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Aurania Resources Ltd. (TSXV: ARU, OTCQB: AUIAF, Frankfurt: 20Q): Exploring Very Large Land Package in a Metallogenic Belt, Ecuador, Significant Discovery of High-Grade Silver-Zinc-Lead, Aggressive Exploration Drilling Ongoing; Dr. Richard Spencer, President Interviewed

on 5/12/2021
Aurania Resources Ltd. (TSXV: ARU, OTCQB: AUIAF, Frankfurt: 20Q) is focused on a very large land package in Ecuador. Aurania's flagship project, The Lost Cities – Cutucu Project, is located in the Jurassic Metallogenic Belt, in the eastern foothills of the Andes mountain range of southeastern Ecuador. We learned from Dr. Richard Spencer, who is President of Aurania Resources, that while exploring primarily for gold and sedimentary hosted copper, they made a significant discovery of high-grade silver-zinc-lead mineralization 15-22 km in length. Plans for 2021 include aggressive exploration drilling in three different targets at the Cutucu Project.

Aurania Resources Ltd.

Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing Dr. Richard Spencer, who is President of Aurania Resources, Ltd. Richard, could you give readers/investors an overview of your Company, your recent exploration activities and your plans?

Dr. Richard Spencer: Our focus is on a large land package in Ecuador, about half a million acres. It was originally staked, directly from the government, to cover an area where our founder, Dr. Keith Barron, believed, from historic documents from Spanish colonial times, that two of the so-called lost cities that were based on gold mining operations, located in South America. That was the rationale for taking up the large concession block, which is in a previously unexplored jungle-covered area.

Our exploration up until now, over the last three and a half years or so, has come up with a number of different styles of mineralization. We're a gold-focused Company and the historic Spanish mines that we were looking for were both gold mines. We have three main styles of indications of mineralization so far. The one is called epithermal and those are gold and silver targets. The second thing that we've come across is copper.

Originally, we were looking for porphyry copper that is in copper-bearing granitic domes.

We knew to be looking for that type of copper deposit because we're on the mineral belt that comes up from the south of our concession, through our area. That adjacent belt has a lot of the so-called porphyry style copper in it. The other thing that we found on the copper side is sediment-hosted copper; copper that lies in flat sheets, within the layering of the sediments. It occurs at surface, in Aurania’s concession area and we've been able to start to follow that down beneath the surface through exploration drilling. We've just released some results on that, which are pretty exciting from an exploration point of view. We believe we're starting to bring this sedimentary copper into focus as an exploration target.

The third key thing that we have in the portfolio is silver related with zinc and a little lead. This is shaping up to be a very significant target. I think it's our first discovery. We found the silver-zinc system over about 15 kilometers or 10 miles.

Dr. Allen Alper: It sounds exciting. Sounds like you have three very exciting targets that you're exploring. The copper you found in the sediments was native copper; could you tell me a little more about that?

Dr. Richard Spencer: Yeah, the native copper is really interesting. We're using an oil exploration model for the sediment-hosted copper exploration – and that needs some explanation. In the Central African Copperbelt, a huge copper area that extends from Zambia to the Congo, where Ivanhoe has made that beautiful discovery at Kakula, the sedimentary copper is in permeable sandstone. Hot copper-bearing fluids flow through the sandstones and need to be focused and concentrated in order to form a copper deposit of significant size. The copper from a large area needs to squeeze into a smaller area to be concentrated enough to form a big copper deposit. The second thing you need is a source of sulfur because it’s very reactive with the copper and it would strip the copper out of that basin water. In our exploration model, our source of sulfur is in sour natural gas. So, we're focusing on the areas where natural gas would have accumulated in geological arches. Because the gas is lighter than water, it tends to rise up into those arches and gets trapped there.

If one were to bring a copper bearing-fluid that's circulating in the basin's waters into that arch, the copper would interact with the sulfur, and would precipitate or capture that copper in copper sulfides. That's where one's likely to get the big copper deposits. In the first drill hole on the Tsenken N1 target, where we hit the native copper, that was right below an impermeable bed that would stop those fluids from disseminating throughout the basin. That is exactly what we're looking for as a buttress against which the gas and copper-bearing basin fluid would pool and react, precipitating copper sulfides.

The second hole of Tsenken N1 is focused on the area where those copper bearing fluids are likely to have come into contact with the hydrocarbon gas, which is the source of sulfur in the system. We're expecting to get copper sulfides in the second hole. If that geological exploration concept works, then we've already defined a large number of other trap sites for this gas – and those would be the next areas to be targeted for future drilling for copper sulfides.

Dr. Allen Alper: That sounds exciting and it sounds like there's huge potential. Could you tell our readers/investors your main priorities for the remainder of 2021?

Dr. Richard Spencer: We have three main priorities: we have two drills operating in the field at the moment. One is a lightweight rig that can go down to about 700 meters or so; that's the one that we have on the sedimentary copper that I've just been describing. The second rig is drilling a target that was defined from our prior drilling at Kuri-Yawi. We drilled seven holes in that target last year, giving us a vector towards where the core of the mineralization is most likely to lie. We have a bigger drill that's going down on that target at the moment. Kuri-Yawi is a combination of an epithermal target for gold and silver, and beneath that, a cylindrical shaped porphyry, which is a copper target. The other area that's prioritized for drilling is the silver-zinc Tiria-Shimpia target.

Those are our three priority target areas for the rest of the year. Our geological exploration crews are coming back with interesting stuff all the time. We have a couple of targets in the pipeline that will be jostling for priority position to be drilled next. There should be some interesting press releases, coming relatively soon, but mainly there are three priority areas, the sedimentary copper Tsenken NI, Kuri-Yawi, which is the gold-copper combined epithermal and porphyry target, and then there’s Tiria-Shimpia.

Dr. Allen Alper: It sounds like 2021 will be extremely exciting time for Aurania Resources, their stakeholders and investors. It must be very enjoyable for your team of geologists having so many areas to explore. It's my understanding that you have a huge property. Could you tell us a bit about that?

Dr. Richard Spencer: The property is about half a million acres or about 208,000 hectares. It has never been explored since Spanish times in the late 1500s. It's mountainous, it is completely jungle covered, it is slippery, and there are snakes everywhere. It's really tough country. Our team is entirely Ecuadorian, except for our VP-Exploration who is French. The Ecuadorian team is doing an amazing job, not only on the exploration, but on the environmental side of things. We have an ISO14001 accreditation now which gives us an extra yardstick by which to measure our environmental impacts and ways of measuring the effectiveness of our plans to reduce our environmental impact.

On the social side, we're dealing with 54 different communities and there are always opportunities and challenges with that relationship. We feel that there is a really good symbiosis between the Company and these mainly indigenous communities. They know their land better than anyone on the planet. I think everyone's having a good time and they can see the value of the contribution that they're making to all the stakeholders, the shareholders and to their fellow team members as well.

Dr. Allen Alper: Sounds excellent. Could you tell our readers/investors a little bit about your background, your Chairman and key members of your team?

Dr. Richard Spencer: Dr. Keith Barron founded the Company, based on this concept of these historic manuscripts and maps that he found in the Vatican and various other libraries around the world. Sevilla, Spain, was another big source of information that talked about two mining areas that were mined by the colonial Spanish in the late 1500s. One was called Logrono del los Caballeros and the other one was called Sevilla de Oro and they were both gold mines. He started to search for those two historic mines. We haven't found them yet, but we do believe we're getting warmer and warmer.

He's a guy with a lot of imagination and a lot of drive. He was also one of the founders of Aurelian Resources that found the Fruta del Norte gold deposit in southern Ecuador, which is now being very successfully mined by Lundin Gold. Keith has a large number of followers/investors that made a lot of money with his discovery of Fruta del Norte, so a lot of those people were Aurania's first investors. Keith was the principal mover behind this Company, and he invited me to join him. I didn't know much about the historic side of things, I thought it was an interesting story. But what really attracts me is the geology, the land package is right on geological trend of an area that has these beautiful epithermal gold-silver deposits with sinters that formed in an environment like the geyser platforms at Yellowstone National Park, but ours formed 150 -160 million years ago. And the area also has porphyry coppers. I thought this was an opportunity I couldn't pass up, an unexplored area with such potential to contain multiple deposits.

I'm a career exploration geologist. I've worked all my working life in exploration for gold and copper and uranium. I spent 10 years living in Ecuador. Our two boys were born in Ecuador. I was working for a South African Company at the time, and we found that chain of porphyries just to the south of where Aurania is working now. I am delighted to say that one of those discoveries went into production in 2019, the Mirador Copper Porphyry, which is Ecuador's first open pit deposit. After working for Gencor, a South African Company, I left and joined IAMGOLD, doing exploration not only in Ecuador but in the rest of South America. We were lucky enough to find the Quimsacocha deposit – now called Loma Larga and owned by INV Metals. It was a project that IAMGOLD took over from Newmont. Newmont made the discovery, but they had a different model in mind, and didn’t recognize the significance of what they had hit in the discovery drill hole. I think the intercept was two meters, with about 80 grams of gold per ton.

They felt that the intercept didn't fit their model, so they dropped the project, and we were able to pick it up. We went on to understand and modify the exploration model to the extent that we were able to make a significant discovery there, of just under three million ounces of gold – with silver and copper as well. Our time in Ecuador was a lot of fun, and it was it was successful in terms of discoveries as well.

Dr. Allen Alper: It's great to have a Team that has been so successful doing exploration work, which is running the Company. So that's excellent. I think your Company is well-financed and you recently had some fun doing it. I think you're well-financed for exploration, is that correct?

Dr. Richard Spencer: We are, we raised about $9 million in early April, so we’re reasonably well financed.

The thing about exploration geology is that it's lonely: it's a mixture of science, gut-feel and courage to stick through things when the results aren't quite what you expected them to be, and to adapt your models. A model is really just a guide.

I think our experience, making the Quimsacocha discovery with IAMGOLD, more or less sums it up: Newmont walked away from the deposit because their intercepts didn't fit their exploration model. I think that's a lesson for all of us. We need to be prepared to change our exploration models. I think we need to be humble, because nature, being what it is, means that we will always be wrong to some extent. Exploration takes courage because you go with your convictions, based on the partial information available to you at that time.

Our shareholders and stakeholders benefit from the fact that Keith and I have both done this before. We've applied for land and mineral concessions that no one else has staked before and then had the tenacity to stick with it long enough to make the discoveries, despite the disappointments in the short term. The disappointments and the negative results are part of the whole story. They build you. They direct you towards the right area. One just needs to be realistic about the fact that one is going to miss. If you miss on a drill hole, as long as you don't get discouraged and you use that information, it helps you to drive towards where you're going to make the discovery in the next hole, or in the next ten holes.

Dr. Allen Alper: It's great that the Team has experience, has done it before, and has the courage of their convictions to go after targets and prove them out and explore and spend money to get results. Dr. Spencer, could you tell our readers/investors the primary reasons they should consider investing in Aurania Resources?

Dr. Richard Spencer: I believe that Aurania is in a really exciting phase in its evolution. First, we've spent close to four years on the property, doing a lot of the hard slog. We've drilled a handful of holes and refined our exploration models. I think we are close to making a discovery, be it on the silver-zinc zone, or on the sedimentary copper, or on gold. I don't know which it's going to be first, but we're drilling with two rigs, at the moment, while we have detailed work happening in the silver-zinc area in preparation for drilling there.

It's just a matter of time before we make a discovery. I think the silver-zinc target already is a discovery, although it's likely going to take a couple of months for the market to realize that as we put out results. This is a Company that's motivated, our Ecuadorian team is motivated beyond belief. It has two rigs turning, it's funded, and it's poised for discovery. We all know that in this junior exploration world, you want to be holding the stock of companies that are making discoveries and I think Aurania is perfectly primed in that situation right now.

Dr. Allen Alper: Sound like very strong reasons for readers/investors to consider investing in Aurania. 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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