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Aurania Resources is on the hunt for gold at its Lost Cities-Cutucu project in Ecuador

Snapshot

Far from being a treasure hunter, the company is led by a team of respected geologists with a track record of world-class discoveries under their belts

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Quick facts: Aurania Resources Ltd

Price: 3.75 CAD

TSX-V:ARU
Market: TSX-V
Market Cap: $163.5 m
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  • Flagship asset, the Lost Cities-Cutucu project, lies in eastern foothills of the Andes mountain range in southeastern Ecuador
  • Proven management team that discovered of much of the gold and copper resources in the adjacent Cordillera del Condor
  • Outperform rating by Noble Capital Markets based on ability to capture exploration value

What Aurania Resources does:

Aurania Resources Inc (CVE:ARU) (OTCQB:AUIAF) is a Toronto-based junior explorer with its flagship asset, the Lost Cities-Cutucu project in the eastern foothills of the Andes mountain range in southeastern Ecuador.

The mineral exploration company is engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper. 

The company’s origin story reads akin to something of a swashbuckling novel. Aurania’s entry into Ecuador was driven by colonial Spanish documents describing the “lost cities” of Logroño de los Caballeros and Sevilla de Oro – gold mines that operated between about 1562 and 1600. Today, Aurania’s management team believe that these “lost cities” are located within the firm’s large concession area.

Far from being a treasure hunter, the company is led by a team of respected geologists with a track record of world-class discoveries under their belts. CEO Keith Barron cofounded gold explorer Aurelian Resources, which discovered the Fruta del Norte gold deposit in 2006 and is currently being developed by Lundin Gold.

The Lost Cities-Cutucu project lies along-trend of a mineral belt that hosts a well-endowed mineral belt that contains 26 million ounces of gold and almost 40 billion pounds of copper in the Cordillera del Condor region of the country. Aurania’s aeromagnetic data indicates a similar granitic batholith beneath the central part the project area which, if proven, may have provided a similar source of porphyry, epithermal and skarn mineralization.

How is it doing:

In October, Aurania closed a financing that raised C$11.5 million to advance exploration work in Ecuador. The company said it plans to use the proceeds for exploration at Lost Cities-Cutucu as well as early-stage exploration at its adjacent Peru properties. 

Aurania started drilling on the highly prospective Tskenken N2 copper-silver target at Lost Cities-Cutucu in September and plans to ultimately move to Tsenken N3 at the project, which sits in the foothills of the Andes.

Recent exploration at Lost Cities-Cutucu identified 64 individual targets, 31 of which were categorized as high priority for follow-up.

Additional LiDAR (Light Detection and Ranging) data identified a potential new gold-bearing zone on the property. Data from the LiDAR survey pinpointed a system of vein-like features that are similar to areas of silver enrichment in soil samples taken from the Tiria South gold-silver target on the project, and if confirmed by follow-up fieldwork, the target would be a gold-bearing zone lying at depth.

The company has said it will prioritize Tiria South for follow-up exploration when its teams are able to return to the project site once coronavirus-related restrictions ease in Ecuador. Aurania plans to conduct more detailed mapping and sampling along with geophysics aimed at identifying silica related to epithermal veins.

It also revealed that LiDAR survey imagery has pinpointed what may be an ancient road from colonial Spanish times on its Lost Cities-Cutucu project in Ecuador. The group said the possible road must be verified and assessed in the field by an archaeologist once coronavirus-related restrictions are lifted in the project area.

Aurania has confirmed extensive high-grade copper and silver in the Tsenken B area of its Lost Cities-Cutucu project. The results extend from the mineralized fault breccia at the Tsenken A target around six kilometres to the north. The firm said it plans to drill “as soon as possible”.

The company also announced promising new data from the Kirus target at Lost Cities-Cutucu, which doubled the size of the area over which high-grade copper-silver was found. Samples taken from the Kirus target returned grades of up to 6.1% copper and 51 grams per ton silver.

On November 17, 2020, Aurania Resources reported that a copper-gold system seen in the Tsenken N2 target on the Lost Cities-Cutucu project extends into the Tsenken N3 target, forming part of a single iron oxide copper-gold (IOCG) target that spans over 20 square kilometres.

According to Aurania, the IOCG system on its flagship project in Ecuador is the first copper mineralization identified in the drill core.

And, on November 25, the company said it is planning an airborne magnetotelluric (Mobile MT) geophysical survey at its Lost Cities - Cutucu project in Ecuador in early December this year. 

It added that three drill holes had now been completed on the Tsenken N2 target as well as two at the Tsenken N3 target. It is expecting assay results from the three holes shortly. 

Inflection points:

  • Drill results from gold-silver epithermal targets
  • Develop joint ventures over parts of the 208,000-hectare property
  • Indentify specific targets at Kirus for scout drilling

What the broker says:

In a note on November 27, analysts at Noble Capital Markets commented on the Aurania management's belief the company is on the cusp of an iron oxide copper-gold system discovery in the Tsenken target area with each successive hole drilled moving toward the core of the system.  

“Aurania's exploration program has affirmed the discovery potential for multiple deposits at the Lost Cities project and yielded drilling targets for a variety of metals. We think the company's drilling program could provide catalysts for the stock assuming favorable outcomes,” the analysts said.

They pointed out that Aurania Resources represents a potentially high-risk, high-reward investment opportunity that hinges, in part, on management's ability to discover economically-recoverable mineral resources within the Lost Cities-Cutucu project area.

The analysts reiterated an Outperform rating on the stock with a US$4.00 per share price target, which they said is influenced, in part, by changes in the multiple, or value, that investors are placing on Aurania's and a comparable group's exploration efforts to date.

What the boss says:

Keith Barron, Aurani's CEO, has declared that he is pleased to have drilling underway at its Tsenken N2 target.

"The man-portable rig was airlifted to the first drill platform by helicopter last week and drilling started on Sunday," Barron said in a recent statement.

"The light-weight rig has the capacity to drill to 800m (2,400 feet) so that each drill hole can test both cylindrical porphyry targets as well as enclosing sheet-like sedimentary-hosted copper-silver targets. The first drill holes are planned to a depth of approximately 400m (1,200 feet). After drilling three to five holes at Tsenken N2, the plan is to move the rig to test the Tsenken N3 target," he added.

Contact Sean at [email protected]

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Aurania Resources planning an airborne geophysical survey at its...

Aurania Resources Ltd (CVE:ARU) (OTCQB:AUIAF) President Dr Richard Spencer tells Proactive it is planning an airborne magnetotelluric (Mobile MT) geophysical survey at its Lost Cities - Cutucu project in Ecuador in early December this year. Dr Spencer says the explorer completed three drill...

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