Big news out of the junior mining sector today as Auryn Resources (AUG:TSXV) and North Country Gold (NCG:TSXV) have reached a joint venture agreement on the Committee Bay project in Nunavut, Canada.

The market likes the deal so far sending Auryn shares 16% higher to $1.29 and North Country up 114% to $0.075.

The deal appears to be a win/win for both companies. Auryn was a cash rich shell well funded with ~$8 million that was looking to acquire/option an asset for the last several months. North Country was in a tough financial position with only $78,468 in cash as of November 30th but has an exciting 300 km prospective land position.

The team at Auryn led by Shawn Wallace and Ivan Bebek are coming off the successful recent sale of explorer Cayden Resources to Agnico-Eagle last fall. Cayden was the second transaction after Keegan (now Asanko) for the young guns Mr. Bebek and Mr. Wallace. These two men have arguably the best track record in the Canadian mining space for their age.

The deal involves:

• Auryn has the option to spend $6 million for a 51% interest to earn a 51% interest in the Committee Bay project.
• $500,000 is guaranteed once the definitive option agreement is signed.
• A technical team will be formed to jointly plan and oversee exploration programs.
• Auryn will have the final discretion over exploration issues and will become the project operator.
• Once the agreement is signed Auryn will purchase 10 million North Country shares at 5 cents ($500,000) as part of a non brokered private placement

Shawn Wallace, President and CEO of Auryn stated, “We are very pleased to have successfully formed a working relationship with North Country. The opportunity to leverage the large amount of quality exploration work completed to date in order to exploit the exploration potential of this highly productive, prolific high grade gold district presents an excellent opportunity for value creation that will benefit both companies’ shareholders. Entering into this agreement also signifies Auryn’s first step at realizing its aspirations of becoming a formidable high grade gold exploration and development company in the Americas.”

Once the deal closes the two partners will together be able to explore the 300km land position that is historically under explored and has over 50 gold occurrences and a historical gold deposit at Three Bluffs. The Three Bluffs deposi is a high grade deposit with an NI-43101 resource of 683,000 ounces @4.91 g/t of indicated gold and 965,000 inferred ounces @ 5.43 g/t gold.

CEO.ca reached out to Auryn and they commented that the deal had everything they wanted in an joint venture.

• A large land position which is under explored (district scale exploration upside).
• A high grade asset.
• A mining friendly jurisdiction with majors in the area.

They also mentioned that North Country has already spent 20 years and $80 million on the project. North Country also owns 4 drills plus millions in equipment and infrastructure already in place.

The three points above mentioned to me by Auryn are exactly the same as the features they had in Cayden which lead to a $205 million dollar deal last fall.

I will definitely be following the story at Auryn and North Country and will have both companies on my watchlist.

Read: Auryn Resources and North Country Gold to jointly explore the high-grade Committee Bay Gold Belt

This is not investment advice.All facts are to be checked and verified by reader. As always please do your own due diligence.