousands) | Cash Flow Activity | Six months ended June 30, 2025 (CAD thousands) | Six months ended June 30, 2024 (CAD thousands) | | :----------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Cash used in operating activities | (7,061) | (3,158) | | Cash provided by (used in) investing activities | 3,362 | (101) | | Cash provided by financing activities | 7,357 | 4,471 | | Increase (decrease) in cash | 3,654 | 1,210 | | Cash, end of period | 8,566 | 8,523 | - Cash provided by financing activities increased by $2,886 thousands (64.5%) for the six months ended June 30, 2025, primarily from proceeds from financing and flow-through shares[10] - Investing activities shifted from a cash usage of $101 thousands in 2024 to a cash provision of $3,362 thousands in 2025, largely due to proceeds from the disposition of investment in associate[10] Notes to the Q2 2025 Condensed Interim Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed interim consolidated financial statements, covering operations, accounting policies, acquisitions, investments, and financial risks Note 1: Nature of operations Fury Gold Mines Limited is a Canadian exploration company focused on acquiring and exploring resource projects in Canada, with key projects in Nunavut and Quebec, recently consolidating its ownership of the Éléonore South project and holding strategic investments in other mining entities - The Company's principal business activity is the acquisition and exploration of resource projects in Canada[13] - At June 30, 2025, Fury Gold had three principal projects: Committee Bay (Nunavut), and Eau Claire and Éléonore South (Quebec), with 100% ownership of the latter two after acquiring Newmont Corporation's interest in February 2024[13] - The Company holds a 13.51% common share interest in Dolly Varden Silver Corporation and a 25% interest in Universal Mineral Services Limited (UMS)[13] Note 2: Basis of presentation These interim financial statements adhere to IAS 34 and consolidate the Company's 100% owned subsidiaries, including Quebec Precious Metals Corporation (QPM) from its acquisition date, operating in two segments: mineral resource properties and administrative/corporate, with a new accounting policy for government grants adopted in Q2 2025, and evaluation of new IFRS standards underway - The unaudited condensed interim consolidated financial statements are prepared in accordance with IAS 34 Interim Financial Reporting[14] - The Company consolidates its 100% owned subsidiaries, including Quebec Precious Metals Corporation (QPM) from its acquisition date of April 28, 2025[15][16][17] - A new accounting policy for government grants was adopted in Q2 2025, recognizing grants when compliance with conditions and receipt are reasonably assured[23] - The Company is currently evaluating the impact of new accounting standards, IFRS 18 (effective January 1, 2027) and amendments to IFRS 9 and IFRS 7 (effective January 1, 2026), on its financial statements[25][26] Note 3: Revision of prior period financial statements The Company revised its previously issued unaudited interim financial statements for periods ended March 31, 2024, and September 30, 2024, to correct errors related to gain/loss on investments and investments in associates, specifically an understatement of dilution gains and investment in Dolly Varden - Errors were identified in previously issued unaudited condensed interim consolidated financial statements for periods ended March 31, 2024, and September 30, 2024[27] - The errors resulted in a misstatement of gain/loss on investments and investments in associates relating to the Company's investment in Dolly Varden, specifically an understatement of dilution gains and investment in associate[27] Revision of Prior Period Financial Statements (CAD thousands) | Metric (CAD thousands) | As reported (June 30, 2024) | Adjustment | Revised (June 30, 2024) | | :--------------------- | :-------------------------- | :--------- | :---------------------- | | Gain on investments | (537) | (220) | (757) | | Net loss | 4,428 | (220) | 4,208 | | Total comprehensive loss | 4,430 | (220) | 4,210 | Note 4: Acquisition of Quebec Precious Metals Corporation On April 28, 2025, Fury Gold acquired all common shares of Quebec Precious Metals Corporation (QPM) for a total consideration of $5,482 thousands, accounted for as an asset acquisition, bringing a significant land package in Quebec, including gold, lithium, and rare earths projects, to Fury Gold's portfolio - The Company acquired all issued and outstanding common shares of Quebec Precious Metals Corporation (QPM) on April 28, 2025[28] Purchase Price Component (CAD thousands) | Purchase Price Component (CAD thousands) | Amount | | :--------------------------------------- | :----- | | Cash consideration | 750 | | Fair value of common shares issued | 4,533 | | Transaction costs | 199 | | Total Purchase Price | 5,482| - The QPM Acquisition was accounted for as an asset acquisition, not a business combination[31] - QPM holds a land package in Quebec, including the Sakami gold project, Ninaaskuwin lithium showing, and a 68% interest in the Kipawa rare earths project[31] Note 5: Marketable securities The Company's marketable securities decreased to $2,093 thousands at June 30, 2025, from $2,358 thousands at December 31, 2024, primarily due to the sale of Sirios Resources Inc. common shares, partially offset by a net unrealized gain Marketable Securities (CAD thousands) | Metric (CAD thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Balance of Marketable Securities | 2,093 | 2,358 | - During the period from December 31, 2024, to June 30, 2025, the Company sold marketable securities for $613 thousands, recognized a realized gain of $47 thousands, and an unrealized net gain of $301 thousands[33] - The Company acquired a 10.9% ownership in Sirios Resources Inc. for $1,300 thousands in February 2024, but subsequently lowered its holdings to less than 9.9% by June 30, 2025, through sales[33][34] Note 6: Other investments The Company holds a $2,063 thousands investment in Series C Preferred Shares of Alsym Energy Inc., acquired in August 2024, which is classified as Level 3 in the fair value hierarchy and is revalued at fair value through profit and loss at each reporting date - The Company purchased 764,993 Series C Preferred Shares of Alsym Energy Inc. for $2,063 thousands on August 13, 2024[35] - This investment is classified as Level 3 in the fair value hierarchy and is accounted for at fair value, revalued through profit and loss at each reporting date[35] Note 7: Mineral property interests The carrying amount of the Company's mineral property interests increased to $50,158 thousands at June 30, 2025, primarily due to additions from the QPM acquisition, following the acquisition of 100% control of the Éléonore South project and a significant impairment charge in 2024 to align with market capitalization Mineral Property Interests (CAD thousands) | Metric (CAD thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Balance of Mineral Property Interests | 50,158 | 45,200 | - Additions of $5,436 thousands to mineral property interests during the six months ended June 30, 2025, were primarily due to the QPM acquisition[36] - On February 29, 2024, the Company acquired 100% control of the Éléonore South project from Newmont for $3,000 thousands[36] - An impairment charge of $100,873 thousands was recognized in 2024 to align the carrying value of mineral properties with the Company's market capitalization[36][38] Note 8: Investments in associates The Company's investments in associates, Dolly Varden and UMS, decreased in carrying amount to $27,421 thousands at June 30, 2025, mainly due to the Company's share of net losses and dispositions, partially offset by dilution gains, as the Company continues to sell shares in Dolly Varden and utilizes UMS for shared services Investments in Associates (CAD thousands) | Metric (CAD thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Carrying amount of Investments in Associates | 27,421 | 29,456 | - For the six months ended June 30, 2025, the Company's share of net loss from associates was $(1,787) thousands, dispositions were $(2,216) thousands, and dilution gains were $1,968 thousands[40] - The quoted fair market value of the Company's equity interest in Dolly Varden at June 30, 2025, was $53,642 thousands[40] - On May 8, 2025, the Company sold 1,000,000 common shares of Dolly Varden for gross proceeds of $3,625 thousands[42] - The Company incurred $205 thousands in transactions with UMS for exploration and evaluation costs and general and administration for the six months ended June 30, 2025[45] Note 9: Deferred government grant The Company received a $50 thousands grant from the Government of Quebec via the QPM acquisition and an additional $83 thousands payment in May 2025, designated for geometallurgical studies on the Elmer East property, while the Government of Nunavut approved a $250 thousands contribution for exploration activities, which has not yet been received or recognized - The Company inherited a $50 thousands grant from the Government of Quebec as part of the QPM acquisition and received a second payment of $83 thousands on May 30, 2025[48] - The Quebec grant funds up to 50% of exploration expenses for geometallurgical studies on the Elmer East property, with a maximum grant of $333 thousands[48] - As of June 30, 2025, the Company incurred $172 thousands in eligible exploration expenses under the Quebec grant, with $47 thousands in funding remaining[48] - The Government of Nunavut approved a contribution of up to $250 thousands for exploration activities in the Three Bluffs Gold deposit and Raven Gold Prospect, but no initial payment has been received or recognized as of June 30, 2025[50] Note 10: Flow-through share premium liability The Company issued 3,999,701 flow-through shares in June 2025, raising $3,080 thousands for mineral exploration, with expenditures committed by December 31, 2026, and the flow-through share premium liability decreased to $400 thousands at June 30, 2025, reflecting the amortization of the premium as eligible expenditures were incurred - On June 19, 2025, the Company issued 3,999,701 flow-through shares, raising $3,080 thousands for mineral exploration activities, with a commitment to incur these expenditures by December 31, 2026[52] - The flow-through share premium liability decreased from $944 thousands at December 31, 2024, to $400 thousands at June 30, 2025, due to the amortization of the premium as eligible expenditures were incurred[53] - The $5,001 thousands in flow-through proceeds raised in June 2024 were fully incurred as of April 30, 2025[53] Note 11: Segmented information - Exploration and evaluation costs Total exploration and evaluation costs significantly increased for both the three and six months ended June 30, 2025, compared to the prior year, primarily driven by higher costs in Nunavut, particularly for fuel and consumables, and aircraft and travel, alongside increases in Quebec for assaying and exploration drilling Exploration and Evaluation Costs (CAD thousands) | Cost Category (CAD thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Exploration and Evaluation Costs | 3,033 | 1,685 | 5,194 | 2,476 | | Quebec Costs | 1,653 | 1,577 | 3,694 | 2,260 | | Nunavut Costs | 1,380 | 108 | 1,500 | 217 | - Nunavut's exploration and evaluation costs increased dramatically from $108 thousands to $1,380 thousands for the three months, and from $217 thousands to $1,500 thousands for the six months, primarily due to fuel and consumables, and aircraft and travel[54][55] - For the six months ended June 30, 2025, key cost drivers included fuel and consumables ($1,267 thousands), aircraft and travel ($984 thousands), and exploration drilling ($799 thousands)[55] Note 12: Other income Other income for the three and six months ended June 30, 2025, was $18 thousands, solely from government grant income, representing a significant decrease compared to the prior year, which included $566 thousands from excess fuel resold Other Income (CAD thousands) | Income Source (CAD thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Government grant income | 18 | - | 18 | - | | Excess fuel resold | - | 566 | - | 566 | | Total Other Income | 18 | 566 | 18 | 566 | - The decrease in other income is primarily due to the absence of income from excess fuel resold in 2025, which contributed $566 thousands in 2024[56] Note 13: Share capital The Company's share capital significantly increased during the six months ended June 30, 2025, driven by the issuance of common shares for the QPM acquisition, a non-brokered private equity placement, and a flow-through share offering, alongside shares issued from option exercises - The Company's authorized share capital consists of unlimited common shares without par value and unlimited preferred shares (nil issued)[57][58] - During the six months ended June 30, 2025, key share issuances included: 8,394,045 common shares for the QPM acquisition ($4,533 thousands fair value), 6,728,000 units (common shares and warrants) from a private equity placement ($4,306 thousands gross proceeds), and 3,999,701 flow-through shares ($3,080 thousands gross proceeds)[60][61] - 156,000 shares were issued from the exercise of share options, generating gross proceeds of $85 thousands[61] Note 14: Share-based compensation and warrant reserve Share-based compensation expense decreased for both the three and six months ended June 30, 2025, as the Company granted new share options, RSUs, and DSUs, and issued share purchase warrants in connection with the QPM acquisition and a private placement, significantly increasing the number of outstanding warrants Share-based Compensation Expense (CAD thousands) | Metric (CAD thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Total Share-based Compensation Expense | 189 | 399 | 371 | 652 | - The Company granted 140,000 share options to UMS employees and consultants for the six months ended June 30, 2025, and 282,470 replacement share options in connection with the QPM Acquisition[63][65] - As at June 30, 2025, 8,351,970 share options were outstanding with a weighted average exercise price of C$1.17[66] - The Company issued 590,000 DSUs and 1,142,500 RSUs on January 9, 2025, with 2,283,103 RSUs and DSUs outstanding at June 30, 2025[71][73] - 7,324,808 share purchase warrants were outstanding at June 30, 2025, with a weighted average exercise price of C$0.84, including 596,808 from the QPM acquisition and 6,728,000 from a private placement[74][75][76] Note 15: Key management personnel Total remuneration for key management personnel, including directors and executive officers, for the six months ended June 30, 2025, was $949 thousands, a slight decrease from the prior year, with share-based payments continuing to be a significant component of their compensation Key Management Personnel Remuneration (CAD thousands) | Remuneration Component (CAD thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Short-term benefits provided to executives | 261 | 217 | 527 | 433 | | Directors' fees paid to non-executive directors | 60 | 42 | 130 | 84 | | Share-based payments | 150 | 289 | 292 | 435 | | Total | 471 | 548 | 949 | 952 | - Key management personnel include Fury Gold's board of directors and certain executive officers (CEO, CFO, Senior VP, Exploration)[77] Note 16: Supplemental cash flow information Changes in non-cash working capital resulted in a cash outflow of $(339) thousands for the three months ended June 30, 2025, a reversal from an inflow in the prior year, and for the six months, it was an inflow of $251 thousands, a decrease from $457 thousands in 2024, primarily influenced by changes in accounts payable and receivables Changes in Non-Cash Working Capital (CAD thousands) | Component (CAD thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Accounts receivable | (50) | (141) | (166) | 196 | | Prepaid expenses and deposits | 219 | 225 | 7 | 226 | | Accounts payable and accrued liabilities | (472) | 210 | 446 | 35 | | Deferred government grant | (36) | - | (36) | - | | Changes in non-cash working capital | (339) | 294 | 251 | 457 | - The shift to a cash outflow from non-cash working capital for the three months ended June 30, 2025, was largely due to a decrease in accounts payable and accrued liabilities[80] Note 17: Loss per share Basic and diluted loss per share for the three months ended June 30, 2025, improved to $0.01 from $0.02 in the prior year, while remaining at $0.03 for the six-month period, with all outstanding share options and warrants being anti-dilutive due to the Company's net loss position Loss per Share (CAD thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss (CAD thousands) | 1,996 | 3,496 | 4,988 | 4,208 | | Weighted average basic number of shares outstanding | 160,905,042 | 146,514,842 | 156,427,445 | 146,514,842 | | Basic loss per share | 0.01 | 0.02 | 0.03 | 0.03 | | Diluted loss per share | 0.01 | 0.02 | 0.03 | 0.03 | - All outstanding share options and share purchase warrants were anti-dilutive for the periods ended June 30, 2025, and 2024, as the Company was in a loss position[81] Note 18: Financial instruments The Company's financial instruments include cash, marketable securities (Level 1 fair value), and other investments (Level 3 fair value), exposing it to liquidity, credit, and market risks (currency, interest rate, and price risk), with liquidity managed but future operating losses anticipated, and market risks not expected to have a material impact on net loss - The Company's financial instruments include cash, marketable securities, accounts receivable, other investments, deposits, and accounts payable and accrued liabilities[82] - Marketable securities are classified as Level 1 in the fair value hierarchy, while other investments are classified as Level 3[86] - The Company is exposed to liquidity risk, credit risk, and market risks (currency risk, interest rate risk, and price risk)[87] - At June 30, 2025, the Company had unrestricted cash of $8,566 thousands and a working capital surplus of $11,677 thousands, but expects to incur future operating losses with no source of operating cash flow[88] - A 10% increase or decrease in the US dollar to Canadian dollar exchange rate or in marketable securities share prices would not have a material impact on the Company's net loss[92][93]