Aurania Resources Ltd. (ARU) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the Aurania Resources Ltd. Annual and Special Meeting of Shareholders Conference Call and Webcast. [Operator Instructions] And the conference is being recorded. Following the business meeting, the Chairman will provide an update on the company's activities. After the presentation, there will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Dr. Keith Barron. Please proceed, sir.

Thank you very much. Good afternoon, ladies and gentlemen. Welcome to the Annual and Special Meeting of the Shareholders of Aurania Resources Ltd. I am Keith Barron, Chairman, President, CEO and Director of the company. With your permission, management has scheduled the following for today's meeting: #1, the formal business of the meeting will be conducted first; and #2, at the conclusion of the formal business, we will provide a presentation followed by a question-and-answer period, as we've just stated. We have 5 business items today to conduct. These items are all outlined in the Management Information Circular dated April 28 the company's audited financial statements for the year ended December 31, 2021, together with the auditor's report thereon before the meeting. #2, to appoint UHY McGovern Hurley LLP chartered accountants as the auditors of the company for the ensuing year and to authorize the directors to fix their remuneration; #3, to elect the directors of the company for the ensuing year; #4, to approve the company's incentive stock option plan for the upcoming year; and #5, to transact such other business as may properly come before the meeting or any adjournments or postponements thereof. Once the formal business of the meeting has been completed, there will be an opportunity to ask questions. I will now call the meeting to order. In accordance with the bylaws of the company, I shall preside as Chairman of this meeting, I shall ask Carolyn Muir to act as Secretary of the meeting. Unless there is an objection, I shall ask Lori Winchester of TSX Trust Company to act as Scrutineer for the meeting. The Secretary has advised me that the Notice of Meeting, together with the Form of Proxy, Management Information Circular and Request Form have been provided to as applicable, each director of the company, the auditors of the company and provided to each shareholder of the company of record on April 29, 2022, the record date for the meeting. An affidavit of mailing has been provided by TSX Trust Company to the company, and I direct that the affidavit be annexed to the minutes of this meeting. Accordingly, unless there is an objection, I will dispense with the reading of the notice of meeting. The Scrutineer has provided me with the preliminary report regarding shareholder attendance and representation at this meeting. The Scrutineer reports that there are present or represented by proxy at this meeting, 96 shareholders holding 21,900,110 common shares. Accordingly, I declare that the requisite quorum of shareholders is present, and I declare the meeting is duly and properly constituted for the transaction of business. I direct that the Scrutineer's complete report on attendance be annexed to the minutes of the meeting. To the best of my belief, the votes against represented by proxy on a ballot in respect of any item of business before this meeting represent less than 5% of all votes that might be cast in respect of such item of business. There are several matters that must be dealt with during this formal part of the meeting. In order to expedite these matters, I have requested that certain persons make and second the formal motions, and I will call on these persons at the appropriate time. Shareholders may make comments on general matters during the question period to be held following the termination of the meeting. As the first item of the business, the company's audited financial statements for the year ended December 31, 2021, and the auditor's report thereon are hereby placed before the meeting. No vote is required with respect to this matter. We will now proceed with the appointment of the auditors of the company. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that UHY McGovern Hurley LLP Chartered Accountants be and they are hereby appointed as auditors of the company to hold office until close of the next annual meeting of shareholders or until their successors are appointed, as such remuneration as may be fixed by the directors and the directors be and they are hereby authorized to fix such remuneration.

I so move.

I second the motion.

Thank you very much. I declare that the resolution appointing the auditors of the company for the ensuing year and authorizing the directors to fix their remuneration has been carried. We will now proceed with the election of directors of the company for the ensuing year and the management information circular of the company dated April 28, 2022, on Pages 22 and 23, it was indicated that the company will propose the following 3 persons for election as directors: Dr. Keith M. Barron, Jonathan Kagan and Nathalie Han. I will now hear a motion nominating these persons as directors of the company for the ensuing year.

I nominate the aforesaid individuals who are identified in the management information circular of the company dated April 28, 2022, on Pages 22 to 23 to serve as directors of the company, to hold office until the next annual meeting of the shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the company.

Thank you. Are there any further nominations? Since there are no further nominations, I hereby declare the nominations closed. I've been advised by the Scrutineer that the proxy deposited for the meeting have been voted for the election of each of the directors, and I would ask someone to move the following resolution, which I will now read. Be it hereby resolved that the 3 persons nominated by management be elected as directors of the company to hold office until the close of the next Annual Meeting of Shareholders or until their successors are duly elected or appointed in accordance with the articles and bylaws of the company.

I so move.

May I have a motion seconded, please?

I second the motion.

Thank you very much. I declare that the resolution to elect Dr. Keith M. Barron, Jonathan Kagan and Nathalie Han as directors of the company to hold office until the close of the next Annual Meeting of Shareholders or until their successors are duly elected or appointed has been carried. We will now proceed with the ordinary resolution approving the company's incentive stock option plan as described on Page 24 of the Management Information Circular under the heading Approval of Option Plan for Upcoming Year. A description of the stock option plan is set out on Pages 18 and 19 under the heading Securities Authorized for Issuance Under Equity Compensation Plans 10% Rolling Stock Option Plan, and the full text of the plan is set out on Pages A1 to A8 of the Management Information Circular under the heading Schedule A Stock Option Plan. This resolution is an ordinary resolution that requires the approval of at least a majority of the votes cast there on by the shareholders in person or by proxy at the meeting. The Board of Directors of the company recommends a shareholder vote in favor of this resolution and believes that the passing of this resolution is in the best interest of the company. I would ask someone to move the following resolution, which I will now read. Be it hereby resolved as an ordinary resolution of shareholders of the company that, #1, the share incentive plan of the company described in the management information circular of the company dated April 28, 2022, be and the same as hereby ratified, confirmed and approved as the stock option plan of the company; and #2, any director or officer of the company is hereby authorized and directed for and in the name of and on behalf of the company to execute or cause to be executed whether under corporate CEO of the company or otherwise and to deliver or cause to be delivered all such documents and to do or cause to be done, all such acts and things as in the opinion of such director or officer may be necessary or desirable in connection with the foregoing resolution.

I so move.

May I have the motion seconded?

I second the motion.

Thank you very much. The Scrutineer reports that the resolution has been duly carried by a majority of the shareholder votes cast at the meeting, and I accordingly declare the resolution approving the company's incentive stock option plan has been carried. This concludes the formal business of the meeting as set out in the Notice of Meeting. There being no further business to conduct, I will now hear a motion to conclude the meeting.

I move that this meeting be concluded.

I second the motion.

Thank you very much. I hereby declare the motion carried and the meeting terminated. I wish to thank you for attending. I will now provide a brief presentation and then open up the floor to answer any questions that you may have about the company. Thank you very much for attending. So I'll give you a run through. This is actually part of a discussion on the company that I delivered in Quito, Ecuador 2 days ago. This is a shortened version, and I will be putting out a longer version in the next couple of days either on Zoom or on Loom, but it will be accessible through the Aurania website. So I will be making forward-looking statements, just be advised. So what to expect in 2022 and '23? Well, as I have said repeatedly, this year, we are focusing back on to gold and copper. Specifically, in the case of copper, copper porphyry targets and not so much the copper in sediment -- copper, silver and sediment that we talked about before. It's just that this is what the shareholders want. This is potentially what's going to move our share price and move the future prospects for the company. We are very much aware that we can't chew everything at once. It's a very big property with many, many targets on it. So our exploration, we're going to much more seriously prospect our gold targets, refine our copper targets in preparation for drilling late -- the fourth quarter of this year. Now what this means by refining not just doing exploration work on the targets, but there is actually quite a bit of a bureaucracy that has to be completed. We have to file an environmental impact statement for drill holes. We have to have a -- I'm getting feedback. Okay. We have to file an environmental impact statement for the drill holes because there is still difficulty within Ecuador, getting permission to use water courses as the source of water for the drilling. We're forced to collect rain water. What we do, we put out some large tarpaulins and collect it, but it does take quite a while to collect enough water for the drilling purposes. So that has to be done in advance. There's a number of other things, consultation with the communities, et cetera, et cetera. Anyway, this has been started, both for Tatasham and for Awacha and our plan going forward is to be drilling these things in the fourth quarter of this year, if not even earlier. M&A joint venture discussions are ongoing. In fact, as a result of my 40-minute lecture that I gave 2 days ago in Quito at the Copper and Gold Symposium, I was approached by a major company and had an hour-long discussion with them right afterwards, which is great. Very, very early in porous, and let's just see what comes from it. As I have said before, we do have a number of major companies in the data room and have had for some time. Community access agreements and community projects, we are working still hand-in-hand with the Step Forward Foundation as regards to community projects. Access agreements, it just gets better and better pretty much every week. We get more and more communities approaching us, asking us if we can work on their traditional lands. And in many cases, this is actually outside of our territory. It's outside of our concessions. Of course, we want to -- we have to concentrate on the property that we own. Environment and Water, we continue to meet or exceed ISO 14001 standards. In Peru, spin-out or JV as -- no doubt everyone is aware, the politics in Peru is somewhat uncertain right now. We don't know if the current government is going to survive for very much longer. They have been very, very slow to grant concessions and we take all this under advisement and we will be informing the shareholders of news as it comes in and as we make critical decisions. So -- and as it says in the small print at the bottom here, consultants will be integral in planning the company's next phase of work to meet the objectives of our revised strategy. So today, I'm not going to be saying anything about this or anything about this, but only to say that we started very recently a TikTok campaign taking some old footage from 5 years ago, old video of myself talking about the Lost Cities project and amazingly, we've had something like 170,000 views. Perhaps it's been -- we've been confused with both of these things, but it's only just in a good way. As P.T. Barnum used to say, there's no such thing as bad publicity. So this is actually -- I'm not going to go into this in great detail. As I said, this is a shortened version of the talk that I gave 2 days ago in Quito, where I related a lot of the early history of the Lost Cities project, all the historical stuff. You can find almost all of that on our website today. But I'll be giving the more expansive stuff and put that on our website later. Just to say that this is -- in the press release, we came out with very, very recently, the culmination of more than 10 years' worth of work. I think it's a real milestone for the company. Unfortunately, the market didn't exactly see it that way. And I'll have a bit of an explanation what I think may have happened. But I think just basically, it wasn't understood properly. But anyway, we'll move on. And this is a geological map that you've all seen before. There are 2 things that I want to point out here. You can see where our property is outlined, of course. Unfortunately, I don't have access to a cursor, so I can't move around and highlight things, but you can see the red box, and that's our existing property, and it concentrated on the Santiago formation, Chapiza formations. The Santiago is the host rock of Fruta del Norte. And based on all the historical information and all the rest of it, we figured that the place where Logroño and Sevilla del Oro would be most likely in the center of the property concentrated along the Santiago. Now a couple of things to point out here. You can see a lot of orange in the bottom part of this map. And that orange is granitic batholiths. It's the basement to the whole area. And you can see little blue areas, especially in the bottom left around beehive. These are kind of like little scabs of volcanics in the sedimentary rock, sitting on top of the batholith. Essentially, this area has been highly, highly eroded. The porphyry copper deposits are at surface. Most of the gold deposits have been eroded right down to their roots. The area has abundant alluvial placer gold all over the place, and that's because of the erosion has been so great, it's just eroded everything away. Now just to the north and on our southern edge of our property, there is a river that runs from the West to the East, it's called the Rio Santiago. And this is following a fault zone. And you can see there's no orange above that line. So that fault zone is actually a zone of movements. And the north part, Cordillera de Cutucú where we are, has moved downward in versus the stuff to the south. So the south, well -- the south has been moved upwards and then eroded back down. And so you see all these route zones and all the rest of it. Where we are in the Cordillera de Cutucú, most of the sedimentary and volcanic rocks are intact. They have not been heavily eroded, and the systems are there in their entirety or even buried, so we have porphyry copper targets that are buried. We have epithermal targets right at the surface, unlike the areas in the south. It makes for a little bit more difficult exploration but it also provides a lot of opportunity because it means that the systems are intact and major portions of it have not been eroded away and gone. So on the last slide, we didn't have a lot of labels in the -- in our area, and that's intentional. We do that to kind of thwart our competitors. But it's not like we haven't found anything. And unfortunately, there's been some reports on social media that Lost Cities is -- because it's not on our property, Logroño is not on our property, that means we haven't found anything. Well, good lord, we found a huge abundance of things. This is the Awacha porphyry target. And if you've been following along with the company, you know this thing quite well. It's -- we have chlorite-sericite pyrite alteration on surface. We have moly and copper on surface as well in the stream sediments. Tiria-Shimpia is a stacked mineralized system. It's probably a mantos, which is made up of lead, zinc, silver and barites. Very, very rich assays in places. And then for the very first time in the history of Ecuador, we've discovered copper, silver and sediments. Here's some nice chrysocolla you can see and then here, some banded rock with chalcocite in it. This is running almost 3% to copper with high silver, wonderful looking stuff. The target actually goes for 22 kilometers. It's complex in the fact that it's so damn big. And the question is where do you put the drill holes. Well, we've elected at the end of the day, just to say right now that it's beyond our capability to focus on this and on porphyry copper and on epithermal gold all at the same time. And the thing that's going to give us the biggest bang for the buck is going to be the porphyry copper and the gold. Remember, the gold price is close to 2,000 porphyry copper. We have somebody a competitor on our Southern Flank and their market cap at times has been as much as CAD 1.5 billion. Certainly, not lost on me. And you have to concentrate where you're going to get your biggest bang for the buck, as they say. We have not moved to look for shipwrecks. But I'm showing this title page of this book for a good reason. And this leads me on to the discussion of Metron. In 1998, this book was released September of 1998, I became aware of it and read it almost immediately when it came out. And it refers to the wreck of the S.S. Central America that went down in 1857 off the eastern coast of the U.S. There was a tremendous loss of life, but also it carried in today's dollar terms, $3 billion of gold to the bottom and including a large shipment to bullion from the U.S. Mint in San Francisco. A group out of Ohio started exploration, started the ball rolling to look for this thing in 1986. And they've retained Professor Larry Stone, or Dr. Larry Stone rather to assist them in the search, and I'll explain what he did in a second. But Larry is the lead researcher and one of the founders of the Metron Group, Metron Inc. And Dr. Stone has consented very nicely to be present at our reception at the PDAC coming up, and so he'll be there on Monday night and also at our booth to answer questions, Monday and Tuesday. What a lovely sight this is. The boxes that held this gold corroded a long, long time ago, and they're gone, but left the coin piles, the coin stacks intact. And there's some lovely, lovely gold bullion bars here, and this is what it looked like when it was brought up from deep and cleaned up a little bit and just a tremendous win. As far as I can ascertain, this is the richest gold ship wreck ever recovered, ever found in history. And part of it, the reason why it was rediscovered was through Bayesian Search theory. And you've heard me mention this before. We've retained the Metron Group in 2019 to help us with this. Now going back to the book. I read the book in 1998, I told Professor Octavio Latorre about it and actually gave him a copy of the book, because idea was that potentially we could use all the historical information that we were putting together to do a similar sort of Bayesian search. We decided at the time we just simply did not have enough information. So what we did, we waited -- actually I waited until after Aurania was sold in 2008, and then I had the financial capability and the time to work with Professor Octavio Latorre. Again, we spent a couple of years in the archives in Seville and we went to the Vatican, et cetera, et cetera, and we found all this stuff. So I got a hold of Dr. Stone in 2017. And then in 2019, we engaged with Metron to actually put together probability maps of our area and integrating a historical data together with the geochemistry, geophysics, geology, topography, LiDAR, everything we had at hand to develop probability maps. On this slide here, you can see the S.S. Central America, where it went down on the map. It's off of -- I think it's South Carolina, around Cape Hatteras. On the top right, you can see now these are cells, I believe they were 2 miles by 2 miles in size and the recovery vessel towed what they call a sonar bird behind it, and they just went across the entire field. They called it mowing the lawn, kind of euphemism. And you can see a whole bunch of different numbers here. And these are cells that have been awarded different probabilities. And of course, we scanned the highest cells first, up on the top right corner, but the wreckage was actually discovered where that red star is, right on the very edge of the search area. And of course, in 1988, they found it and they started to recover the treasure. And even today, this process is still going on, now with a different company. This was another success that Dr. Stone made earlier in his career, looking for the SS Scorpion, which was a U.S. Navy nuclear submarine that went down in 1968. And what a win this was, Scorpion was located just 260 yards, roughly 250 meters away from the highest probability cell. And then Metron in years later, one of the jobs that they did, they were engaged by the French government to look for Air France Flight 447 that sadly went down in the Atlantic. They were flying from Brazil to Paris and the -- with the assistance of Metron, the black boxes and the flight data recorder were recovered and found actually only 1 or 2 days into the search, the new search using the Metron data. So what's the story on our stuff? Well, this is what Metron came up with. In 2021, putting all of our data together and designing a probability map, now this is not put together in cells like you saw on the other diagrams here, but the hot colors relate to higher probability. And they said to me, well, this is what the algorithms have spit out and it appears to be that Logroño is somewhere along the Rio Santiago in the area of Tiwintza and Tiwintza is very close to the Peruvian border. And I looked at this at the time. Now Bayesian search theory is not an exact science. And in fact, Metron had been engaged to find Faucet, the very famous balloonist who went down a number of years ago and was killed sadly in an airplane crash. They thought using Bayesian search that he had gone down in the Nevada desert, his remains and his wallets were actually found in California by a hiker a couple of years later. And the reason that they got it wrong is because somebody reported seeing the plane flying over -- flying just overhead in Nevada, and they were absolutely mistaken. So the input data was incorrect and it generated an incorrect probability map. That is no fault of Metron. They were doing the right job. They just had the wrong inputs. And I thought perhaps when I looked at this, maybe they got it a little bit wrong because I was looking for a point source similar to what [indiscernible] had been, an old -- a mining camp. And of course, there had been some scattered reports of gold in the Rio Santiago, but nothing very, very substantial. The reason that Metron came up with this, not just geological reasons, but the historical reasons I can just summarize here. And Juan Lopez de Avendaño reported in 1588 that Logroño was only 0.5 league from the Rio Zamora. That same year 2 soldiers were drowned crossing the river to fight an uprising. In the mid 1590s, 7 soldiers drowned in an overturned canoe, trying to reach the downstream garrison at Santiago de Las Montañas, that's actually in Peru now. And the Jesuit Lorenzo Lucero' 1684 accounts, which we found in Vatican, documenting the history of the Jesuits, they accounted interviewing a very old woman who claimed that she could remember as a small girl hearing the church bells of Logroño from her village at the mouth of the Rio Zamora. This was considered by Metron to be the most compelling and convincing information from the historical data that we supplied to them. So this is, again, looking at the map here, and I want you to key in specifically, I don't have a cursor, I'm sorry, but down in the bottom left, you can see a junction of -- a three-way junction. So the Rio Santiago and the Rio Zamora, the Zamora is going off to the left. So at that junction there, that's where this old lady, this old woman said that she had lived as a girl and could hear the church bells. So just keep that spot in your mind because I'm going to show you some other maps here in a second. So everything changed for our company, really just within the last 2 months. What happened was that I became aware. Now we were working at Awacha, which is way, way at the other end of the property up in the north, more than 85 kilometers away. And I was not aware of this information at all until really fairly recently. This is a screen capture from a televised report, which is now actually linked on Facebook. We had it referenced in our press release. And there are a bunch of illegal miners who showed up on the Rio Santiago downstream from our property. They were working illegally. They basically claim jumped, legitimately-held claims, held by a cooperative -- a local cooperative of miners who had never even actually done any work themselves. These guys just muscled in and started working with 50 excavators. And here, you can see the kind of mess that they were making. They were sending the waste into the river, which is highly, highly illegal. All of their activities were very, very illegal. So -- and this, you can see a number concession block here, these kind of rectangular square blocks. And you can see the red stars and the red stars represented every place where these artisanal miners were working -- or illegal miners rather. You can also see that the river here is rather braided. It's wide and you can see it meandering around a bit. And that's very, very important for the story as well. Now the illegal activity is all finished. We actually flew a drone over this area about 10 days ago. We could not see any of the excavators there. This is the Army and President Lasso has come down very, very hard on illegal mining activity in Ecuador and you can see that this machine was captured just as recently as the 6th of May. So -- what I wanted to point out here in this map here, I'm moving long Carolyn, we'll be done soon. So on the right-hand side, you can see those blocks that are held by the artisanal miners. And you can see underneath that where the river is rather braided. Now on the left-hand side of the map, you can see just south of that label Apai, that big orange blob is one of our epithermal targets. It's there as a center zone. But south of that, the river is running in a gorge. And that gorge is 650 meters deep. It's a major, major feature, and the river is running quite straight, and then it starts to meander and twist and turn. And every time you see the river further downstream, it has a bunch of clips on one side or at the other. And then when you get even further downstream to the east, the terrain starts to flatten out. And what does this mean? Well, have we got that film coming up? Okay. How do I do that? Let's show the little film, please. [Presentation]

Great. Well, you can see in that little video that we shot there. There were 3 excavators, mining a port -- point bar on the side of the river. Now these guys are actually still there. And the reason they're there is because they barged those excavators upriver. There's no road access down into the gorge and the Army doesn't even know that they're there, I think. Those 3 excavators are recovering 1 kilo of gold, 1 kilo of gold every 10 days. It is very, very rich in that area. And they are almost directly south of our -- well, they are directly south of our property. And you can see also that the river is moving very, very fast in there. Very fast through that gorge, the gorge is basically vertically walled. So here's the thing. So the water is carrying the gold, the water is moving too fast, and that's on a bright sunny day. You can imagine when it's raining upstream, it is raging, raging torrents, and those guys are taking real chance having their excavators there that they don't get washed into the river and downstream. Eventually, that's what will happen if they leave them there. So the water is moving down, down, down the stream. And then when it gets to the east, where those big blocks of alluvial claims are, the river flattens out -- widens out, rather, the velocity in the river drops and the gold can no longer be held in suspension or moved by saltation, which is basically rolling all the bottom or bouncing along the bottom. And this in alluvial mining parlance is considered to be the drop zone, and this is where all the gold is going to accumulate. And probably, this is where historically Logroño was. So Logroño was an encampment of about 20, maybe 30 Spaniards living within a wooden palisade and controlling about 2,000 indigenous people who would have lived outside [Indiscernible]. And those people would have been made to work in the river each day, hand panning. But the historical accounts are very specific in the very first year of activity, Logroño yielded 4,400 ounces of gold. Now if any of you watch that program on TV, Goldrush, you'll see that none of the guys working in Alaska or in Yukon or anything like that, even with heavy equipment, manage 4,400 ounces in a year. So this is pretty darn rich. And what I think has happened here geologically is you see where a pie is and how close it is to the gorge of the Rio Santiago. If this -- if the river is actually occupying in East West fault and you can see there's another structure to the south that runs north, south. At that intersection there, almost certainly, that had to be a zone of weakness where there was another geothermal events and another continuation of the Apai center to the south. However, now it's totally gone, and the ground has been excavated from surface, the [indiscernible] surface all the way down to 650 meters depth. And the whole system, I hypothesize that even 1, maybe 2, Fruta del Norte has actually been washed away and it's gone downstream. So what does that mean for our company? Well some people have said, "Well, this -- great job, guys, but close, but no cigar." Well, I really do think that the Apai anomaly here has, potentially in its southern parts, contributed part or all of this gold. And our intention is to prospect this very, very intensely and very heavily now. You can see a couple of an orange circles here, and we've got some gold at the pan concentrates, but this is actually kind of funny and a little bit embarrassing. We actually rediscovered the road. They had been using -- the government had been using gravel from downstream to construct the roads. So this road actually today constitutes a 20-kilometer long geochemical anomaly in gold. It's a red herring. But nevertheless, that blue triangle you see is legitimate, and that's out of rock. And we've got as high as 24 parts per million of mercury out of that, and that is a very, very high result. The historical outcrop -- discovery outcrop for Fruta del Norte had 27 ppm mercury. So we're quite excited about this. And well, I'll explain a couple of things quickly further along here. So as I said, as you go down further to the east, one side or the other is constrained by cliffs. So there's not much in the way of alluvials. But our guys taking samples in the Rio Santiago itself, in the river, right on the banks, we're recovering gold like this. And you can see, this is gold and black sands, one batea for each sample and it's gold, gold, gold. This would be considered anywhere to be a very, very rich results. So it's very exciting for us with proximity of Kuri-Yawi, which is just east of the river network and Apai, which is just immediately north of the river network. And we think potentially these things are maybe the sources of the gold. But even further along than that, I think we've got some very compelling evidence now. Now a lot of you have seen this photograph before. It's a very curious looking thing. We found this actually 4 years ago. They look like fingers. And an outcrop, this is what it looks like. We've got a hammer next to it. And these very, very curious vertical structures, what the heck could they be? Well, here's another shot of another one, a loose block that was recovered in a stream at Yawi. And if you flip it over, you see this kind of stuff. And all these little circular holes here, and boy, what on earth could this be? Well, this is -- I've shown this to many geologists and most people can't come up with a hypothesis because this kind of stuff is very, very rarely preserved in the geological record. What it is, it's remnants of silica terrace. And this is from Yellowstone Park, and you can see all the steam issuing from the ground, especially on the left-hand side from the geysers and from the hot springs, you can see a low angle silica terrace. And as that silica terrace moves out, it incorporates things that grow in marshes, like sedges, grasses, bullrushes, things like that. You can see lots of water splashing around here, you see structures that look kind of like coral. And this is a deposition of silica. And the silica is going to enclose anything that's close by and actually kind of quasi-fossilize it. So these things that look like fingers of an outstretched hand are actually remnants of the [Indiscernible] surface there, the old surface where the grass was growing. And it tells you that you're at the very, very top of a geothermal system. Now in typical low-sulfidation epithermal deposit like Fruta del Norte, this is what you see. You see a silica center near the top, and we're finding this all over the place on our property, because if you remember back, I said that the sediments are preserved on our property, the sedimentary cover and the systems are intact. However, this is not where you're going to find the gold. The gold is going to be down in the middle here in the gold zone, where the fluids carrying the gold boiled, boiled, and we're no longer able to carry gold in solution. So the gold drops out with other metals in vein structures. But if you're up on the top here, how the hell do you know where to drill to get down into the gold zone? It's going to be maybe 200, 300, 400 meters below where you are, but it's a bit of a question mark where actually to drill and hit the thing. Now the bottom here in green, these are target cluster for Aurania. And you can see the scale here, 30 kilometers and then compared to the North Geyser Basin at Yellowstone Park, it's a similar sort of dimension. The Yawi target by itself is about 8 kilometers across, and you're confronted with a situation like this. And this is from Yellowstone and look at the silica terrace, it's going way, way off into the distance. So if you can imagine, this is active today, but imagine this is one of our targets. Where the heck do you drill to find the plumbing system where the gold is going to be, right? Well, fortunately, for us, fortunately for us, the area is not flat. If the area was flat, we'd be confronted with a lot of difficulty, but we have a lot of topography in our areas. And the topography is caused by 2 things, one is block faulting, both up and down; and the other is where rivers and streams have cut down through the sedimentary cover and expose things. So I'm going to share something with you right now, which I think is rather shocking, but certainly very, very, very positive for our company. Now as a result of the work that was -- we started to focus in on the gold situation, especially along the Rio Santiago, a cousin of one of our geologists came to us and said a few years ago, I had a minor show up on my property at my farm with an excavator and start digging holes without permission. And he said he chased them off, but he was -- there are a bunch of holes that are all filled in with water and could we have a look and see what's going on. So a couple of my guys went down there, and they saw that the area was a land slide. And they were -- this excavator had been sampling on the toe of the land slide area and come down a rather steep hill. And our guys, when they took their own samples, in one sample here, they found 3 pieces of gold. And you can see this gold is not rounded like hockey pucks. This gold is very, very close to the source. The other minerals in here, we've got a lot of magnetite in black. We have chromites in black. We have some barite in the white here, and we have some epidote, which is green. And there's also some pyrite in here -- here and there, which is oxidized a bit and got a little bit rusty. But here's the real kicker. Also in the sample, when they looked a little bit closer at it, they found 4 pieces of this bright red mineral that you see in the middle of the field of view here, and that mineral is cinnabar. Cinnabar is mercury sulfide. Now this is naturally occurring mercury. This is not mercury that's been put in by illegal miners or anything like that. This is natural mercury, which occurs typically in epithermal type gold systems. Fruta del Norte has a lot of cinnabar and it has other mercury minerals like realgar in it as well. Now the hardness of cinnabar is between 2 and 2.5. It's about the same as your finger now. It will not tumble, it cannot be transported for long distances because it will turn into dust. So we found 4 grains of this cinnabar in one sample. This is hot off the press stuff. I mean they just found this last Friday, right? Because one of our guys took the heavy mineral concentrate back to [Indiscernible] and was looking at it under the microscope and lo and behold, it's kind of a eureka moment here. So I consider this to be very, very positive for us because it's telling us that there's both gold and mercury naturally occurring in the soil profile, and almost certainly, there is -- it's in the colluvium, and almost certainly, there's going to be a gold zone buried under the soil, up the slope from this. And so in order to investigate this further, I've got guys doing pit samples over this, and then we will be doing a comprehensive soil survey over the area. And I think quickly, we will be able to generate a very, very good and precise gold target on this. So this is actually gold that's in the subsurface, subcropping what we call subcropping. And it will be a lot easier thing to hit than what we've been doing before drilling our epithermal targets down through the center. This is very, very positive for the company and I'm overjoyed that this was found. So just in conclusion, this is a slide from the good old days. Here is the late professor here on the left. This is the modern day Logroño. This is not the -- where we are today. We have not found any archeology. We don't expect to find any archeology. These people were focused on mining and not building things that were going to be preserved for 500 years. Anything in terms of archeology that was built alongside the river would have been swept away during the rainy season long, long ago. So we don't expect to find anything there. And in fact, the Shuar, who are our local stakeholders, have never ever found anything in the area and certainly have never reported anything like that. We continue to do, in fact, we just did an engagement last week with 5 villages down along the Rio Santiago because we consider this to be a very, very important area. I think there are multiple gold sources that are providing for that gold alluvial. But these are very, very important folks. We engage with them. We're very transparent what we do with them. And we're just this last week, we were doing nutritional workshops for them and being received very, very well. So that's about it. As you know, you can always get a hold of us. We have all of our e-mails here. So operator, please, let's prompt for the questions.

[Operator Instructions] The first question is from Mark Reichman with NOBLE Capital Markets.

Really appreciate the comprehensive presentation. Just had a few questions. First, on the exploration program, Keith, if you could just kind of walk us through the highest priority targets? I know that in the gold, you've mentioned Kuri-Yawi, Kuripan. Now I'm kind of assuming Apai moves into that lineup. And then on the copper side, Awacha and Tatasham, so could you just kind of give us the sequence through the balance of the year, how long that the environmental impact statement will take? And when you begin drilling at Tatasham and Awacha, just a little more detail. And then also, when you consider that you spent CAD 3.8 million on exploration and evaluation, every year, you've exceeded your requirement in terms of the required expenditures for exploration. How do you see that falling out this year?

Well, okay, First, I'll deal with the gold situation. Of course, the situation is very, very much changed from even where it was a month ago. So it's quite fluid. And as I've said, we've got to work as fast as we can, as hard as we can to generate things that are going to actually get our share price up and get a lot more visibility for the company. So we're going to be pursuing these targets down in the south, a lot harder than we have in the past. In fact, we really haven't done any gold work for about 1.5 years here. And that's unfortunate, we kind of got carried away on other stuff. So we're focusing down on that. Tatasham and Awacha, we both -- we have a bit of geology still to do on both targets. And we, very recently -- we just had Steve Garwin, our copper porphyry expert, teaching our geologist what's called the Anaconda mapping method. It's a method that he was taught by ex-employees of the Anaconda Company many, many years ago, and he's kind of passed that information on to the next generation, on to our young guys. And it's a fantastic thing. It was used to locate the discovery outcrop at El Pala for still gold and also to discover Porvenir, their other porphyry copper. So we're going to be using it on both of those targets, virtually right away. And also, we're starting the process with the governments to provide legal framework to go ahead and do our drilling. Now we don't control the process. It's a bit of a black box. We've done it many, many times before though, and we know how to kind of cut through the bureaucracy. Nevertheless, it will take several months to get permits to drill these 2 targets. And also, we're consulting with the Shuar people who live in the general area. We already have agreements with the Shuar to operate in these areas, signed agreements. But this goes up to a next level. And we need to have some separate agreements done here. These people -- the folks here are very, very anxious to see us start. They want to provide some of the folks from their own villages as part of the labor force. And of course, they -- this is one of the very few ways that they can earn any money. So I think -- I hope that I've answered your questions there, Mark.

Well, just in terms of Awacha and Tatasham, will Awacha come before Tatasham in terms of the drilling?

I can't tell you. It all depends on permits.

Okay. Okay. And then on the gold, I think that's fantastic actually with Logroño. That's kind of where you want it, in terms of downstream from our concession block. So Kuri-Yawi and Kuripan were initially kind of your targets. Are you saying now you'll probably focus more on Apai and some of those areas that you just talked about in terms of when you address the finding of Logroño?

Well, not necessarily. Well, we certainly know that there's a place where the gold is or has eroded. And I don't think a lot of the shareholders or people reading the press release understand the difference between placer gold and hard rock gold. Hard rock gold is the initial source, placer gold is the gold that's washed downstream. And it's considered placer gold or alluvial gold. And I don't think a lot of people actually understood that properly. It has to have a source upstream. And then it's carried downstream by the water. Of course, you understand this, but I don't think everyone understood it. So we think that is very compelling evidence that, that source is or could be on our property. In any case, it's got us to go back and look at these properties, these anomalies in much, much more detail and specifically look in places where there are what we call scarps, cliff faces, things like this, places on the topography where potentially you have exposures like this land slide area, where there has to be some kind of vertical height. And that's going to be the clue there, where potentially the top of the center, which doesn't have any gold where it has been eroded away and it's gone, and you're able to see what's underneath into the plumbing system. So I really -- essentially, what I have to do is throw people at these targets and do much, much closer mapping geological mapping and prospecting than has ever been done before. And I think it's going to yield more and more interesting results.

And then just lastly, is it too early to talk about the budget for exploration for the balance of the year? Or I'm assuming the drilling of the fourth quarter, there'll be more spending towards the end of the year?

Yes. Yes. I think it is a little bit early. And the market has been rocky and our share price, unfortunately, I did expect us to see a big rebound in the price as a result of this news, but I think really people didn't get past maybe the first paragraph of the press release that said it wasn't on our property. I think it's -- as you have pointed out, so well, Mark, it had -- the gold has to have the source, it's coming from upstream. And so in that regard and especially finding the cinnabar, I'm very, very encouraged. So obviously, the drilling Awacha and drilling Tatasham is going to cost a bunch of money here. But let's see what happens. As I did say, I've just approached in the last 48 hours by one of the majors who is looking to do something because they need property. And let's just see what shakes out of the trees here. We've spent about 5 years at this. I think a lot of the heavy lifting has been done, and we've generated all kinds of fabulous targets that many companies would give their eyeteeth to have. And I think, I personally, my job has to be a concentration in getting the -- presenting our projects as very enticing bait for the majors. And at the end of the day, our exit strategy is not to put these things into production. We never wanted to do that, and we've said that. We want to move them on but, get the best price and get the best deal that we can.

[Operator Instructions] This concludes the question-and-answer session. I would like to turn the conference back over to Dr. Keith Barron for any closing remarks.

It looks like we do have one more question. Yes.

The question is from Mark Reichman again of NOBLE Capital Markets.

Yes. I just had one follow-up question. Keith, you mentioned the major. And so you've kind of said all along that many of those noncore projects you were pursuing joint ventures or other arrangements. So when you look at the concession package as it stands now, obviously, the Peruvian assets, that's kind of a natural to find. To put that in someone else's hands. But in terms of Ecuador, how are the discussions progressing? Or is there anything new on that front?

Well, there's nothing concrete yet that I can talk about. It has been very difficult, Mark, over the last 2 years, 2.5 years because of the pandemic. We can't -- we haven't been able to get any face-to-face meetings with anyone. These very, very large corporations are very risk averse. And they -- little juniors like us, we don't have a problem meeting face-to-face with mask, but these larger companies don't even want to be in the same room or on the same floor of a building with somebody. So it's been difficult. Lots of these folks have been working from home. And so -- but I will be I'd be talking to some other people at the PDAC, which is coming up just in a week. And I'm going to be working as hard as I can to make things happen.

Well, I was thinking of that too, Keith, because I know conferences attendances -- in-person conference attendance has been kind of running low, lower than expectations, at least based on feedback that I've received, but it seems like the attendance of the PDAC should be pretty strong. So that might be a good opportunity for the company in terms of meeting face-to-face and striking up some conversations. So it would be interesting to see how that progresses.

Actually, Mark, every hotel room is gone. And I think the attendance is actually going to be quite good. Now on the Monday, the Monday is actually scheduled to be Ecuador Day. And I think from about 8:30 in the morning until 2:00 in the afternoon, there will be talks on Ecuador in the convention center. And then there will be a reception both on Monday night and Tuesday nights by the Ecuadorian government. We are doing a reception at the Royal York Hotel starting at 5:30 on the Monday night -- or 5:00 rather, Monday night, and I will be there and so will Dr. Larry Stone. I'll be giving you a short presentation. So will Larry. And I think it will be a lot of fun.

Well, it will be a good opportunity to put the spotlight on Ecuador and Aurania as well.

Agreed.

This concludes the question-and-answer session. I would like to turn the conference back over to Dr. Keith Barron for any closing remarks.

Well, thank you very much. I really appreciate everyone watching and listening the presentation at this AGM. And I invite anyone who's going to be in Toronto to come on by our reception at the Royal York on the Monday night or come by our booth, we'll have the booth Monday, Tuesday and Wednesday, on the convention floor. And I will be available and you can meet with me face-to-face and without a mask, even. And I'll be available to answer any questions. And as always, if you have questions, refer to the presentation, which is online, and you have my e-mail there. Thank you very much.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.