In an April 12 research note, Noble Capital Markets Inc. senior research analyst Mark Reichman stated that junior mining exploration company Aurania Resources Ltd. (ARU:TSX.V; AUIAF:OTCQB; 20Q:FSE) is fully funded for the remainder of 2021 after recently completing two separate financings.
The analyst advised that Aurania Resources raised gross proceeds of CA$7,771,700 from a brokered equity issuance of 2,507,000 common shares along with additional gross proceeds of CA$1,250,000 from a private placement. Noble Capital Markets estimated that following the close of these transactions Aurania had a total of 46,843,388 shares outstanding.
The report mentioned that Aurania Resources is focused primarily on identifying, evaluating, acquiring and exploring precious metals and copper property interests. The firm's flagship asset is The Lost Cities - Cutucu Project in Ecuador comprised of 42 mineral exploration concessions covering around 2,080 square kilometers.
The analyst noted that diamond drilling work is currently being conducted at the Kuri-Yawi target with the objective of testing an epithermal target and a deeper porphyry target down to depths of as much as 1,000 meters. "Porphyry deposits, while low in grade, are the largest source of copper ore and can be important sources of gold," the analyst added.
Noble Capital's expects that Aurania's drilling activity will accelerate though it believes it could achieve even greater progress if an additional drill were to be deployed. So far, the company has drilled three targets and is presently working on the Tsenken N1 copper-silver target and the Kuri-Yawi epithermal gold-silver and copper porphyry target. The company's next plans are to carryout drill work at the Tsenken West copper-silver and Tiria-Shimpia silver-zinc targets.
Sr. Research Analyst Reichman commented, "Aurania's exploration program has yielded a plethora of drilling targets for a variety of metals and the potential to make multiple discoveries in its large concession package."
"In our view, the company has reached a stage where the outcomes of its efforts may start to become more readily apparent to the market," Reichman added.
Noble Capital commented that "Aurania Resources Ltd. represents a potentially high-risk, high-reward investment opportunity that hinges, in part, on management's ability to discover economically-recoverable mineral resources within the Lost Cities-Cutucu project area."
Noble Capital expressed its confidence in Aurania's shareholder friendly corporate governance practices and its strong management team. Noble advised; however, that the company will require external financing to fund its growth as it is not generating revenues or cash flow from operations and is operating in Ecuador, which it considers to be a comparatively higher-risk mining jurisdiction compared areas such as the U.S. or Mexico.
Noble Capital Markets listed that it currently has an "Outperform" rating for Aurania Resources with a target price of US$3.50/share. The company's shares trade under the ticker symbol AUIAF on the US-OTCB market and closed for trading at US$1.90/share on April 12, 2021.
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