Aurania Resources Announces $6.35 Million Rights Offering CEO, Keith Barron Committed to Backstop up to $4MILLION
TSX-V: ARU
NR 2019-02
AURANIA RESOURCES ANNOUNCES $6.35 MILLION RIGHTS OFFERING
CEO, KEITH BARRON COMMITTED TO BACKSTOP UP TO $4MILLION
NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Toronto, Ontario, January 28, 2019 – Aurania Resources Ltd. (TSXV: ARU) (“Aurania” or the
“Company”) is pleased to announce that it will be undertaking a rights offering to raise up to $6.35 million.
The Company is offering rights (the "Rights") to purchase common shares (“Common Shares”) to eligible
shareholders of record, at the close of business on the record date of February 4, 2019, on the basis of one
right for each common share held (the "Rights Offering").
Basic Subscription
For every fourteen (14) Rights held, eligible shareholders can subscribe for one Common Share of
the Company upon payment of the subscription price of $2.70 per Common Share (the “ Exercise
Price”);
The subscription price for each Common Share has been priced at a discount of approximately 15%
to the closing share price on January 28, 2019, as per regulatory requirements;
The Rights Offering will be conduc ted in Canada and will be ava ilable to Canadian resident
shareholders and to shareholders outside of Canada who are eligible under certain exemptions (see
details below);
The Rights will trade on the TSX Venture Exchange under the symbol ARU.RT commencing on
February 1, 2019. The Rights will expire at 5:00 p.m. (Toronto time) on March 6, 2019 (the "Expiry
Time") and will become void and of no value;
Eligible shareholders who fully exercise their Ri ghts will be entitled to subscribe for additional
Common Shares, if available as a result of unexercised Rights prior to the Expiry Time, subject to
certain limitations set out in the Company’s Rights Offering Notice (“Notice”) and Rights Offering
Circular (“Circular”) (see details below on Subscription for Additional Shares);
The shares purchased through the Rights Offering will be free-trading (and therefore not subject to
the four-month hold that normally applies to shares issued through a private placement); and
The Company intends to use the net proceeds of the Rights Offering to fund exploration expenses,
including scout drilling, concessions fees to maintain the Lost Cities – Cutucu Project in Ecuador
in good standing, and general and administrative expenses.
Details of the Rights Offering will be set out in the Notice and Circular which will be available under
the Company's profile at www.sedar.com and on the Company’s website at www.aurania.com.
Eligible Holders
The Notice, accompanying rights certificate, and form of Subscription will automatically be mailed to each
registered shareholder in Canada and shareholders who are resident in Canada who own their shares through
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an intermediary, such as a bank, trust company, secu rities dealer or broker (in Canada), will receive
materials and instructions from their intermediary (collectively the “ Eligible Holders”). The Company
encourages shareholders to review these documents carefully.
Eligible Holders who wish to exercise their Rights mu st forward the rights certificate, together with the
applicable funds, to the Rights Agent, TSX Trust Company, located at 301-100 Adelaide Street West,
Toronto, ON M5H 4H1, on or before the Expiry Time.
Ineligible Holders
Shareholders who are resident in a ju risdiction outside of Canada (the "Ineligible Holders"), may be able
to participate in the Rights Offering under certain exemptions. The Company will not issue or forward
rights certificates to Ineligible Holders, however, a letter will be sent to them which will:
describe the conditions that must be met, and the procedures that must be followed in order for an
Ineligible Holder to participate in the Rights Offering; and
Advise them that their Rights will be held by TSX Trust Company who will, prior to the Expiry
Time, attempt to sell any unexercised rights of Ine ligible Holders on such dates and at such prices
as it determines in its sole discretion.
Ineligible Holders who wish to participate in the Ri ghts Offering and are unsure of whether they meet the
required exemptions are encouraged to contact the Rights Agent or the Company directly.
Subscription for Additional Shares
There are currently 32,915,316 Common Shares of the Company outsta nding. If all of the Rights issued
under the Rights Offering are validly exercised, a to tal of 2,351,094 Common Shares will be issued under
the Rights Offering with gross proceeds of approximately $6,350,000.
Eligible Holders who fully exercise their Rights will be entitled to subscribe for additional Common Shares,
if available, as a result of unexercised Rights prior to the Expiry Time, subject to certain limitations set out
in the Company’s Circular.
Stand-By Commitment
In connection with the Rights Offering, the Company has entered into a stand-by purchase agreement with
Dr. Keith Barron, the Chairman and Chief Executive Officer of the Company, in an amount of $4,000,000
(the “Stand-By Commitment”).
Related Party Transaction
In connection with the Stand-By Commitment, Dr. Keith Barron, Chairman and Chief Executive Officer of
the Company, will acquire up to 1,481,482 Common Sh ares. The acquisition of securities pursuant to the
Rights Offering by Dr. Barron is considered a "related party transaction" pursuant to Multilateral Instrument
61-101 - Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is
relying on an exemption from the formal valuation requirements of MI 61-101 available on the basis of the
securities of the Company not being listed on specified markets, including the Toronto Stock Exchange,
the New York Stock Exchange, the American Stoc k Exchange, the NASDAQ or certain overseas stock
exchanges. The Company is also relying on the exemption from minority shareholder approval
requirements under MI 61-101 as the fair market value of the participation in the Rights Offering and Stand-
By Commitment by Dr. Barron does not exceed 25% of the market capitalization of the Company.
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Conversion of Convertible Debenture
The Company also announces the i ssuance of 877,192 Common Shares fro m treasury in connection with
the repayment of a US$2.0 million convertible debenture issued by the Company to Dr. Barron on May 29,
2018 (the “Debenture”). As dictated by the terms of the Debenture, the unpaid principal amount of US$2.0
million, was converted into Common Shares at the c onversion price of C$3.00 per Common Share (the
“Conversion”), fixed at the March 20, 2018 Bank of Canada exchange rate of $US 0.76 to C$1.00 such
that the maximum number of Common Shares to be i ssued upon the exercise of the conversion right shall
be 877,192 Common Shares.
Early Warning Report
After giving effect to the Conversion, Dr. Barron will own 17,125,065 Common Shares, representing 52.0%
of the Common Shares on a non-diluted basis and 52.6% on a partially diluted basis. The Common Shares
issued to Dr. Barron under the Conversion represent an acquisition of less than 2% of the issued and
outstanding shares of the class, however Dr. Barron’s ownership percentage of the issued and outstanding
Common Shares since the last Early Warning Report filed on May 2, 2017 has decreased by 11.8% on a
non-diluted basis and 13.0% on a partially diluted basis, as a result of dilution caused by Common Share
issuances.
The Common Shares are held by Dr. Barron for inve stment purposes, and depending on market and other
conditions, Dr. Barron may from time to time in the futu re increase or decrease his respective ownership,
control or direction over securities of the Company through market transactions, private agreements, or
otherwise. As the number of Common Shares owned or controlled by Dr. Barron since the last Early
Warning Report has decrease by more than 2% of the outstanding shares of the class, in satisfaction of the
requirements of the National Instrument 62-104 – Take-Over Bids And Issuer Bids and National Instrument
62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues , an Early
Warning Report for Dr. Barron will be filed under the Company’s profile at www.sedar.com.
Extension of Promissory Note
The Company is currently indebted to Dr. Barron fo r $580,500, pursuant to a 2017 promissory note (the
“Promissory Note”). Concurrent with the above described Ri ghts Offering, the Company has negotiated
a further extension of the Promissory Note with Dr. Barron, to defer the maturity date from May 29, 2019
to May 29, 2020 (the “ New Maturity Date ”), whereupon the principal amount and any accrued interest
will be payable to Dr. Barron. All other terms of the Promissory Note shall remain in full force and effect.
Dr. Barron is an “insider” of the Company and, as su ch, the extension of the Promissory Note with Dr.
Barron is considered a "related party transaction" pursuant to MI 61-101. The Company is relying on the
exemption from minority shareholder approval requirements set out in MI 61-101 as the fair market value
of the Total Indebtedness does not exceed 25% of the market capitalization of the Company, as determined
in accordance with MI 61-101.
Update on Scout Drilling Program
Final preparations for the commencement of scout drilling at Crunchy Hill are being made and the Company
expects to start drilling imminently.
About Aurania
Aurania is a junior mineral exploration company engaged in the identification, evaluation, acquisition and
exploration of mineral property interests, with a focu s on precious metals and copper. Its flagship asset,
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The Lost Cities – Cutucu 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/aurania ltd/, Twitter at https://twitter.com/auranialtd,
and LinkedIn at https://www.linkedin.com/company/aurania-resources-ltd-.
For further information, please contact:
Carolyn Muir
Manager – Investor Services
Aurania Resources Ltd.
(416) 367-3200
Dr. Richard Spencer
President
Aurania Resources Ltd.
(416) 367-3200
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.
Forward-Looking Statements
This news release contains forward-looking information that involves substantial known and unknown risks
and uncertainties, most of which are beyond the contro l 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 stat ed condition or result to occur. Forward-looking
statements may be identified by such terms as “b elieves”, “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 nat ure they involve inheren t 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 su ch forward-looking information.
Forward looking information in this news release includes, but is not limited to, Aurania’s objectives, goals
or future plans, statements, exploration results, pot ential mineralization, th e corporation’s portfolio,
treasury, management team and enhanced capital ma rkets 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 fr om such forward-looking
information include, but are not limited to, failure to identify mineral resources, failure to convert estimated
mineral resources to reserves, the inability to complete a feasibility study which recommends a production
decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain
required governmental, regulatory, environmental or ot her project approvals, political risks, inability to
fulfill the duty to accommodate indigenous peoples, un certainties 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 those
risks set out in Aurania’s public documents file d 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.
This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be
any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be
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unlawful, including any of the securities in the United States of America. The securities have not been and
will not be registered under the United States Securities Act of 1933, as amended (the “1933 Act”) or any
state securities laws and may not be offered or sold within the United States or to, or for account or benefit
of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and
applicable state securities laws, or an exemption from such registration requirements is available.