In a July 7 research note, Noble Capital Markets analyst Mark Reichman reiterated the firm's Outperform rating on Aurania Resources Ltd. (ARU:TSX.V; AUIAF:OTCQB) and noted that "Aurania's exploration program is providing an abundance of drilling targets for a variety of metals and the potential to make multiple discoveries in its large concession package."
The analyst asserted that a unique aspect of the firm's large land position "is the potential for it to have entire mineralized systems hosting large deposits" and anticipated that management "could have a clearer view of the system encompassing Tsenken N1 and TiriaShimpia by the end of summer."
Reichman noted at a Noble and Channelchek virtual roadshow, Aurania's Chairman and CEO Dr. Keith Barron and President and Director Dr. Richard Spencer talked about Aurania's achievements and future plans. Reichman reported three key topics of the discussion: exploration, access agreements and joint ventures or spinoffs, all pertaining to the Lost Cities–Cutucu project.
As for drilling, Reichman relayed, Aurania has drilled 28 holes to date over 12,018 meters in several targets. Among them were the Crunchy Hill and Kuri-Yawi epithermal gold-silver targets, the Tsenken N2 and N3 porphyry copper targets and the Tsenken N1 sediment-hosted copper-silver target. Results of holes 3 and 4 from drilling at Tsenken N1 and of hole 9 at Kuri-Yawi are expected soon.
Currently, Aurania is addressing the sediment-hosted targets. Drilling is underway at Tsenken N1 and Tiria-Shimpia.
In the future, Aurania plans to drill additional targets, including: Latorre C gold-silver (about 2.5 kilometers from Yuri-Kawi, KuriPan gold-silver, Tsenken N4 copper-gold and Kuri-Yawi copper-gold.
"KuriPan is interesting because of gold identified in the stream sediment samples and indications of gold veining," wrote Reichman.
Regarding access agreements, the analyst noted, Aurania continues to obtain these and now has signed agreements, representing about 75% of the project area, with 43 of the 55 communities connected to its property in Ecuador. The explorer expects to increase that number during this half of 2021.
Finally, Reichman reported that Aurania management is considering partnering on and/or spinning off certain of its claim packages. One possible scenario is partnering with a major that will take over exploration through completion of a feasibility study, earning up to a certain stake in the project, while Aurania retains the remaining interest. As for spinoffs, there could be more than one, Reichman indicated, given the number of mineralization styles at The Lost Cities–Cutucu.
"The formation of joint ventures and/or spinouts could help maximize the value of the company's holdings for Aurania's shareholders," Reichman wrote.
Noble Capital has a US$3.75 per share target price on AUIAF, the current share price of which is US$2.63.
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Disclosures for Noble Capital Markets, Aurania Resources, July 7, 2021
Company Specific Disclosures
The following disclosures relate to relationships between Noble and the company (the "Company") covered by the Noble Research Division and referred to in this research report.
The Company in this report is a participant in the Company Sponsored Research Program ("CSRP"); Noble receives compensation from the Company for such participation. No part of the CSRP compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed by the analyst in this research report.
Noble has arranged non-deal roadshow(s) with investors in the last 12 months. The Company has attended Noble investor conference(s) in the last 12 months.
Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) within the next 3 months.
Noble is not a market maker in the Company.
ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE
Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis. Named WSJ 'Best on the Street' Analyst and Forbes/StarMine's "Best Brokerage Analyst." FINRA licenses 7, 24, 63, 87.