Few investors realize it but the greatest investor in world history, Warren Buffett, is a single theme stakeholder. Many years ago he realized that governments would always inflate their currency. You can bet on it. He did and it made him rich. He also made a point of only buying when things were cheap. I may have mentioned that a time or two.
In one of the greatest success stories of the last couple of years, Solaris Resources rocketed higher from $1.38 in July of 2020 to a high of $15.20 before correcting on the strength of a number of kilometer plus copper intercepts in Ecuador.
In an incredible bit of irony, Aurania Resources Ltd. (ARU:TSX.V; AUIAF:OTCQB) has dropped by 55% in two short months. Fourteen months ago Aurania hit $5.75 and was as high as $2.22 at the first of October 2021. Nothing at all has happened to their project or their business plan. But we are in tax loss silly season and bored investors are dumping everything that will catch a bid. Even a tiny bid.
The irony is that Aurania’s property line lies about 12 km from the Solaris’ Warintza potential 1 billion tonnes copper project. But that’s not all.
The president of Aurania, Dr. Richard Spencer, discovered the deposit at Warintza nearly thirty years ago. It was in the hands of the foremost copper expert in the world, Dr. David Lowell, for many years. Made a misstep when dealing with the locals. That stopped the project for many years. Upon his death eighteen months ago the project passed on to the new company, Solaris. They began as a $0.30 private placement and have rocketed higher since.
Aurania has two tier one copper porphyry targets. Due to the Covid restrictions in Ecuador the company gained access to the projects only recently. Tatasham looks to be a compelling 1 km by 3 km magnetic body. While it is under sedimentary cover, it is the largest magnetic target on the entire 208 square km Aurania property. That’s half a million acres.
Awacha seems to be a cluster of smaller porphyry units with massive quartz, pyrite and sericite alteration on surface. Stream sediments show copper and moly indicating a high probability of a cluster. Awacha looks to have a 3 km by 5 km magnetic signature and high conductivity signals.
Keith Barron is best known with Aurania for his search for the two lost cities of gold. However when Ecuador opened up the doors to foreign mining companies he was quick to strike and picked up the giant land position the company now holds.
Aurania has already discovered sediment hosted copper in a belt 23 km by 7 km and is in the process of drilling. Some results have been released so far and they confirm the discovery. More results will be out soon.
Aurania is one of those stories I have talked about for years. When resource shares have declined for the year, come late November into late December pissed off investors dump their shares at any price regardless of the merits of the company and the projects. This year has been especially brutal to Aurania with investors bailing out in a market with near zero liquidity. A stock where nothing has changed except for a 55% drop in sixty days is a buy, not a sell. I expect the shares to stabilize in here and be back where they were in September before March. It’s a good bet to make a 50% to 100% gain in three months.
And if you work out the odds of the same geological team that discovered Warintza thirty years ago doing the same thing once and perhaps twice at Tatasham and Awacha you will realize that if Solaris can go from $1.38 to $15.20, you might see exactly the same thing with Aurania.
In my books I keep harping about buying things when they are cheap and selling when they are dear. Aurania is exactly what I am talking about. When nothing has changed at all except for the price, you should be leaping at the chance to pick up cheap shares. If you were in the market for a new BMW and you went to your dealer and realized that they had mispriced your desired model by 55% would you hesitate to belly up to the bar?
Aurania is absurdly cheap and that isn’t going to last for long. It is the most attractive it has been since the company went public. It is down 75% for the year. Those sort of sale prices don’t last.
Ecuador had an election this year. In May the pro-mining candidate, Guillermo Lasso, took office removing an overhang on the mining industry. Since he took office he has made it clear he supports mining and international companies. The welcome mat is out in Ecuador for mining.
Aurania is an advertiser. I have participated in two private placements and will participate in more. I am biased, do your own due diligence.
Aurania Resources
ARU-V $1.05 (Nov 30, 2021)
AUIAF-OTCQB 52 million shares
Aurania Resources website
Bob Moriarty
President: 321gold
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Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
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1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Aurania Resources. Aurania Resources is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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