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Aurania Resources eyeing potential multiple discoveries at Lost Cities-Cutucu project in Ecuador

Flagship asset is the Lost Cities-Cutucu project in the eastern foothills of the Andes in Ecuador Proven management team that discovered much of the gold and copper in the adjacent Cordillera del Condor ‘Outperform’ rating from Noble Capital Markets What Aurania Resources does: Aurania Resources Inc (CVE:ARU) (OTCQB:AUIAF) is a Toronto-based junior explorer, focused on precious metals and copper, whose flagship asset is the Lost Cities-Cutucu project in the eastern foothills of the Andes mountain range in southeastern Ecuador. 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 co-founded 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 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 of the project area which, if proven, may have provided a similar source of porphyry, epithermal and skarn mineralization. How is it doing: It’s been a busy 2021 so far for Aurania. On March 1, the group updated on progress at the Lost Cities-Cutucu project, saying scout drilling had kicked off at one hole on the Tsenken N1 target. Drill platforms were being prepared for drilling on the potential porphyry Yawi target and the Tiria-Shimpia target. The Yawi epithermal gold-silver and copper porphyry target will see a drill program designed to test both the epithermal target and the deeper porphyry target with drilling down to about 800 metres (m). A larger drill rig will be used for the drilling at Yawi. On April 12, the company told investors that the Tiria-Shimpia silver-zinc zone at Lost Cities was “shaping up” to be the company’s first discovery as it reported on first channel rock-chip sampling from the area. Seven mineralized layers have been identified, one of which is 50m thick, at Tiria-Shimpia, which is a target over 15 kilometres (km) long. The company also revealed it is already making plans to diamond drill several key exposures in the near term. Elsewhere, at Tsenken N1, the first drill has now been completed to a depth of 722m and assay results are awaited. At Kuri-Yawi, drilling is underway, with a second rig that can drill to around 1,200m, Aurania added. The company also said it has been encouraged by finding “significant” amounts of black ‘pyrobitumen’ – a pseudo-mineral composed of carbon and derived from hydrocarbon – when drilling its Kuri-Yawi target. Black pyrobitumen is rarely documented in epithermal scenarios but perhaps significantly, it occurs at gold deposits and occurrences such as McLaughlin in California, Esquel in Argentina, Waiotapu in North Island New Zealand, several Carlin Trend gold mines and in the Witwatersrand of South Africa, the company told investors. Aurania started drilling on the highly prospective Tskenken N2 copper-silver target in September 2020. It has noted that a copper-gold system seen in the Tsenken N2 target extends into the Tsenken N3 target, forming part of a single iron oxide copper-gold (IOCG) target that spans over 20 square kilometres Aurania has also confirmed extensive high-grade copper and silver in the Tsenken B area at Lost Cities-Cutucu. The results extend from the mineralized fault breccia at the Tsenken A target around 6 km to the north.  The company has 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 (g/t) silver. What the broker says: In a note to clients on April 12, analysts at Noble Capital Research repeated an ‘outperform’ rating on Aurania, pointing out that the company is fully funded for the remainder of 2021 and its exploration had yielded a “plethora of drilling targets for a variety of metals” and could make “multiple discoveries” in its large concession package. “To date, three targets have been drilled,” highlighted the Noble analysts. “The company is currently working on the fourth and fifth targets, Tsenken N1 and Kuri-Yawi. Tsenken N1 is a copper-silver target, while Kuri-Yawi is an epithermal gold-silver and copper porphyry target.” “Upcoming drill targets include the Tsenken West copper-silver and Tiria-Shimpia silver-zinc targets. We think the company could deploy an additional drill to accelerate progress,” they added. At Kuri-Yawi, the analysts noted that the firm’s Mobile MT geophysical survey had clearly defined a feature thought to be the sulphide-bearing core of a porphyry at the Yawi target. “Epithermal veins were encountered about 100 meters below surface and contained the presence of pyrobitumen which has been associated with gold systems. The target at depth is a strong conductor, which may be a sulphide zone. Porphyry deposits, while low in grade, are the largest source of copper ore and can be important sources of gold,” they added. The Noble analysts also drew attention to Aurania’s recently completed two financings – a brokered public offering for C$7,771,700 gross and a private placement, which raised C$1,250,000 gross. “Following the financings, the company had 46,843,388 shares outstanding by our estimate. Based on our forecasted expenditures, the company is fully funded for the remainder of the year,” they said Inflection points: More exploration and drill results Development of joint ventures over parts of the flagship asset Identify specific targets at Kirus for scout drilling What the boss says: In April 2021 Aurania CEO Dr Keith Barron spoke to Proactive about drilling at the Kuri-Yawi target. “This is not a new target, but we’ve got kind of a new focus on the thing. We’ve drilled it before but that was done before the benefit of a MMT survey (airborne) that we completed on it fairly recently.” He added: “We’ve found a number of epithermal veins fairly high up in the hole. They would be true depth about a hundred meters below the surface.” Contact the author at giles@proactiveinvestors.com

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