Aurania announces US$1.18m loan

Aurania Resources Ltd. (TSXV: ARU) (OTCQB: AUIAF) (Frankfurt: 20Q) (“Aurania” or the “Company” – https://www.commodity-tv.com/ondemand/companies/profil/aurania-resources-ltd/ ) announces that it has entered into a US$1,187,500 million loan (the “Loan”) with Dr. Keith Barron, the Company’s Chairman, CEO and largest shareholder (the “Lender”), pursuant to a promissory note issued by the Company to the Lender as of the date hereof (the “Note”). In accordance with the terms and conditions of the Note, the Loan is due and payable and shall be repaid in full upon notice of twelve months and one day from the Lender to the Company (the “Maturity Date”), whereupon all unpaid principal and accrued interest thereunder shall be payable to the Lender. The Loan is unsecured and bears interest at a rate of two percent (2%) per annum.

The Loan has closed in advance of the anticipated closing of the Company’s non-brokered private placement of up to 2,142,857 units of the Company (each, a “Unit”) at a price of C$0.70 per Unit, for aggregate gross proceeds of up to C$1,500,000 (the “Offering”), previously announced in the Company’s news release dated February 28, 2022. The Offering is expected to close in two tranches with the first tranche expected to close shortly after the receipt of conditional approval of the Offering from the TSX Venture Exchange (the “TSXV”), followed by the second tranche shortly thereafter.  Under the Offering, Dr. Keith Barron has also committed to purchase 571,428 Units, being approximately C$400,000 (the “Insider Participation”).

Dr. Keith Barron is a related party of the Company by virtue of the fact that he is the Chairman, the Chief Executive Officer, a promoter and a principal shareholder of the Company, and as a result, each of the Loan and the Insider Participation (collectively referred to herein as, the “Related Party Transactions”) constitutes a “related party transaction” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). In addition, as the Loan and the Insider Participation each involve Dr. Keith Barron, a related party of the Company, and have been negotiated at approximately the same time, the Related Party Transactions may be considered “connected transactions” within the meaning of MI 61-101. The Company is relying upon an exemption from the formal valuation and minority shareholder approval requirements under MI 61-101 in respect of the Related Party Transactions, in reliance on Sections 5.5(a) and 5.7(1) of MI 61-101, respectively, as the fair market value of the Related Party Transactions, collectively, does not exceed 25% of the Company’s market capitalization, as determined in accordance with MI 61-101. The Company did not file a material change report related to the Loan more than 21 days before the expected closing of the Loan as required by MI 61-101, as the Company required the funds from closing on an expedited basis for sound business reasons.

The Loan and the Insider Participation were approved by the members of the board of directors of the Company who are independent for purposes of the Related Party Transactions, being all directors other than Dr. Barron. No special committee was established in connection with the Loan and the Insider Participation, and no materially contrary view or abstention was expressed or made by any director of the Company in relation thereto.

Use of Proceeds

Assuming the Offering is fully subscribed, the Company intends to use the net proceeds from the Offering, first for the purpose of paying the Company’s annual concession fees in Ecuador to maintain its mineral concessions at the Company’s Lost Cities – Cutucú Project in southeastern Ecuador (the “Cutucú Project”), including concessions not covered by the use of proceeds from the October 2021 financing, and then secondly, the balance of the Offering as bolstered by the additional funds from the Loan, will be used to conduct further exploration including target refinement at the Awacha porphyry target and the Kuri-Yawi and Kuripan epithermal gold targets, all of which have moved up the target rank, and for general working capital purposes.

Initial stage exploration completed to date at the Cutucú Project in southeastern Ecuador has identified a large number of targets, which are categorized according to target type into three distinct target areas:

• epithermal gold target area;
• porphyry copper target area; and
• sediment-hosted copper-silver/silver-zinc target area.

Each target area is defined by separately identifiable mineral concessions. The next stage of exploration of each of these areas requires increasingly more field exploration and, in particular, increased drilling.

The Company believes the aggregate net proceeds raised from both the Offering and the Loan will allow it to maintain all of its mineral concessions at the Cutucú Project and to conduct further exploration and target refinement at the Awacha porphyry target and the Kuri-Yawi and Kuripan epithermal gold targets, while at the same time exploring joint venture and partnership opportunities.

Notwithstanding the foregoing, there may be occasions where, for sound business reasons, management of the Company may vary the use of proceeds from those uses previously described, depending on future operations or unforeseen events or opportunities.

The securities described in this news release have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the U.S. Securities Act) absent registration or an applicable exemption from the registration requirements.

This news release does not constitute an offer to sell or the solicitation of an offer to buy securities, nor will there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

About Aurania

Aurania is a mineral exploration company engaged in the identification, evaluation, acquisition and exploration of mineral property interests, with a focus on precious metals and copper.  Its flagship asset, The Lost Cities – Cutucú Project, is located in the Jurassic Metallogenic Belt in the eastern foothills of the Andes mountain range of southeastern Ecuador.

Information on Aurania and technical reports are available at www.aurania.com and www.sedar.com, as well as on Facebook at https://www.facebook.com/auranialtd/, Twitter at  https://twitter.com/auranialtd, and LinkedIn at https://www.linkedin.com/company/aurania-resources-ltd-.

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

Cautionary Statement on Forward-Looking Information

This news release may contain 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, statements regarding the Loan, including the anticipated use of the proceeds therefrom, the receipt of all necessary approvals, including the approval of the TSXV of the Loan (and the timing thereof), the anticipated Offering, including the maximum size thereof, the expected timing to complete the Offering, the anticipated use of the net proceeds from the Offering, the receipt of all necessary approvals, including the approval of the TSXV of the listing of the Common Shares (and the timing thereof), Aurania’s objectives, goals or future plans, statements, exploration results, potential mineralization, the corporation’s portfolio, treasury, management team and enhanced capital markets profile, 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, the potential impact of COVID-19, risks relating to equity market and stock price volatility, delays in obtaining or failures to obtain required governmental, regulatory, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate 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 the other risks involved in the mineral exploration and development industry, including 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.