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Aurania Resources Ltd. (TSXV: ARU, OTCQB: AUIAF, Frankfurt: 20Q): Proven Team in Search of the Gold-Rich Lost Cities of Ecuador; Interview with Dr. Richard Spencer, President

on 2/23/2019
At the 2019 Vancouver Resource Investment Conference, we learned from Dr. Richard Spencer, President and Director of Aurania Resources Ltd. (TSXV: ARU, OTCQB: AUIAF, Frankfurt: 20Q) that Aurania is a junior exploration company with a focus on precious metals and copper. Its flagship asset, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador. At the 2019 Vancouver Resource Investment Conference, we learned from Dr. Richard Spencer, President and Director of Aurania Resources, that they are in the middle of stream sediment sampling of their 2,080 square km concession area, and they already have an immense line up of exciting targets. Plans for 2019 include a scout-drilling program that is designed to prioritize those targets better for the benefit of the shareholders.

Dr. Richard Spencer, President and Director of Aurania Resources at the 2019 Vancouver Resource Investment Conference

An example of simple stream sediment sampling with catch basin and sieve

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, at VRIC 2019, interviewing Dr. Richard Spencer, who is President and Director of Aurania Resources. Hi, nice to talk with you again.

Dr. Richard Spencer: Thanks very much, Dr. Alper. Good to be here.

Dr. Allen Alper: Could you give our readers/investors an update on what's been going on since the last time we interviewed? Also for the benefit of the thousands of new readers/investors, who have joined us since May, could you give us an overview of your Company?

Dr. Richard Spencer: Certainly. We are exploring along trend of a major gold-copper belt in southeastern Ecuador. Aurania's management team has a very good track record in that adjacent area. We've, through Aurania, taken up a very big, contiguous area, 2000 square kilometers, on geological trend of that prolific gold-copper belt. It's the first time that this new area is being explored with modern methods. It was explored by the Spanish back in the 1500s, and in fact 2 gold mines are reported to have been producers for about 40 years in the late 1500s.

And so we're in that area. We're applying exactly the same exploration techniques that both Keith used in finding the Fruta del Norte gold deposit and my team used in finding some copper deposits in the adjacent belt. We are applying exactly the same exploration techniques to this new area that has never been explored.

We've covered 100% of the area with geophysics. Some really exciting targets have come out of that. And now we're doing this stream sediment work that detects minute quantities of metals in the streams. We use those metal concentrations, in combination with the geophysics, to identify the targets. We're about 35% of the way through the area using that ground technique in the streams.

So we're making excellent progress. We've identified a large number of gold-silver targets that have epithermal features like Fruta del Norte, the deposit that Keith found. And some very interesting copper targets as well.

So through only covering 35% of the area, we already have an immense line up of targets, which is really exciting.

Dr. Allen Alper: That sounds great. Could you tell our readers/investors a bit about your background and that of your Management Team and Board?

Dr. Richard Spencer: The first thing is that Keith and his team found the Fruta del Norte gold deposit that's going into production late in 2019. Very rich deposit! A real world-class deposit in the true sense!

My teams were involved in the discovery of about 24 billion pounds of copper in the adjacent belt. That was using grass roots techniques as well, in an area that hadn't been explored at that time. I was also involved with IAMGOLD with the discovery of what's now called the Loma Larga gold-silver deposit that INV Metals has. That is going into production in the next couple of years as well.

Apart from that, I've spent the last 20 years in South America, in principally gold and copper exploration, but some uranium and battery metals as well.

The rest of the Board is a very diverse board, with a mixture of business people and people with geological know-how. The other crucial thing is that about 57% of the Company shares are owned by Management and the Board, principally Keith at about 51%. There are very few companies out there that have that much of management’s money invested in the company. It means that Management and the Board are absolutely aligned with the rest of the shareholders.

Dr. Allen Alper: That's excellent. It's great to see management having skin in the game.

Dr. Richard Spencer: Yeah, we've got serious skin in the game.

Dr. Allen Alper: Could you tell us a bit about your share and capital structure?

Dr. Richard Spencer: We have about 32 million shares outstanding, about 36 fully diluted. It's a tight share structure. Liquidity is a little bit low unfortunately. We're working on that, but it's low because we have some very committed shareholders. Apart from the Board and Management, there are some other big blocks of shares and those individuals got in early and they're not going to sell, or not sell easily. So we have a relatively small float of between 20 and 30% of our share structure available for people to buy on the market. We're working on improving that liquidity.

Dr. Allen Alper: Could you tell our readers/investors your primary goals for 2019?

Dr. Richard Spencer: Our goals are very clear for 2019. We are almost ready to start scout-drilling at the first gold-silver target, a target called Crunchy Hill. The concept of scout- drilling might be a little bit new to people. It is fundamentally important to a company like ours. We have this multitude of targets that we've already found by covering only 35% of the area and it is so easy, as geologists, such as Keith and I, to drill one target and get really excited about it and focus on that target without realizing that the next one might actually be a better target.

It's very difficult to recognize and prioritize which is going to be the best target. You're always working with nature and it's difficult to see which are the strongest targets. So, the scout drilling program is designed to drill 5 - 7 holes per target. Regardless of the results on the first one, that drill rig must then move to the second and then do the same, and the third, and the fourth. The concept is to allow us to be able to prioritize those targets using drill results.

At the end of the day, we are going to have more targets than a company of our size can deal with. We need to be prioritizing the ones that fit perfectly in our sweet spot and we would advance those. But there are going to be a number of targets that are too big for us, potentially some of the copper targets. Those we would joint venture, sell off or put into a separate vehicle.

The discipline of scout drilling and the discipline of moving onto a new target, regardless of how good our results are in the previous targets is going to be a good challenge. But we see disciplined scout drilling as one of the best ways of realizing shareholder value. Having some targets joint ventured will mean that other people's and other companies' money will flow into the project area. The shareholders should benefit very well from that.

Dr. Allen Alper: That sounds excellent. What are the primary reasons our high-net-worth readers/investors should consider investing in your company?

Dr. Richard Spencer: First of all, there are these 2 historic Spanish gold mines that we believe are in our area. We will find those, in time, because the waste rock heaps from that old production in the late 1500s- would have shed some gold into the streams and we will pick that up in our basic exploration. So, we're working in an area where there was historic gold exploration and production. Those mines were reported to be very, very rich. So, it has that historic aspect.

The second thing is that we're along trend of a current prolific gold and copper area, applying the same exploration methods that led to those discoveries. And we're already coming up with a multitude of targets.

The third reason is the capital structure. Although the tight shareholding makes liquidity low, which is frustrating to some shareholders, the positive side of that is that Management and the Board are so invested in this company- equally invested as any of our shareholders. That is the key factor that should make future shareholders recognize that we are absolutely, as management and board, aligned with them as shareholders or future shareholders.

Dr. Allen Alper: Those sound like very strong reasons for our high-net-worth readers/investors to consider investing in your company. Is there anything else you'd like to add?

Dr. Richard Spencer: Just that Ecuador is a very good jurisdiction. The government has recognized that responsible mining is going to be a contributor to the economy. The government is absolutely focused on finding drivers for its economy and mining is one of seven industries that they've identified that will have the most leverage for the economy. So, there's a lot of government support and the government is doing the right thing in terms of supporting structured and responsible mining.

So, we have to be responsible in terms of the local communities and we're putting a huge amount of emphasis on that and the environment. As miners and explorers, the vast majority of us are fundamentally environmentalists as well. And we have to take care of the areas and the communities where we're working and work with the people there. We're having a lot of success with the local communities and getting real engagement with those communities. That's incredibly positive for the future of the project.

Monica Ospina and Keith Barron enjoying the traditional drink 'chicha' during a Shuar welcome ceremony.

Dr. Allen Alper: That sounds excellent. That's great that you're very supportive of the community and the environment. Excellent! We’ll publish your press releases as they come out so our readers/investors can follow your progress.
Dr. Richard Spencer
Aurania Resources Ltd.
(416) 367-3200

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