The share price of Vancouver’s Auryn Resources (TSX:AUG) increased more than 15% January 9 after the company announced an investment agreement with Goldcorp.
The agreement will see the giant take a 12.5% stake in Auryn for $41.2 million.
During lunchtime trade the Vancouver-based junior was exchanging hands at $3.56 a share, up 16.7% on the TSX exchange in heavier than usual volumes. Auryn is now worth $240 million in Toronto where it listed in October last year. gaining 20.3% year to date.
In a statement, Auryn said that the companies have also "entered into an Investor Rights and Obligations Agreement whereby, as long as Goldcorp maintains a 5% or greater equity ownership interest in Auryn, “Goldcorp will have the right to participate in future Auryn equity issues in the amount necessary to maintain up to a 12.5% interest.”
Auryn president and CEO Shawn Wallace the deal is expected to close this month and Auyrn "is now fully funded to complete one of the most extensive, globally significant exploration programs in 2017. The program will include a planned 55,000 meters of exploration drilling across six projects in Canada and Peru".
Wallace and executive chairman Ivan Bebek formed Auryn in 2013 with a technical and executive team drawn from Asanko Gold (formerly Keegan Resources) which brought its 190koz-a-year mine in Ghana to commercial production in April last year and Cayden Resources, sold to Agnico Eagle in 2014 for $205 million.
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