After hearing about “The Lost Cities” project from Aurania Resources Ltd. (TSXV:ARU) on Red Cloud Klondike Strike and interacting with the company on twitter, I had the chance to talk with Dr. Keith Barron, Chairman, President, and CEO of the company. It was a lot of fun and it is my pleasure to share the transcript from our call below.

Aurania Resources is a junior exploration mining company focused on early-stage work on a large, contiguous land package in Ecuador. Their land holdings are approximately 2,000 KM sq. and they picked them up during this year’s PDAC after an extended period of restrictions on staking in the country. And I do mean “during PDAC”, as Keith told me he actually submitted the claims while the country of Ecuador was hosting a cocktail party.

Dr. Barron is quite the character and it is great to see him active in this area again. The land package that Aurania has secured is approximately 200KM to the north-east of the storied Fruta del Norte gold deposit, which Dr. Barron actually staked years ago. Hence, the question – will lightning strike twice?

On April 20, 2017, the company announced that they had completed a financing for total gross proceeds of C$6,401,780. The company issued 3,200,890 units in the financing, which included one common share at $2.00 and an 18 month, half-warrant at $3.00. Prior to the financing, the company had 22,759,735 shares outstanding. With approximately 26M shares outstanding and a thinly-traded, current price of $2.15, the market cap is approximately $56M.

The company is cashed-up and has an exciting project with a strong leadership team. Watch for news as they begin to launch an exploration program consisting of reconnaissance geological work, airborne geophysics and regional stream silt sampling. You can find out more at the company’s website.

PB: Hello, Dr. Barron. Thanks for joining me today. There's a lot that I would like to discuss -- with everything you've done, it is quite the career.

KB: Thanks Peter. Nice to be with you, too.

KB: When I was not much older than you, I started writing something called "Straight Talk on Mining" online. The site is still active -- it is -- and I started writing pieces in 2001. It was just blatant self-promotion, but I answered a lot of people's questions about mining, in general. There was very little information out there in the public domain at the time. People would ask, "How do you do fire assays?" Or "How do you determine where to drill?" All kinds of things like that. There was so much misinformation and bad information that I got fed up and decided to setup the site and start writing a blog.

KB: I had been living and working in South Africa for 2 years prior to that. When I came back to North America, no-one really knew who I was anymore. I set this site up and, lo and behold, it helped get my name out there. When I had the first property with Aurelian, I walked into John Embry's office at Sprott Asset Management and he said "I know you -- you're the guy who writes that stuff on the internet!"


KB: He told me that he was a subscriber and he read the articles. I didn't recognize his name from the site, but he said he was on there with an alias. Then, he called his secretary and said "Cancel my afternoon -- I need to talk to this guy."

PB: (Laughs)

KB: He gave me the first order for $1M and that is what really set Aurelian off on the right track. That was in June of 2003. Up to that point I had been financing it out of my hip pocket, which you can do for a while but can't do forever.

PB: I saw one post on the site where you described it as "not a tout sheet". Instead, you were focused on "clarity and explanation of technical terms". Interesting to hear that was needed at the time, as I suspect it may be still needed today.

KB: Well, I wish I had more time to write, but, as you know, I am involved in a number of companies, both public and private. My life is no longer my own!

PB: And it's amazing to hear that John Embry was on your site at that time. Sometimes I find it hard to imagine quite where some of these people get their news from, so it's interesting to hear that they read it. You mentioned the first financing of Aurelian there and one other story that jumped out at me from Straight Talk on Mining was about calling your father when at he was at Las Vegas.

KB: Yes, he came through and lent me $200,000. He had a lot of faith in me. He was a fairly wealthy individual, but $200,000 is and was a lot of money. Plus, he knew how much money I had put into it. At that point, I had put, basically, everything I had into it -- over $750,000. Poor old Dad is no longer with us, but he came through. Had that not happened, I don't know where I would be now.

PB: It sounds like the Colombianos would have it instead.

KB: Maybe.

PB: And the former diplomat from the USSR, that struck me as interesting turn of fate that seemed to parallel some of the stuff going on with Aurania now. I believe you mentioned a man named Octavio who is involved in this search for the lost cities.

KB: Yes, Octavio Latorre has been part of the story since I first went to Ecuador in 1998. I've known Octavio forever and we talk almost every day. He just turned 87 last week. He was all fired up when I spoke to him recently because he found a few pages of records in some remote place. He is still going through archives, it is his raison d'être. He wants us to find it and this is, certainly, his baby. We will do our best.

A photo of Mr. Ocatvio Latorre 

PB: And I believe that the history of this project goes back to times before the exploration Fruta del Norte.

KB: Yes, before Aurelian was created. I first started the exploration in January 2001 and made a discovery, actually, on that trip in Zamora-Chinchipe Province, in the Southern part of the mineral belts, which are the Cordillera del Condor, which is contiguous with the Cordillera de Cutucu, where our present property is located.

KB: The Lost Cities could have been anywhere in Ecuador, but they happened to be in the continuation of the belt in the northern part. It was almost serendipity, again. It was a very prolific gold and copper belt. There's not just Fruta del Norte, but other things as well. Lumina Gold has Santa Barbara with 4M ounces.

KB: Lundin Gold is going to be busy on that property for a very long time, not just with Fruta del Norte but a whole basket of other gold and copper occurrences. Most of which they haven't even walked on yet. Fortunately, they are keeping the property largely intact. It is about 80,000 hectares right now. From their announcements, they are going underground next month. They have all the permits and nothing seems to be holding them back. Onwards and upwards!

KB: I think it is all very positive for Ecuador. There are other things going on, too. You may have seen that SolGold had an offer from BHP to buy Cascabel. Obviously, BHP has confidence in the country. NewCrest ended up buying 10% of SolGold, so they have confidence in the country as well. Now that Lenin Moreno has won the election, it is going to be status quo. I am very pleased with the way things are developing there.

PB: I am looking at the map of your area in the Cordillera de Cutucu and I see the deposits to the south in the Cordillera del Condor, but I wonder to what degree your property is a greenfield exploration project?

KB: It has had no company on it, except for oil companies that have done some regional mapping. It is similar to the situation when Gencor walked into the Cordillera del Condor in the 1980s.

KB: Now, I have seen people who are doing artisanal mining in the area -- there is a symbol on the south-west edge of our property called Patuca. That is an alluvial gold mine that is in production, but it is not part of our land package. They haven't found the sources of the gold, however, and I presume that the sources are located further to the east, uphill, somewhere on our property. We haven't done the field work to verify that, yet.

KB: There is a lot of other stuff to consider, as well. There was mining in this area going back to the age of the Conquistadors, which I have talked about extensively online, but there were other surveys done in the area, as well.

KB: General Proaño went across the Cordillera de Cutucu in 1864 and wrote that he saw Colombian miners on the eastern side of the Cutucu, near the top. There was another report in the 1880s by some Frenchmen who were looking for rubber and came across some gold miners.

KB: There were some interesting reports from an engineer named Alvarez in 1908-1912, when construction of the Panama Canal had been abandoned due to yellow fever depleting the workforce. The company that was building the Canal even went bust. Later on, the Americans took control and completed it but, for a time, it didn't look like it was going to get finished. One of the Generals in Ecuador thought they could compete with the Canal by building a railway from the coast of Ecuador to the headwaters of the Amazon and ship goods all the way to the Atlantic. These guys were told to look for a route across the Cutucu and spent several years doing it. In some cases, they either found gold in drainages or saw people who were mining gold. There is a lot of anecdotal evidence of gold in the area, but do we have our own information? No.

KB: People ask me why I haven't gone in there and spent the last few years doing exploration. First of all, I'm very well known in Ecuador and it would be extremely unwise to start exploration without having title to the ground. As soon as anybody got wind of it, they would have swooped in and started putting concessions in. That would have been foolhardy.

PB: Well, the package you have put together looks very nice. It is contiguous and large.

KB: Yes, there are virtually no holes in it. We intend to prospect the whole thing from one end to the other.

KB: We are going to do both stream sediment surveys and an airborne geophysical survey for magnetics and radiometrics. The geologists were there recently and I spoke with them. It has rained heavily and it doesn't look like we are going to be able to do our survey until August. We will try in July, if we can, but it is all very weather-dependent.

KB: Up until 4 or 5 years ago, there were not even any topographic maps of the Cordillerra de Cutucu. That is one of the reasons why mining companies didn't get in there. If you look at the old maps from 5 years ago, the center of the Cutucu is marked as "Nubes" or clouds. It was like that for a very long time.

KB: The US Army Corps of Engineers helped to survey it together with the Ecuadorian Military. Those maps may have been done 15 years ago, but they were only made public recently.

KB: The other thing is that there is virtually no infrastructure there. They have been busy trying to construct a road on the eastern side of the Rio Upano, which runs down the west side of the Cordillera de Cutucu. That has been in progress over the last five years, but it is still intermittent. You can only drive from A to B, then have to cross a bridge to continue on the other side, and then cross another bridge to get back on the east again. The route is all marked out and, in some cases, the trees have been cut but it has not actually been constructed the whole way.

PB: I was puzzling over what the topography would look like in that area. Are the Rio Upano, Rio Santiago, and Rio Zamora all in different watersheds?

KB: Yes, they are. The Rio Zamora is a fair distance to the south of the property. The drainage divide actually runs down the center of the Cordillera de Cutucu. The things on the west side are flowing down to the Pacific and things on the east side are flowing to the Amazon.

PB: Really! What an interesting location. I would imagine it is pretty lush jungle there.

KB: It is. The locals have taken out the mahogany, but it is pretty much unbroken jungle. There is the odd village here and there, but very few people live in the area.

KB: The terrain varies from a low of 600 meters above sea level along the Rio Upano, up to 2,300 meters at the highest peak. It's about 1,500 or 1,600 meters on average. The old Aurelian property went as high as 2,400 meters and those heights are not an impediment to doing work, but it does take time. It is laborious. We will probably cut helicopter pads into the top of the ridge, establish temporary camps, and then have people walk down on both sides to collect samples.

KB: In the old days at the Aurelian property, when we had no money, we couldn't afford to use helicopters so we had to slog up the hills. Often, we only got one sample per day. That makes it a very expensive sample. We took 9,000 samples over the course of four years and found 32 gold occurrences as a result of that. We know that the technique certainly works.

KB: Are there going to be 32 gold occurrences on this property? We just don't know yet. I know there has been alluvial gold here and there, but as far as we can ascertain, no-one has ever found the source. If the Spaniards did find the sources, then that is not revealed in any of the documents.

KB: I've mentioned Nambija on the website and in the media because it is a very interesting example of what we are thinking about at Cutucu. Nambija was never ever mentioned in the historical record as an underground mine, even though it certainly is. It's funny -- the Spaniards called it a poor mine, but it was not because it was low grade. They preferred to mine alluvial gold rather than underground, which is why they called Nambija a poor mine.

PB: Great, so many interesting things to discuss. Do we have a sense for the age of the rocks at the Cutucu?

KB: Yes, they have been mapped by oil companies and the oldest are Devonian, I believe. Most are Jurassic and Cretaceous. The Jurassic rocks are the ones that are hosting the porphyries to the south and the gold deposits to the south.

KB: One of the reasons I went for this large property is because the volcanics are much more extensive here than they are to the south. To the south, they have been largely eroded away. If you looked at any of the maps produced by the geological survey, then you would see there are rivers and streams with gold alluvials to the south. Lots of documented production and almost all of it is now staked up entirely.

KB: That alluvial gold deposits that have been staked out are a remnant of the vein systems that have been totally eroded away. The enclosing volcanics are gone and the only thing that is left behind is the gold. I think that where we are, up in the north, a lot of those gold systems are still largely intact.

PB: Is there a sense of whether they could have been brought up closer to surface?

KB: Well, it is a very curious area because it is what is called a back-arc rift. An analogue would be the Great Rift Valley in Kenya, where the elevation drops down by many kilometers. Another would be the Dead Sea, where it actually goes below sea level.

KB: In these areas, there are a lot of faults that are moving apart and intrusives are able to come up along these fault zones because the crust is quite thin. Since it is a rift zone, the crust is splitting apart.

KB: Back in the Jurassic, around 145 million years ago, there were active volcanoes up and down this rift zone -- from one end to the other, all the way from Colombia to Peru. Then, the rift zone was buried in by sediment largely during the Cretaceous around 90 million years ago. To the north of our project, those basins are now oil-bearing basins and that is why the oil companies were interested in looking in the rocks in our area. Those rocks are now buried 4,000 meters down.

A photo of the Cordillera del Condor located to the south of Aurania's property, provided by the company. 

KB: The Cordillera de Cutucu and Cordillera del Condor are ridge systems where the rocks that had dropped down reversed their sense of direction in the Tertiary. Instead of being 4,000 meters down, these things emerged to several kilometers up in the air. Then, they were eroded. As they eroded, a lot of the volcanics came off the tops and exposed the vein systems and the porphyries. If it wasn't for that fortuitous emergence and subsequent erosion, then nothing would be there. It would just be volcanics and of no interest.

PB: What an interesting setup.

KB: Yes, although it is certainly not unique. There are other places in the world where this has happened before. It is just an uplifted and reversed rift zone. The forces of nature that were in effect down south at the Cordillera del Condor are at play here, too.

KB: We have all these volcanics in the Cutucu. We know that they are there, we've seen them and sampled them. If you have got volcanics, then you generally have hotspring systems and circulating hot water. That is what takes the gold and other metals out of the rocks and deposits them in veins. The veins are essentially fault zones that get filled in with quartz and metals.

KB: There is really no way of avoiding having some sort of hydrothermal activity, but you never know if it is going to be sustained long enough to produce something that is going to economic.

KB: For my PhD, I worked on a gold deposit called Springpole Lake near Red Lake in Ontario. I found an epithermal deposit associated with volcanics and breccias, just the same as Fruta del Norte, but it is 2.7 billion years old and is the oldest of its type on record.

KB: Geological processes are geological processes. We see gold deposits forming today at places like Yellowstone. At the Cutucu, the volcanics are similar to Condor. I would consider it to be productive, in terms of metals, so we will have to see what we get!

PB: You mentioned the erosion at the Cordillera del Condor and Springpole being billions of years without being eroded away. Any sense of what has preserved it?

KB: It is completely tilted on its side. Half of it has been eroded away. You can walk up through the roots of the thing and see the progression to the very top, where the volcanics actually erupted and formed bedded units of breccias. It has 5M ounces of gold.

PB: Right, these can be big systems.

KB: Oh, yeah. If the activity is sustained for a very long period of time, then they can grow quite large. There is no telling what happened at Fruta del Norte, but it was probably alive for 10,000 years and actively depositing metals.

KB: There is a place called Wairakei in the North Island of New Zealand that was drilled as a source of geothermal energy. About 40 years ago, there was a throttle plate made from stainless steel placed in the well to regulate the steam, which pulses like in a geyser. They replaced the steel plate one day and noticed there was a film on it that was, maybe, 5 cm thick. Turned out that it was almost solid gold and silver.

PB: (Laughs)

KB: The gold was coming up from below and plating itself on the metal parts.

PB: Amazing. These hydrothermal fluids that are coming up from below can contain other metals and can cause all kinds of chemical reactions when they cool, so I wonder about the use of magnetics and radiometrics that you mentioned before.

KB: The magnetic and radiometric surveys are done largely to find copper porphyries, which tend to have potassic alteration in that part of the world. The potassium minerals are mildly radioactive, naturally, and you can pick up the gamma radiation from the air using a helicopter and a scintillometer. Also, the porphyries tend to have a lot of magnetite, which is an iron-oxide mineral that is magnetic. The magnetometer will pick that up.

KB: If you were to have a coincidence of radiometric and magnetometer anomaly in the same place, then you almost surely have a copper porphyry. Then, it's a question of cutting your way through the forest with machetes to stand on top of the thing and take some samples. At the old Aurelian ground, we found a number of copper porphyries. In most cases, you could tell when you were right on the surface of them because they have a lot of pyrite and all the rocks in the area are very rusty in colour. All the streams look like a deep orange because the pebbles in them have been rusting. You know when you're on top of one of these things. Sometimes they can be buried, and you'll have to do a soil survey or something like that.

KB: There have been advancements since the Aurelian days. Now we have portable XRF machines. They are not very good for determining gold, but they are very good for copper. I have friends who have worked down in Ecuador recently and they have taken the XRF gun to the soil samples. That gives a reading and it is like instant gratification. You have no need, unless you have to generate a 43-101 report, to send it in to the laboratory. A junior sampler can use the gun on these things in one day and then you know what you're dealing with.

PB: Sounds like a big shift from the days of doing one sample per day and waiting for assays.

KB: Right, but it can still take a month, maybe a month and a half. If you have to backpack a kilo of sample materials out of the bush to a road, package them up, get them to town, then a prep-lab or even send them overseas. The time is the factor -- it can be a two-month turnaround. If you can speed that up, then so much the better. We will certainly do the XRF on our samples, but we will probably have to bite the bullet and send the samples off anyway because the XRF is not particularly good for detecting gold.

PB: You mention the importance of time there and the weather, I wonder what is the window for your exploration season?

KB: Ecuador is not like Canada -- you can work year-round. You can get in there for the stream samples at any time. Of course, you don't want to be in a raging river. For this first pass, we have to get some permits done, which is in process now. We also closed a financing recently, which will help us get things underway. The financing went well and we met our targets. I have to reassemble the team. I have an office in Quito with three staff, but it will be a case of rebuilding.

PB: Get the band together again!

KB: It's 10 or 15 years on now and we're all getting older. I don't know if I'm going to be doing all that much bush-crashing. I'm 54 now. One of the chaps who was around in the old days is in his 60s. My professor who wrote the first report on the Aurelian property unfortunately passed away recently. He was 86. We've got the feelers out and have a number of resumes in from younger people.

KB: I would like to hire a lot of Ecuadorians. It seems that there are more Ecuadorians studying mineral deposits than there were 10 years ago. 10 years ago, they were all going into soft rock and petroleum exploration. They weren't interested at all in mining, but that is rapidly changing.

PB: You mentioned the financing and it makes me think of the article from Bob Moriarty that I saw on where he said something along the lines of, "I would never touch this structure if it wasn't Keith Barron behind the wheel."

KB: People have been a little critical about it because there's not a lot of liquidity, but I went back through the old records and found that when Aurelian did it's second financing it only had 14.1M shares out. I wouldn't be doing this project if I wasn't going to be in a position where I stood to benefit from it.

KB: I was pretty much wet behind the ears in the old days and I got pushed around a bit. When Kinross finally took over the company, I had 8% of the project. Of course, I started out with 100%. I accept that I am going to get diluted over time, which is fine, but I am doing other things to benefit shareholders. I am not taking any wages and I challenge you to find anyone else in the junior mining space and is not paying themselves at least $100,000 a year.

KB: I've got a lot of skin in the game. The fact that I own a big percentage of the company means that my goals are completely aligned with the shareholders. And remember, my holdings are escrowed -- I can't sell very much. Whatever I do sell gets scrutinized and is filed on SEDI.

PB: Right. They say that a geologist with a chequebook can be a dangerous thing but you're not just any geologist, Keith.

KB: Well, I guess not. Maybe that's why some people have been buying the shares -- they are hoping that lightning strikes twice. I am not going to make any guarantees, but I have certainly put a lot of time, effort, and money into this. I wouldn't be doing it unless I believed in it.

PB: So, you have known about the area for a long time but have only acquired it recently, right?

KB: Yes, there was a moratorium on staking in Ecuador for seven years. It was just lifted last year during the PDAC. While everyone was at the cocktail reception, myself and my chief geologist were at the computer filing for all the claims.

PB: Wow.

KB: All my competitors were at the Ecuador Day cocktail reception, but we foreswore that because we knew the properties were all coming open that day. It was a minute after 12 o'clock and there we were, ferociously filing all this stuff on two computers.

PB: Reading through the aspects of your life story that you put up online has been great. You say Economic Geologist, but I wonder if Adventure Geologist might be a better description.

KB: I suppose so. I've done a lot of crazy things. And all of this is only the stuff I've done in Ecuador. I was in Kazakhstan for a year and a half, two years in South Africa, and Australia for a year. Many countries in South America. I've been all over the place. I also have a sapphire mine in Montana that is going well.

KB: You could say I'm diversified, but you have to follow the money. For most of my career, I didn't have any money and was just looking for employment. When there was a downturn in the mining industry after Bre-X and you couldn't get a job in Canada, I went to South Africa and worked in diamonds. I did that on and off for eleven years. Sapphires are not too different from diamonds.

PB: I have been surprised by how much mining is going on in Montana, to be honest.

KB: If you took the state of Montana and put it in Ontario, then there would be tens of thousands of prospectors and mining companies working there. The Americans have never paid for doing regional geophysical surveys like the Canadians. Both the Provincial Surveys and the Geological Survey of Canada are good at it, and there are a lot of mines that have been found because of those surveys. At least from getting the people into the right area to make the discoveries.

KB: Montana is overwhelming, really. I have a bunch of breccia pipes on the property that are gold bearing, as well as the sapphires. They're all on the same piece of real estate.

PB: The genetic model for that deposit boggles my mind.

KB: Well, the two events are completely unconnected and not related in time. They are things that are following structure, at least.

PB: And is that a public company?

KB: No, it is private.

PB: How have you found it dealing with the regulators there?

KB: It hasn't been too bad because my property is on private land. I don't have to deal with the Bureau of Land Management or the US Forest Service, although I am on good terms with them.

PB: Does any of that stuff extend up into BC or Alberta, or is it different up here?

KB: There are things that continue to the north, but it is harder to look because the continental ice sheet stopped just south of the 49-th parallel. It just made it into the very northern part of Montana, so most of Montana has never been glaciated. It is like the Yukon, where things like soil surveys are very effective for finding minerals.

PB: Thank you. You mentioned South Africa and I wonder about things there, with the Impala takeover of Stillwater Mine in Montana. The politics in South Africa seemed have been bad for a while there and I wonder how that will play out. The potential for disruption to major sources of global supply is always something to watch.

KB: It is not a place where I would do any business.

PB: But you mentioned that you are happy with the developments in Ecuador.

KB: I've been there for a long time now and I've seen changes made. Correa is just about to leave office and he acknowledges there were some mis-steps when he first became President. He suspended all work in the mining business through the Mandatos because he said that the Government was not getting a fair break on royalties.

KB: There was more going on in the background with some influential environmentalists, where the President had to make a political move to consolidate power. It involved forces much larger than the few foreign mining companies in the country at the time.

KB: To some extent, we were a victim of our own success. We had just found Fruta del Norte and there was a lot of hype around it. There were people in North America who said, incorrectly, that it was being nationalized.

KB: I think that the current Minister has been very supportive of the mining business. He has been up to Canada numerous times to meet with industry. He was at the last PDAC and has given speeches. Prior to that, the Ecuadorians just ignored the mining business. There was no Ministry of Mines. The Under-Secretary of Mines was in the Petroleum Ministry. We really took a back seat to everything else. With the oil price being more or less $50/barrel, they have had to rethink where their money is going to come from over the long term.

KB: At this point, Fruta del Norte is looking like a 19 year mining operation. The copper porphyries nearby could run for 20 or 25 years, as well. These are going to have a substantial impact on the GDP in the country. Not just in the direct hiring, but in the multiplier effects around that.

KB: It just needs to get done in a responsible way so that we do whatever we can to protect the environment. Although the mining companies get labelled by the media as not environmentally friendly, you should see what artisanal miners can do to a very large area.

PB: Interesting to note that they can impact a large area.

KB: Look into the Madagascar sapphire rush -- there are tens of thousands of people rushing into a national park right now. The lemurs, which are protected, are going into the pot as bush meat. It is an environmental disaster. Artisanal miners don't do any reclamation. Most of what they produce goes into the black market. They don't pay for any infrastructure and there is very little benefit.

PB: Appreciate the chance to talk with you about, Dr. Barron. Very informative to dig through your work and discuss things. Thank you.

KB: I would like to mention that I am very careful not to label myself as a treasure hunter. I spent many years studying at university and am an Adjunct Professor. I don't engage in treasure hunting. I don't risk my own or other people's capital in that kind of thing.