Keith Barron, who owns 53% of the common shares of Aurania Resources (TSXV: ARU; US-OTC: AUIAF), has agreed to loan the company up to $3 million to support exploration at its wholly-owned Lost Cities gold project in Ecuador.
The chairman and CEO participated in the company's rights offering in March that raised $5.25 million. Barron acquired 1.48 million of the 1.95 million shares issued at $2.70 per common share.
The geologist privately co-founded Ecuador gold explorer Aurelian Resources, and discovered the Fruta del Norte deposit in 2006. The company was acquired by Kinross Gold (TSX: K; NYSE: KGC) in 2008 for $1.2 billion.
Aurania Resources' Lost Cities-Cutucu project is in the eastern foothills of the Andes mountain range in southeastern Ecuador. So far, Aurania has eleven targets for gold-silver mineralization, four copper targets and one silver-zinc-lead target.
On April 9, the company announced it had doubled the size of its Kirus copper-silver target to an area measuring 6 km by 3 km. Samples from boulders in streams contain up to 12% copper with 166 grams per tonne silver. Follow-up exploration found mineralization of up to 5.1% copper and 70 grams silver per tonne in sporadic outcrops in dense jungle over a 2 km trend northwest of the Kirus magnetic feature.
Kirus is about 6 km from Aurania's Tsenken target, and both are associated with highly magnetic features evident in a geophysical survey the company flew over the Lost Cities project. Both targets have high-grade copper and silver in sedimentary rocks near their respective magnetic features.
On April 2, Aurania announced that its team had enlarged the Tsenken target by 6 km and that it has found high-grade copper and silver over a 9 km trend. Grab samples from boulders in streams contain up to 7% copper and 70 grams silver.
In a press release, president Richard Spencer says that the company's exploration model is that copper and silver from the porphyry cluster "into the enclosing ... creating a more or less flat-lying layer of copper-silver-bearing rock."
"This sheet-like target should be relatively simple to drill," he says. "The potentially larger target presented by the covered porphyry would require much deeper drilling and would be investigated in a later phase of exploration."
Aurania shares are trading at $3.74 in a 52-week range of $1.93 to $4.10. The junior explorer has a $105-million market capitalization. According to its most recent corporate presentation, insiders own 57% of the company.