Aurania Announces BFD
With the exception of a short burst higher in January of 2018, Aurania Resources has pretty much been bound in a trading range from about $2 to about $3 for the last year.
I used to believe that to make money in resources, you wanted to buy a good company and hold on to it forever. Eric Sprott had the same theory. Between 2011 and 2015 his fund dropped 93%. That’s a lot better performance than Pinetree Capital of Sheldon Inwentash. They went from a split adjusted $425 a share to $1.65. That’s a 99.7% decline. Even I did a lot better than that.
All of the funds had giant positions and when people hate resource stocks, the liquidity dries up and they got creamed.
You have to buy cheap and sell dear with the emphasis on the “SELL.” If you don’t sell, it doesn’t matter what you have on paper. Nova Gold went from $.12 in 2001 to almost $20 a share to $.46 a share in 2008. You could have made a fortune trading it either up or down. You could have bought cheap and sold dear or you could have sold dear and bought cheap. Both worked well. Or you could have been a crowd follower and bought at $20 and dumped at $.46 with the rest of the sheep.
Aurania just made an announcement that qualifies as a BFD. And you should know and remember that Keith Barron and his crew are probably the most qualified and experienced geologists in Ecuador. BFD is a technical term but the PR qualifies.
Aurania is about to start scout drilling their Lost Cities project this quarter. They have one permit more to obtain and are in the process of picking a drill company. Keith Barron is smart enough to understand that in a difficult market you have to deliver red meat to your investors and potential investors. The chart below shows what really good rock would look like.
(Click on image to enlarge)
There are about 1 million warrants that were due to expire in October but Keith extended them for a year with an acceleration clause. The exercise price is $3 and if the shares trade for over $3 for 20 days straight, the investors have 30 days to exercise or lose. Keith would like to have the money so he’s going to deliver, I think. He has a property payment to the government in early 2019 and a warrant exercise would cover that and reward the early shareholders.
Look for the price of shares to go up and down in a boundary between $2 and $3 or so until solid drill results come out. Right now the company is worth about $60 million and at $3 would be worth $90 million. That would be high for anyone else other than Keith Barron. But he’s been there and done that. This isn’t his first rodeo.
Aurania is an advertiser. I have bought shares in the open market and participated in two private placements. Do your own due diligence.