How does the “Indiana Jones of mining” use exploration technology?
Nicknamed the ‘Indiana Jones of Mining’, Dr. Barron is an exploration geologist with over 33 years’ experience in the mining sector. He has consulted on all continents except for Antarctica, searching for commodities such as gold, silver, diamonds, uranium, copper, platinum, and industrial minerals. In 2001 he privately co-founded Ecuador gold explorer Aurelian Resources, which was listed on the TSX-V in 2003 and made the colossal Fruta del Norte gold discovery in 2006. The company was bought by Kinross Gold in 2008 for $1.2 billion. Mines and Money caught up with him just before he flew out to Ecuador.
Keith Barron, CEO & Chairman, Aurania Resources
Andrew Thake, Mines and Money
Mines and Money (MM): Can you tell me a little bit about Aurania Resources?
Keith Barron (KB): Aurania Resources has been around for a number of years. Our top project is in Ecuador where we put together a contiguous land parcel of 208,000ha in March 2016. This is in the Cordillera de Cutucu region in South East Ecuador near the Peruvian border. We call this our Lost Cities Project.
MM: What is the historical background to the Lost Cities Project?
KB: I first came up of the Lost Cities Project in 1998 after meeting a Professor of History in Ecuador. He told me about two abandoned mines of the Spanish conquistadores, Logroño de los Caballeros and Sevilla del Oro. In 1605 these mines were abandoned.
MM: What made you sure that gold could be found there?
KB: Firstly, there was a precedent. In 1981 two boys discovered a Spanish mine that had been abandoned in 1603. Within 1 month there were 25,000 miners working there. Overall, 2.7 million ounces of gold were mined.
Secondly, the Professor of History had started work for the Ecuador government and had found hundreds of documents which indicated gold was at Logroño de los Caballeros and Sevilla del Oro.
So, we started exploration in January 2001.
MM: What happened then?
KB: Our plans got way laid when we found gold elsewhere at Fruta Del Norte. We formed Aurelian Resources which we eventually sold it to Kinross in 2008. Ut ended up producing 14 million ounces of gold.
However, after the sale we returned to our original plan of searching for the Lost Cities. I spent the next few years travelling the world, visiting archives in places such as The Vatican, tracking down contemporary maps of the period.
In 2016, the Ecuador Government’s 7-year moratorium on purchasing new land finished so we could proceed.
MM: Many investors I talk to complain that Latin American governments have that cyclical mentality towards mining. Firstly, they realise they have natural resources but don’t have the know how to mine it. So, they then encourage foreign mining investment. But as soon as a deposit is found and the mine gets built, taxes go up, new mining codes are put in place, and the project doesn’t look so attractive to both the mine owner and the investor. What’s different about Ecuador?
KB: Ecuador has already been through that learning cycle. They realise they need outside expertise. They realise they need capital. It has tossed out socialist measures that it had in place. There are now 28 active mining companies in Ecuador.
A key catalyst was the tax agreement with Lundin who bought Fruta Del Norte. They are now looking at producing gold from September 2019. This will contribute 3.5% of Ecuador’s GDP. Tongling Non- Ferrous Metals Group and China Railway Construction are also opening a porphyry copper open pit mine.
Ecuador has realised it can’t keep on being reliant on oil. The oil price is see-sawing and its reserves are depleting. After oil, Ecuador’s biggest exports are shrimps, flowers and bananas. It needs mining.
MM: What do you think of the new Mining Minister elect?
KB: Mining Minister Cordova had been an appointee of the last President, Rafael Correa, so it was no surprise when Lenín Moreno, the new President, wanted to replace the old guard with the new.
Along with the other mining companies we had a meeting with Mining Minister elect last week. She was keen to emphasis it was going to be business as usual and that she had no intention to roll back the clock.
MM: What makes Aurelian Resources stand out from all the other mining projects?
KB: Our expertise, and that we have a tried and tested technical method.
Unlike many other mining juniors, I have significant skin in the game owning 56% of the shares. The shareholders structure is tight – I intend to make my shareholders money in the same way that I made them money at Fruta Del Norte.
Our Lost Cities story resonates with retail investors. When we were covered by Bloomberg last year our share price went up dramatically.
MM: You’ve been dubbed the ‘Indiana Jones of mining”
KB: We do have great real estate. However, I’m very fortunate to have a promoter’s dream in terms of a story to sell. You can have the best mining project in the world but at the end of the day you need to know how to promote it.
MM: How does the ‘Indiana Jones of mining use technology to aid exploration?
KB: I am very interested in LIDAR (Light Detection and Ranging), which is a remote sensing method that uses light in the form of a pulsed laser to measure ranges (variable distances) to the Earth.
It has also been used to uncover lost cities in Honduras, Cambodia and Mexico. In each of these instances, LIDAR helped by being able to search through jungle areas covered by dense foliage.
Whilst the above ground mining settlements at Logroño de los Caballeros and Sevilla del Oro will have disappeared (they were made of wattle & daub and thatched roofs), LIDAR will help us identify rock dumps, trenches and old roads.
208,000ha is a large area. LIDAR will enable us to do exploration via helicopter and will help us cut 1 to 2 years off the exploration cycle. If it wasn’t for LIDAR we’d have to do stream sediment work which is time consuming, often taking a 4 to 6-week turnaround to test at the lab.