Fury Gold Mines : Q4 report for the period ending Dec 31, 2023 FS

(An exploration company)

CONSOLIDATED

FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2023

Fury Gold Mines Limited

Consolidated Statements of Financial Position (Expressed in thousands of Canadian dollars)

		At December 31		At December 31
	Note		2023		2022
Assets
Current assets:
Cash	7	$	7,313	$	10,309
Marketable securities	8		1,166		582
Accounts receivable			374		369
Prepaid expenses and deposits			592		602
			9,445		11,862
Non-current assets:
Restricted cash	7		144		144
Prepaid expenses and deposits			111		42
Property and equipment	9		588		931
Mineral property interests	10		142,639		145,190
Investments in associates	11		36,248		42,430
			179,730		188,737
Total assets		$	189,175	$	200,599
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities		$	1,034	$	1,148
Lease liability			154		160
Flow-through share premium liability	12		544		-
			1,732		1,308
Non-current liabilities:
Lease liability			74		227
Provision for site reclamation and closure	13		4,495		4,271
Total liabilities		$	6,301	$	5,806
Equity:
Share capital	15	$	310,277	$	306,328
Share option and warrant reserve	16		21,660		20,309
Accumulated other comprehensive loss			(9)		(3)
Deficit			(149,054)		(131,841)
Total equity		$	182,874	$	194,793
Total liabilities and equity		$	189,175	$	200,599

Commitments (notes 11(b), 20); Subsequent events (note 23).

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 consolidated financial statements.

Fury Gold Mines Limited

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Fury Gold Mines Limited

Consolidated Statements of (Earnings) Loss and Comprehensive (Income) Loss (Expressed in thousands of Canadian dollars, except per share amounts)

			Years ended December 31
	Note		2023		2022
Operating expenses:
Exploration and evaluation	14	$	9,311	$	9,217
Fees, salaries and other employee benefits			2,630		3,199
Insurance			646		728
Legal and professional			863		804
Marketing and investor relations			737		809
Office and administration			384		398
Regulatory and compliance			275		218
			14,846		15,373
Other (income) expense, net:
Net gain on disposition of mineral interests	6 & 10		(468)		(48,390)
Losses on marketable securities	8		655		135
Net loss from associates	11		6,182		5,880
Amortization of flow-through share premium	12		(3,345)		(3,124)
Impairment expense	11		-		5,506
Accretion on provision for site reclamation and closure	13		148		94
Interest expense			61		115
Interest income			(590)		(228)
Foreign exchange loss			13		9
Other			-		(91)
			2,656		(40,094)
(Earnings) loss before taxes			17,502		(24,721)
Income tax recovery	5d		(289)		(187)
Net (earnings) loss for the year			17,213		(24,908)
Other comprehensive loss, net of tax
Unrealized currency loss on translation of			6		3
foreign operations	3s
Total comprehensive (income) loss for the year		$	17,219	$	(24,905)
(Earnings) loss per share:
Basic and diluted (earnings) loss per share	19		$ 0.12		$ (0.18)

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

Fury Gold Mines Limited

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Fury Gold Mines Limited

Consolidated Statements of Equity

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

					Share	Accumulated
	Number of				option and		other
	common		Share		warrant	comprehensive
	shares		capital		reserve		loss		Deficit		Total
Balance at December 31, 2021	125,720,950	$	295,464	$	18,640	$	-	$	(156,749)	$	157,355
Comprehensive income (loss) for the year	-		-		-		(3)		24,908		24,905
Shares issued pursuant to offering, net of
share issue costs	13,750,000		10,864		-		-		-		10,864
Share-based compensation	-		-		1,669		-		-		1,669
Balance at December 31, 2022	139,470,950	$	306,328	$	20,309	$	(3)	$	(131,841)	$	194,793
Comprehensive loss for the year	-		-		-		(6)		(17,213)		(17,219)
Shares issued pursuant to offering, net of
share issue costs (note 15b(i))	6,076,500		3,949		-		-		-		3,949
Share-based compensation (note 16a)	197,345		-		1,351		-		-		1,351
Balance at December 31, 2023	145,744,795	$	310,277	$	21,660	$	(9)	$	(149,054)	$	182,874

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

Fury Gold Mines Limited

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Fury Gold Mines Limited

Consolidated Statements of Cash Flows (Expressed in thousands of Canadian dollars)

			Years ended December 31
	Note		2023		2022
Operating activities:
Earnings (loss) for the year		$	(17,213)	$	24,908
Adjusted for:
Interest income			(590)		(228)
Items not involving cash:
Net gain on disposition of mineral interests	6 & 10		(468)		(48,390)
Losses on marketable securities	8		655		135
Depreciation	9		343		341
Impairment expense	11		-		5,506
Net loss from associates	11		6,182		5,880
Amortization of flow-through share premium	12		(3,345)		(3,124)
Accretion of provision for site reclamation and closure	13		148		94
Share-based compensation	16		1,351		1,669
Interest expense			61		100
Other			-		-
Changes in non-cash working capital	18		(184)		(903)
Cash used in operating activities			(13,060)		(14,012)
Investing activities:
Interest income			590		228
Acquisition of mineral interests, net of cash acquired	10		-		(1,281)
Acquisition of Eastmain Resources Inc, net of cash acquired			-		-
Option payment received	10		125		310
Acquisition of Universal Mineral Services Ltd	11		-		(1)
Acquisition of Homestake Ridge royalty, inclusive of fees			-		-
Proceeds from disposition of mineral interests, net of	6		1,350		4,479
transaction costs
Proceeds from disposition of investment in associate, net of	11		-		6,774
transaction costs
Proceeds from sale of marketable securities	8		381		-
Property and equipment additions, net of disposals			-		-
Marketable securities additions	8		-		(60)
Decrease (increase) in restricted cash	7		-		(14)
Cash provided by used in investing activities			2,446		10,435
Financing activities:
Proceeds from issuance of common shares, net of costs	15		7,838		10,864
Lease payments			(214)		(235)
Proceeds from share option and warrant exercises	16		-		-
Cash provided by financing activities			7,624		10,629
Effect of foreign exchange on cash			(6)		(2)
Increase (decrease) in cash			(2,996)		7,050
Cash, beginning of the year			10,309		3,259
Cash, end of the year	7	$	7,313	$	10,309

Supplemental cash flow information (note 18).

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

Fury Gold Mines Limited

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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 December 31, 2023, the Company had two principal projects: Eau Claire in Quebec and Committee Bay in Nunavut. At December 31, 2023, the Company held a 50.022% interest in the Eleonore South Joint Venture ("ESJV"), which was then increased to 100% as part of a transaction that closed on February 29, 2024.

Sale of Homestake Resources Corporation ("Homestake Resources")

On December 6, 2021, the Company entered into a definitive agreement (the "Purchase Agreement") with Dolly Varden Silver Corporation ("Dolly Varden") pursuant to which the Company agreed to sell to Dolly Varden a 100% interest in Fury Gold's wholly owned subsidiary, Homestake Resources in exchange for $5,000 in cash and 76,504,590 common shares in Dolly Varden. Homestake Resources is the owner of a 100% interest in the Homestake Ridge gold-silver project which is located adjacent to the Dolly Varden Project owned by Dolly Varden in the Golden Triangle, British Columbia ("the Dolly Varden Transaction"). The Dolly Varden Transaction completed on February 25, 2022. As a result, Fury acquired the 76,504,590 Dolly Varden Shares on February 25, 2022, representing approximately 35.33% of the Dolly Varden Shares outstanding and 32.88% of Dolly Varden on a fully diluted basis as of that date.

In connection with the Dolly Varden Transaction and as contemplated in the Purchase Agreement, Dolly Varden and Fury Gold have also entered into an investor rights agreement dated February 25, 2022 (the "Investor Rights Agreement"). Pursuant to its obligations under the Investor Rights Agreement, Dolly Varden has appointed Forrester "Tim" Clark, the Chief Executive Officer ("CEO") of Fury Gold, and Michael Henrichsen, the Chief Geological Officer of Fury Gold, to the board of directors of Dolly Varden.

1. On October 13, 2022, the Company announced that it had completed a non-brokered sale agreement to sell 17,000,000 common shares of Dolly Varden at $0.40 per share, representing approximately 7.4% of the outstanding common shares (note 11). The net proceeds received by the Company upon close of the transaction was $6,774. As of December 31, 2023, the Company held a 22.03% interest in Dolly Varden.
2. On March 12, 2024, the Company sold 5,450,000 common shares of Dolly Varden at $0.735 per Share for gross proceeds of $4,006, thus reducing its position to 19.99% of Dolly Varden, and decreasing its right to one director on Dolly Varden under its Investors Rights Agreement, to which notice have been given. (Note 23g)

Acquisition of 25% equity interest in Universal Mineral Services Ltd. ("UMS")

On April 1, 2022, the Company purchased a 25% share interest in UMS, a private shared-services provider for nominal consideration. The remaining 75% of UMS is owned equally by three other junior resource issuers, namely Tier One Silver Inc, Coppernico Metals Inc, and Torq Resources Inc. who share a head office location in Vancouver, BC. Previously, UMS had been privately owned by a director in common, Mr. Ivan Bebek, then subsequently from January 1, 2022, by Mr. Steve Cook, another director in common, until March 31, 2022.

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. Having these services available through UMS, on an as needed basis, allows the Company to maintain a more efficient and cost-effective corporate overhead structure by hiring fewer full-time employees and engaging outside professional advisory firms less frequently. The agreement has an indefinite term and can be terminated by either party upon providing 180 days notice.

Fury Gold Mines Limited

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Notes to the 2023 Consolidated Financial Statements

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

Increase in ownership interest of Éléonore South Joint Venture ("ESJV") and amended joint venture arrangement

On September 12, 2022, the Company and its joint operation partner Newmont Corporation ("Newmont"), through their respective subsidiaries, completed the acquisition of the remaining approximately 23.77% participating interest of Azimut Exploration Inc. in the ESJV, on a pro-rata basis. As a result of the transaction, the 100% ESJV participating interests at December 31, 2022 and 2023 were held 50.022% by the Company and 49.978% by Newmont, with Fury Gold remaining operator under an amended and restated joint operating agreement.

Subsequent to December 31, 2023, the Company and its joint operation partner Newmont Corporation ("Newmont"), through their respective subsidiaries, entered into a new agreement whereby the Company acquired 100% control of the interests, consolidating these properties into the Company's portfolio. The transaction closed on February 29, 2024 (note 23d).

Note 2: Basis of presentation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), effective for the year ended December 31, 2023. IFRS comprises IFRSs, International Accounting Standards ("IASs"), and interpretations issued by the IFRS Interpretations Committee ("IFRICs"), and the former Standing Interpretations Committee ("SICs").

These consolidated financial statements were approved and authorized for issuance by the Board of Directors of the Company on April 2, 2024.

Note 3: Material Accounting Policy Information

a) Basis of measurement

These consolidated financial statements have been prepared on a historical cost basis, except for those assets and liabilities that are measured at revalued amounts or fair values at the end of each reporting period.

b) Currency of presentation

The Company's presentation currency is the Canadian ("CAD") dollar. All amounts, with the exception of per share amounts, are expressed in thousands of Canadian dollars, unless otherwise stated. References to US$ are to United States ("US") dollars.

c) Basis of preparation and consolidation

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has power over an investee, when the Company is exposed, or has rights, to variable returns from the investee and when the Company has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. All intercompany balances and transactions have been eliminated.

The subsidiaries (with a beneficial interest of 100%) of the Company as at December 31, 2023 were as follows:

Subsidiary	Place of	Functional
incorporation	currency
Eastmain Mines Inc. ("Eastmain Mines") (a)	Canada	CAD
Eastmain Resources Inc. ("Eastmain")	ON, Canada	CAD
Fury Gold USA Limited ("Fury Gold USA") (b)	Delaware, U.S.A.	USD
North Country Gold Corp. ("North Country")	BC, Canada	CAD

1. The entity is incorporated federally in Canada.

Fury Gold Mines Limited

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Notes to the 2023 Consolidated Financial Statements

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

1. Fury Gold USA provided certain administrative services with respect to employee benefits for US resident personnel.

Investments in associates and joint arrangements

These consolidated financial statements also include the following joint arrangements and investments in associates:

Associates and joint	Ownership interest	Location	Classification and
arrangement	accounting method
Dolly Varden	22.030%	BC, Canada	Associate; equity method
UMS	25.000%	BC, Canada	Associate; equity method
ESJV	50.022%	Quebec, Canada	Joint operation

d) Foreign currency translation

The financial statements of the Company and each of its subsidiaries are prepared in its functional currency determined on the basis of the currency of the primary economic environment in which such entities operate. The presentation and functional currency of the Company and each of its subsidiaries, with the exception of Fury Gold USA, is the Canadian dollar. Fury Gold USA's functional currency has been determined to be the US dollar.

Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing at the transaction dates. At each reporting date, monetary items denominated in foreign currencies are translated into the entity's functional currency at the then prevailing rates and non-monetary items measured at historical cost are translated into the entity's functional currency at rates in effect at the date the transaction took place.

Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are included in the consolidated statements of loss and comprehensive loss for the period in which they arise.

e) Cash and cash equivalents

Cash and cash equivalents consist of cash and highly liquid short-term investments that are readily convertible to cash and have maturities with terms of less than ninety days and/or with original maturities over ninety days but redeemable on demand without penalty. As at December 31, 2023 and 2022, the Company did not have any cash equivalents.

f) Property and equipment

Property and equipment are stated at cost less accumulated amortization and impairment losses. Amortization is calculated using the straight-line method over the estimated useful lives as follows:

•	Computer equipment	3 years
•	Machinery and equipment	5-10 years
•	Right-of-use ("ROU") assets	the lease term, unless the transfer of the asset ownership is reasonably
		certain at the end of the lease term, whereupon depreciation is over the
		useful life.

g) Mineral property interests and exploration expenditures

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing historical characteristic of many properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties is in good standing.

The Company accounts for mineral property interests in accordance with IFRS 6 - Exploration for and evaluation of mineral properties ("IFRS 6").

Fury Gold Mines Limited

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Notes to the 2023 Consolidated Financial Statements

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

Costs directly related to acquiring the legal right to explore a mineral property including acquisition of licenses, mineral rights, and similar acquisition costs are recognized and capitalized as mineral property interests. Acquisition costs incurred in obtaining the legal right to explore a mineral property are deferred until the legal right is granted and thereon reclassified to mineral property interests. Transaction costs incurred in acquiring an asset are deferred until the transaction is completed and then included in the purchase price of the asset acquired.

Once the legal right to explore a property has been acquired, costs directly related to exploration and evaluation activities including, but not limited to, researching and analyzing existing exploration data, conducting geological studies, exploration drilling and sampling, and payments made to contractors and consultants in connection with the exploration and evaluation of the property, are expensed in the period in which they are incurred as exploration and evaluation costs on the consolidated statements of loss and comprehensive loss.

Costs not directly attributable to exploration and evaluation activities, including general administrative overhead costs, are expensed as administrative costs in the period in which they occur.

As the Company currently has no operational income, any incidental revenues earned in connection with exploration activities are applied as a reduction to exploration and evaluation costs.

When a project is deemed to no longer have commercially viable prospects to the Company, all capitalized acquisition costs in respect of that project are deemed to be impaired. As a result, those costs, in excess of the estimated recoverable amount, are expensed to the consolidated statements of loss and comprehensive loss.

The Company assesses mineral property interests for impairment when facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount. The recoverable amount is the higher of the asset's fair value less costs to sell and its value in use.

Once the technical feasibility and commercial viability of extracting the mineral resources has been determined, the property is considered to be a mine under development at which point the assets and further related costs no longer fall under the guidance of IFRS 6.

(h) Joint arrangement

The Company conducts a portion of its business through a joint arrangement where the parties are bound by contractual arrangements establishing joint control with decisions about the relevant activities that significantly affect the returns of the investee requiring unanimous consent. A joint arrangement is classified as either a joint operation or a joint venture, subject to the terms that govern each investor's rights and obligations in the arrangement.

In a joint operation, the investor has rights and obligations to the separate assets and liabilities of the investee, therefore the Company recognizes its share of the assets, liabilities, revenue, and expenses of the joint arrangement.

(i) Investments in associates

The Company conducts a portion of its business through equity interests in associates. An associate is an entity over which the Company has significant influence and is neither a subsidiary nor a joint venture. The Company has significant influence when it has the power to participate in the financial and operating policy decisions of the associate but does not have control or joint control over those policy decisions.

The Company accounts for its investments in associates using the equity method. Under the equity method, the Company's investment in an associate is initially recognized at cost and subsequently increased or decreased to recognize the Company's share of earnings and losses of the associate, after any adjustments necessary to give effect to uniform accounting policies, and for impairment losses after the initial recognition date. The Company's share of an associate's losses that are in excess of its investment in the associate are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate. The Company's share of earnings and losses of its associate are recognized in net (earnings)/loss during the period.

Fury Gold Mines Limited

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Notes to the 2023 Consolidated Financial Statements

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

j) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets to determine whether there are any indicators of impairment. If any such indicator exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any.

Where the asset does not generate cash inflows that are independent from other assets, the Company estimates the recoverable amount of the Cash Generating Unit ("CGU") to which the asset belongs. Any intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired. An asset's recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or CGU is estimated to be less than its carrying amount, the carrying amount is reduced to the recoverable amount and an impairment loss is recognized immediately in the consolidated statements of loss and comprehensive loss. Where an impairment subsequently reverses, the carrying amount is increased to the revised estimate of recoverable amount but only to the extent that this does not exceed the carrying value that would have been determined if no impairment had previously been recognized. A reversal of impairment is recognized in the consolidated statements of (earnings) loss and comprehensive (income) loss.

k) Leases

The Company assesses if a contract is or contains a lease at inception of the contract. Control is considered to exist if the contract conveys the right to control the use of an identified asset during the term of the lease. When a lease is identified, a right-of-use asset and a corresponding lease liability are recognized, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognizes the lease payments as an expense in profit or loss on a straight-line basis.

Right-of-use assets, which are included in property and equipment, are recognized at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs and decommissioning and restoration costs, less any lease incentives received. Right- of-use assets are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis, except where ownership is expected to be transferred at the end of the lease, whereby the asset is depreciated over its useful life.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted by using the rate implicit in the lease or the Company's incremental borrowing rate, if the rate implicit in the lease cannot be determined. Lease payments included in the measurement of the lease liability are:

1. • fixed payments (including in-substance fixed payments), less any lease incentives receivable;
   • variable payments that depend on an index or rate;
   • amount expected to be payable by the lessee under residual value guarantees;
   • exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
   • penalties for terminations, unless the Company is reasonably certain the options will not be exercised.
2. Provisions

Provisions are recorded when a present legal or constructive obligation exists as a result of past events where it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made.

Fury Gold Mines Limited

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Notes to the 2023 Consolidated Financial Statements

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