Aurania Resources Ltd. Announces Proposed Acquisition of Ecuador Lost Cities – Cutucu Exploration Project

TORONTO, ONTARIO–(March 2, 2017) – Aurania Resources Ltd. (TSX VENTURE:ARU) (“Aurania” or the “Corporation“) is pleased to announce that it has entered into a definitive purchase and sale agreement (the “Agreement“) to acquire EcuaSolidus S.A. (“ESA“), a company incorporated under the laws of the Republic of Ecuador, from Dr. Keith Barron (the “Vendor“), the President and CEO of Aurania (the “Transaction“).

ESA owns all of the rights, title and interest in and to forty-two (42) mineral exploration licences, totaling 207,764 hectares in the Cordillera de Cutucu, located in the Province of Morona-Santiago in southeastern Ecuador (the “Lost Cities – Cutucu Project“). The Lost Cities – Cutucu Project is subject to a two percent (2%) net smelter returns and a two percent (2%) net sales return royalty held by the Vendor.

As a condition of closing of the Transaction, Aurania will complete a concurrent financing to raise aggregate gross proceeds of no less than $6,000,000 at a price of no less than $1.00 per share (the “Financing“). The Vendor will be providing a loan to ESA prior to the closing of the Transaction in the amount of US$2.0 million in order to pay property fees due prior to the anticipated closing of the Transaction. Of this, US$1.0 million will be repaid at closing and the remaining US$1.0 million will be paid one year after closing with interest at 2.0% per annum.

Highlights of the Transaction

As consideration for the purchase of all of the outstanding common shares of ESA, directly or indirectly, Aurania will:

  • issue 1,000,000 common shares to the Vendor, and
  • pay a cash consideration of $500,000 to the Vendor.

The Transaction is subject to shareholder and regulatory approval and is expected to close in the second quarter of 2017.

The Lost Cities – Cutucu Project

The Lost Cities – Cutucu Project consists of forty-two (42) mineral exploration licences, totaling 207,764 hectares (~2,080 square kilometres) that covers the core of the Cordillera de Cutucu, a mountain range in the foothills of the Andes within the Province of Morona-Santiago in southeastern Ecuador.

Historic Spanish literature, including reports of gold production, point to the Cordillera de Cutucu as the location of two famous gold mining areas that operated in the 16th and 17th Centuries: Sevilla del Oro and Logroño de los Caballeros. The exact locations of these historical gold mining centres within the jungle have been lost over time. Each of these centres had a “Caja Real” or outpost of the Royal Treasury to ensure that the King of Spain received the “Quinto” or Royal Fifth production royalty. Extensive research by professional archivists in Spain, the Vatican and Ecuador, commissioned by ESA, revealed more than a hundred supporting historical documents relating to gold mining at Logroño de los Caballeros and Sevilla del Oro. There is strong evidence that indicates that these “Lost Cities” may be located within the project area.

Today, the only mining in the Cordillera de Cutucu is in artisanal sluicing and hand-panning operations that wash gold from river gravels. The project area is largely unexplored by modern exploration techniques. It has been subjected only to regional geological mapping by oil companies and government institutions – with the key finding being that the rock formations that host the 7 million ounce (Moz) Fruta del Norte epithermal gold and the 2.7Moz Nambija skarn gold deposits in the adjacent Cordillera del Condor extend into the core of the Cordillera de Cutucu.

The Fruta del Norte Deposit, located roughly 90 km south of the project area, is being developed by Lundin Gold Inc. and is scheduled to start production in 2020, with a planned ramp-up to annual production of 340,000 ounces of gold in 2021. The Nambija skarn deposits, located roughly 95 km southwest of the project area, have been mined by informal miners who officially reported 2.7Moz of gold production between 1981 and 2000.

In addition to these gold-rich deposits, the adjacent Cordillera del Condor contains a chain of porphyry deposits that are reported to contain measured and indicated resources of 9 billion pounds (Blbs) of copper, 11 Moz of gold and 61Moz of silver (Table 1). Inferred resources include an additional 22 Blbs of copper, 7Moz of gold and 30Moz of silver. Mines are under construction on two of the porphyry deposits, namely Mirador and San Carlos, with combined resources of 17Blbs of copper. The Lost Cities – Cutucu Project lies along-trend of this chain of porphyries and, since it contains the same rock formations that host the mineral deposits in the adjacent Cordillera del Condor, has potential to host similar deposits.

Dr. Keith Barron, CEO of Aurania, was the founder of Aurelian Resources Inc. (“Aurelian“), which discovered the Fruta del Norte gold-silver deposits in 2006. As such, his knowledge and experience was the driving force in pursuing the geological and historical information leading to the acquisition of the Lost Cities – Cutucu Project.

An exploration program is planned, consisting of airborne geophysics and a regional stream silt sampling program with reconnaissance geological work across the large, 2,080 square kilometre property. While the regional geochemical program is underway, any anomalous stream silt or rock geochemistry sample results will be a priority for concurrent ground follow up with the goal of identifying drill targets as soon as possible. A similar strategy proved successful for Aurelian in identifying the multi-million ounce Fruta del Norte gold deposit.

Table 1. Summary of NI43-101 Resources Reported from the Cordillera del Condor, adjacent to the Lost Cities – Cutucu Project

Stage Ownership Deposit Resources Gold Silver Copper
Category Millions of Tonnes Grade
Measured & Indicated Resources
Development CRCC-Tongguan Investment Co Mirador Measured & Indicated 438 0.19 2.7 1.4 21.5 0.61 5.9
Lundin Gold Inc Fruta del Norte Measured & Indicated 24 9.61 7.4 12.9 9.9    
Pre-development CRCC-Tongguan Investment Co Mirador Norte Indicated 171 0.09 0.5     0.51 1.9
Lumina Gold Corp. Santa Barbara Indicated 365 0.51 6.0 0.9 10.1 0.10 0.8
Los Cuyes Indicated 47 0.82 1.2 6.19 9.3    
Soledad Indicated 35 0.63 0.7 7.21 8.1    
Dynasty Metals & Mining Inc Jerusalem Measured & Indicated 1 13.80 0.4 79 2.4    
Sub-Total Measured & Indicated Resources     18.8   61.3   8.6
Inferred Resources
Development CRCC-Tongguan Investment Co Mirador 235 0.17 1.3 1.3 9.9 0.52 2.7
San Carlos 657         0.59 8.5
Lundin Gold Inc Fruta del Norte 12 5.69 2.1 10.8 4.1    
Pre-development CRCC-Tongguan Investment Co Mirador Norte 46 0.07 0.1     0.51 0.5
Panantza 463         0.66 6.7
JDL Gold Corp. Warintza 195         0.42 1.8
Lumina Gold Corp. El Hito 161         0.31 1.1
Santa Barbara 178 0.40 2.3 0.8 4.6 0.10 0.4
Soledad 0 0.50 0.3 6.9 4.5    
Chinapintza 1 6.00 0.1 47.1 1.1    
Dynasty Metals & Mining Inc Jerusalem 2 15.00 0.9 98 5.6    
Sub-Total Inferred Resources     7.2   29.7   21.7
Note: CRCC is China Railway Construction Corporation Limited
1 Corriente Resources Inc. was acquired August 4, 2010 by CRCC-Tongguan Investment Co., Ltd. (jointly owned by two Chinese state-owned enterprises). The resources were disclosed by Corriente in the March 24, 2010 AIF (filed on Sedar), prior to its acquisition. The current owners are not subject to public disclosure, therefore no updates are available.
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The Financing

As a condition of closing of the Transaction, Aurania will complete the Financing to raise aggregate gross proceeds of no less than $6,000,000 at a price of no less than $1.00 per share, with an overallotment option of up to an additional 15%. Proceeds from the Financing will be specifically allocated to the Transaction for property exploration, loan repayments, and working capital.

Completion of the Financing is subject to the closing of the Transaction and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange and applicable securities regulatory authorities. Assuming the minimum price of $1.00 per share and full exercise of the over-allotment option, a total of 6,900,000 shares would be issued for gross proceeds of $6,900,000.

EcuaSolidus S.A. – Financial Position

As at December 31, 2016, on an unaudited basis, ESA had total assets of $66,000, total liabilities of $132,000 and total shareholder deficit of $66,000. For the twelve month period ended December 31, 2016, ESA had, on an unaudited basis, total revenue of $Nil and a total loss of $81,400.

Related Party Transactions

The Transaction is a “related party transaction” as set out in Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions (“MI 61-101“) as Dr. Keith Barron, an officer, director and controlling shareholder of Aurania, is also the sole beneficial shareholder of ESA (the “Interested Party“). In the absence of exemptions, Aurania would be required to obtain a formal valuation for, and minority shareholder approval of, the “related party transaction”. For these transactions, Aurania intends to rely on the exemption from the formal valuation requirements of MI 61-101 contained in section 5.5(b) of MI 61-101 on the basis that no securities of Aurania are listed on a specified market set out in such section. Aurania intends to obtain the approval of minority shareholders by holding an Annual and Special Meeting of Aurania’s shareholders pursuant to which approval will be sought from a majority of Aurania’s common shares voted at the meeting other than the shares owned or controlled by the Interested Party.

Further details of the Transaction and the interests of the Interested Party will be provided in the management information circular in respect of the Annual and Special Meeting of Aurania’s shareholders, to be mailed to the holders of Aurania’s common shares and posted on SEDAR under Aurania’s profile at A further announcement will be made when this meeting has been formally called. The Transaction has been reviewed by a Special Committee of independent directors of Aurania comprised of Elaine Ellingham, Gerald Harper and Marvin Kaiser, and based on its positive recommendation, the proposed Transaction was approved by the Board, subject to due diligence.

Completion of the Transaction is subject to a number of conditions, including receipt of applicable regulatory approvals and shareholder approvals, including the approval of the TSX Venture Exchange and disinterested shareholders of Aurania. The Transaction is expected to close in the second quarter of 2017.

Dr. Keith Barron, of 8 King Street East, Suite 1010 Toronto, ON M5C 1B5, currently has ownership or direction and control over an aggregate of 14,167,873 common shares of Aurania, and options to acquire 800,000 common shares of Aurania, representing approximately 62.25% of the issued and outstanding common shares on a non-diluted basis and 63.53% of the issued and outstanding shares on a partially diluted basis. Pursuant to the Transaction and before the Financing and the Debt Settlement (discussed below), Dr. Barron will acquire an additional 1,000,000 common shares of Aurania. As a result of the Transaction, Dr. Barron will have ownership or direction and control over 15,167,873 common shares and options to acquire 800,000 common shares representing approximately 63.84% of the issued and outstanding common shares on a non-diluted basis and 65.02% of the issued and outstanding shares on a partially diluted basis. Dr. Barron proposes to acquire the common shares for investment purposes, and has no current intention to increase his beneficial ownership of, or control or direction over, securities of Aurania. These investments will be reviewed on a continuing basis and his holdings may be increased or decreased in the future.

Aurania will also settle all of the outstanding debt owed by Aurania to an affiliate of the Vendor by issuing common shares of Aurania to the Vendor at a price equal to the Financing price in an aggregate amount not to exceed $750,000 (the “Debt Settlement“). With respect to the Debt Settlement, Aurania intends to rely on the same exemption from the formal valuation requirements of MI 61-101 as noted above and intends to obtain the approval of minority shareholders.

About Aurania

Aurania is a mineral exploration company engaged in the business of acquiring and exploring mineral resource properties. It is currently exploring for gold, copper, silver and uranium on its three mineral properties, namely the Mont Chemin, Marécottes and Siviez projects, which cover approximately 99 km2 in south-western Switzerland. The Corporation’s 100% interests in its projects are held by the Corporation’s Swiss subsidiary, AuroVallis Sàrl, through exploration permits granted by the Canton of Valais, in Switzerland. Further information on Aurania, its management team and its projects can be found on and on Aurania’s website at

The technical information contained in this news release has been verified and approved by Aurania’s Chief Geologist, Jean-Paul Pallier, a designated EurGeol by the European Federation of Geologists and “Qualified Person” for the purpose of National Instrument 43-101, Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators.

Subsequent to execution of the Agreement, a trading halt was imposed on Aurania’s shares at the request of Aurania in accordance with the policies of the TSX Venture Exchange (“TSXV“) while the transaction was initially reviewed by the TSXV. This initial review has been completed and, in accordance with the policies of the TSXV, Aurania has requested that the current trading halt be lifted subsequent to the issuance of this press release today. As noted above, the Transaction continues to be subject to shareholder and regulatory approval and is expected to close in the second quarter of 2017.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release contains forward-looking information that involves substantial known and unknown risks and uncertainties, most of which are beyond the control of Aurania. Forward-looking statements include estimates and statements that describe Aurania’s future plans, objectives or goals, including words to the effect that Aurania or its management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to Aurania, Aurania provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, Aurania’s company’s objectives, goals or future plans, statements, details of the transaction with ESA, exploration results, potential mineralization, the company’s portfolio, treasury, management team and enhanced capital markets profile, the proposed private placement, the timing of the Transaction, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to, failure or inability to complete the Transaction with ESA on the terms as proposed, failure to obtain the required approvals of the Aurania’s shareholders and regulators, failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, regulatory, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, and those risks set out in Aurania’s public documents filed on SEDAR. Although Aurania believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Aurania disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

Keith Barron
President and CEO
Aurania Resources Ltd.
416 367-3200

Donna McLean
Chief Financial Officer
Aurania Resources Ltd.
416 417-8349