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EX-32.1 - EXHIBIT 32.1 - AURORA GOLD CORP | ex32_1.htm |
EX-31.1 - EXHIBIT 31.1 - AURORA GOLD CORP | ex31_1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
(Mark One)
T
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For the
quarterly period ended June 30, 2009
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF
1934
|
For the
transition period from _ _ _ _ _ _ _ _ _ _ to _ _ _ _ _ _ _ _ _
_
Commission
file number 0-24393
AURORA
GOLD CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
|
13-3945947
|
|
(State
or other jurisdiction of incorporation or organization)
|
(IRS
Employer Identification No.)
|
|
Baarerstrasse
10, 1st
Floor, Zug,
|
6300
Switzerland
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
+41
7887-96966
(Registrant’s
telephone number, including area code)
(Former
name, former address and former fiscal year, if changed since last
report)
Indicate
by check mark whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
YES T NO o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
YES T NO o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and smaller
reporting company” in Rule 12b-2 of the Exchange Act.
Large
accelerated filer o Accelerated
filer o Non-accelerated
filer o (do not
check if a smaller reporting company) Smaller
reporting company T
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
YES o NO T
APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE
YEARS
Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by
court.
YES o NO o
APPLICABLE
ONLY TO CORPORATE ISSUERS
Indicate
the number of shares outstanding of each of the issuer’s classes of common
equity, as of the latest practicable date: 66,491,855 shares of Common Stock
were outstanding as of January 27, 2010.
AURORA GOLD CORPORATION
This
quarterly report contains statements that plan for or anticipate the future and
are not historical facts. In this Report these forward looking statements are
generally identified by words such as “anticipate,” “plan,” “believe,” “expect,”
“estimate,” and the like. Because forward looking statements involve future
risks and uncertainties, these are factors that could cause actual results to
differ materially from the estimated results. These risks and uncertainties are
detailed in Part 1 – Financial Information - Item 1. “Financial Statements” and
Item 2. “Management’s Discussion and Analysis of Financial Condition and Results
of Operations.”
The
Private Securities Litigation Reform Act of 1995, which provides a “safe harbor”
for such statements, may not apply to this Report.
INDEX
PART
1 – FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements
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||
3
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|||
4
|
|||
5
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|||
6
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|||
Item
2.
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9
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||
Item
3.
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18
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Item
4T.
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18
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||
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|||
PART
II – OTHER INFORMATION
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|||
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|||
Item
1.
|
20
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||
Item
1A.
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20
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||
Item
2.
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20
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||
Item
3.
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20
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||
Item
4.
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20
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||
Item
5.
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20
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||
Item
6.
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20
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||
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|||
23
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PART
I Financial
Information
(An
exploration stage enterprise)
|
||||||||
Interim
Consolidated Balance Sheets
|
||||||||
June
30, 2009 and December 31, 2008
|
||||||||
(Expressed
in U.S. Dollars)
|
June
30
|
December
31
|
||||||
(Unaudited)
|
2009
|
2008
|
||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 381 | $ | 16,511 | ||||
Prepaid
expenses and other assets
|
25,770 | 30,555 | ||||||
Total
current assets
|
26,151 | 47,066 | ||||||
Equipment,
net
|
100,733 | 88,973 | ||||||
Total
assets
|
$ | 126,884 | $ | 136,039 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 782,575 | $ | 639,066 | ||||
Accounts
payable and accrued expenses - related party
|
52,181 | - | ||||||
Loans
payable
|
500,000 | 500,000 | ||||||
Total
current liabilities
|
1,334,756 | 1,139,066 | ||||||
Convertible
notes payable
|
603,600 | 518,025 | ||||||
Accrued
interest on convertible notes payable
|
62,317 | 34,488 | ||||||
Total
liabilities
|
2,000,673 | 1,691,579 | ||||||
Stockholders'
Equity (Deficiency)
|
||||||||
Common
stock
|
||||||||
Authorized:
|
||||||||
100,000,000
common shares, (December 31, 2008 - 100,000,000) with par value $0.001
each
|
||||||||
Issued
and outstanding:
|
||||||||
58,071,855
(December 31, 2008 - 58,071,855) common shares
|
58,071 | 58,071 | ||||||
Additional
paid-in capital
|
12,110,779 | 12,110,779 | ||||||
Accumulated
deficit during the exploration stage
|
(13,978,665 | ) | (13,691,702 | ) | ||||
Accumulated
other comprehensive income (loss)
|
(63,974 | ) | (32,688 | ) | ||||
Stockholders'
equity (deficiency)
|
(1,873,789 | ) | (1,555,540 | ) | ||||
Total
liabilities and stockholders' equity (deficiency)
|
$ | 126,884 | $ | 136,039 |
The
accompanying notes are an integral part of these consolidated financial
statements
AURORA
GOLD CORPORATION
|
||||||||||||||||||||
(An
exploration stage enterprise)
|
||||||||||||||||||||
Cumulative
|
||||||||||||||||||||
Interim
Consolidated Statements of Operations
|
October
10
|
Three
months
|
Three
months
|
Six
months
|
Six
months
|
|||||||||||||||
(Expressed
in U.S. Dollars)
|
1995
(inception)
|
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||||
(Unaudited)
|
to
June 30
|
June
30
|
June
30
|
June
30
|
June
30
|
|||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||
Expenses
|
||||||||||||||||||||
Administrative
and general
|
$ | 1,317,917 | $ | 33,252 | $ | 52,728 | $ | 51,567 | $ | 72,911 | ||||||||||
Depreciation
and amortization
|
92,265 | 3,134 | 3,914 | 5,946 | 7,640 | |||||||||||||||
Imputed
interest on loan payable - related party
|
1,560 | - | - | - | - | |||||||||||||||
Interest
and bank charges
|
330,599 | 32,293 | 27,987 | 60,911 | 41,920 | |||||||||||||||
Foreign
exchange (gain)loss
|
(85,503 | ) | 91,443 | 1,922 | 86,162 | 1,922 | ||||||||||||||
Professional
fees - accounting and legal
|
1,087,790 | 1,923 | 123,360 | 3,472 | 170,057 | |||||||||||||||
Property
search and negotiation
|
225,198 | - | - | - | - | |||||||||||||||
Salaries,
management and consulting fees
|
2,062,332 | 25,578 | 50,087 | 52,324 | 86,093 | |||||||||||||||
|
5,032,158 | 187,623 | 259,998 | 260,382 | 380,543 | |||||||||||||||
Exploration
expenses
|
8,738,021 | 26,581 | 1,247 | 26,581 | 65,705 | |||||||||||||||
Write-off
of mineral property costs
|
172,981 | - | - | - | - | |||||||||||||||
13,943,160 | 214,204 | 261,245 | 286,963 | 446,248 | ||||||||||||||||
Other
income (loss)
|
||||||||||||||||||||
Gain
on disposition of subsidiary
|
216,474 | - | - | - | - | |||||||||||||||
Interest
income
|
22,353 | - | - | - | - | |||||||||||||||
Gain
on sale of rights to the Matupa agreement, net of expenses of
$138,065
|
80,237 | - | - | - | - | |||||||||||||||
Realized
(loss) on investments
|
(37,971 | ) | - | - | - | - | ||||||||||||||
Operating
(loss) of Spun-off operations
|
(316,598 | ) | - | - | - | - | ||||||||||||||
(35,505 | ) | - | - | - | - | |||||||||||||||
Net
(loss) for the period
|
$ | (13,978,665 | ) | $ | (214,204 | ) | $ | (261,245 | ) | $ | (286,963 | ) | $ | (446,248 | ) | |||||
|
||||||||||||||||||||
Earnings
(loss) per share
|
||||||||||||||||||||
-
basic and diluted
|
$ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||||||
Weighted
average number of common
shares outstanding
|
||||||||||||||||||||
-
basic and diluted
|
58,071,855 | 55,218,522 | 58,071,855 | 55,218,522 |
The
accompanying notes are an integral part of these consolidated financial
statements
AURORA
GOLD CORPORATION
|
Cumulative
|
|||||||||||
(An
exploration stage enterprise)
|
October
10
|
Six
months
|
Six
months
|
|||||||||
Interim
Consolidated Statements of Cash Flows (Unaudited)
|
1995
(inception)
|
Ended
|
Ended
|
|||||||||
(Expressed
in U.S. Dollars)
|
to
June 30
|
June
30
|
June
30
|
|||||||||
|
2009
|
2009
|
2008
|
|||||||||
Cash
flows from operating activities
|
||||||||||||
Net
loss for the period
|
$ | (13,978,665 | ) | $ | (286,963 | ) | $ | (446,248 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities
|
||||||||||||
-
depreciation and amortization
|
92,265 | 5,946 | 7,640 | |||||||||
-
stock compensation expense on stock option grants
|
1,174,795 | - | - | |||||||||
-
expenses satisfied with issuance of common stock
|
748,800 | - | - | |||||||||
-
expenses satisfied with transfer of marketable securities
|
33,903 | - | - | |||||||||
-
imputed interest on loan payable - related party
|
1,560 | - | - | |||||||||
-
write-off of mineral property costs
|
172,981 | - | - | |||||||||
-
adjustment for spin-off of Aurora Metals (BVI) Limited
|
316,498 | - | - | |||||||||
-
realized loss on investments
|
37,971 | - | - | |||||||||
-
gain on sale of rights to Matupa agreement, net of
expenses
|
(80,237 | ) | - | - | ||||||||
-
foreign exchange gain related to notes payable
|
(83,660 | ) | 85,575 | - | ||||||||
Changes
in operating assets and liabilities:
|
||||||||||||
-
(increase) in receivables
|
(206,978 | ) | - | - | ||||||||
-
(increase) decrease in prepaid expenses and other assets
|
(27,958 | ) | 12,173 | (984 | ) | |||||||
-
increase in accounts payable and accrued expenses
|
1,344,436 | 155,981 | 203,506 | |||||||||
Net
cash used in operating activities
|
(10,454,289 | ) | (27,288 | ) | (236,086 | ) | ||||||
Cash
flows from investing activities
|
||||||||||||
Purchase
of equipment
|
(187,548 | ) | - | (11,333 | ) | |||||||
Proceeds
on disposal of equipment
|
16,761 | - | - | |||||||||
Proceeds
from disposition of marketable securities
|
32,850 | - | - | |||||||||
Acquisition
of mineral property costs
|
(172,981 | ) | - | - | ||||||||
Payment
for incorporation cost
|
(11,511 | ) | - | - | ||||||||
Net
cash used in investing activities
|
(322,429 | ) | - | (11,333 | ) | |||||||
Cash
flows from financing activities
|
||||||||||||
Proceeds
from common stock less issuance costs
|
8,842,339 | - | - | |||||||||
Loan
proceeds from related party
|
289,000 | - | - | |||||||||
Proceeds
from convertible notes and loans
|
1,469,252 | - | 454,280 | |||||||||
Net
proceeds from (payments on) advances payable -related
party
|
- | - | (160,259 | ) | ||||||||
Net
cash provided by financing activities
|
10,600,591 | - | 294,021 | |||||||||
Effect
of exchange rate changes on cash and cash equivalents
|
176,508 | 11,158 | (37,537 | ) | ||||||||
Increase
(decrease) in cash and cash equivalents
|
381 | (16,130 | ) | 9,065 | ||||||||
Cash,
beginning of period
|
- | 16,511 | 3,909 | |||||||||
Cash,
end of period
|
$ | 381 | $ | 381 | $ | 12,974 |
The
accompanying notes are an integral part of these consolidated financial
statements
Notes to Interim Consolidated Financial Statements (Unaudited)
1.
|
Nature
of Business and Going Concern
|
Aurora
Gold Corporation ("the Company") was formed on October 10, 1995 under the laws
of the State of Delaware and is in the business of location, acquisition,
exploration and, if warranted, development of mineral properties. The
Company’s focus is on the exploration and development of its exploration
properties located in the Tapajos Gold Province, State of Pará, Brazil. The
Company has not yet determined whether its properties contain mineral reserves
that may be economically recoverable and has not generated any operating
revenues to date.
These
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles applicable to a going concern which
contemplates the realization of assets and the satisfaction of liabilities and
commitments in the normal course of business. The general business strategy of
the Company is to acquire mineral properties either directly or through the
acquisition of operating entities. The Company has incurred recurring operating
losses since inception, has not generated any operating revenues to date and
used cash of $27,288 from operating activities in 2009 through June 30. The
Company faces all the risks common to companies in similar stages of
development, including under capitalization and uncertainty of funding sources,
high initial expenditure levels, uncertain revenue streams and difficulties in
managing growth. The Company requires additional funds to meet its obligations
and maintain its operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern. Management's plans in this
regard are to raise equity financing through private or public equity investment
in order to support existing operations and expand its business. There is no
assurance that such additional funds will be available to the Company when
required or on terms acceptable to the Company. These consolidated financial
statements do not include any adjustments that might result from this
uncertainty.
2.
|
Significant
Accounting Policies
|
|
(a)
|
Principles
of Accounting
|
The
interim period consolidated financial statements have been prepared by the
Company pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission (the "SEC") and include the accounts of the Company and its
wholly-owned subsidiary, Aurora Gold Mineração Ltda ("Aurora Gold Mineracao").
Collectively, they are referred to herein as "the Company". Significant
inter-company accounts and transactions have been eliminated. Aurora Gold
Mineração was incorporated on October 27, 2005. Certain information and footnote
disclosures normally included in consolidated financial statements prepared in
accordance with accounting principles generally accepted in the United States
have been condensed or omitted pursuant to such SEC rules and regulations. The
interim period consolidated financial statements should be read together with
the audited consolidated financial statements and accompanying notes included in
the Company's audited consolidated financial statements for the year ended
December 31, 2008. In the opinion of management of the Company, the unaudited
consolidated financial statements contained herein contain all adjustments
(consisting of a normal recurring nature) necessary to present a fair statement
of the results of the interim periods presented.
|
(b)
|
Accounting
Estimates
|
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates and assumptions.
2.
|
Significant
Accounting Policies (cont’d)
|
|
(c)
|
Comprehensive
income
|
The
Company has adopted the Statement of Financial Accounting Standards No. 130
(SFAS 130), Reporting
Comprehensive Income, which establishes standards for reporting and
display of comprehensive income, its components and accumulated balances.
Comprehensive income comprises all changes to equity except those resulting from
investments by owners and distributions to owners.
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
Components
of comprehensive income (loss)
|
June
30
2009
|
June
30
2008
|
June
30
2009
|
June
30
2008
|
||||||||||||
$ | $ | $ | $ | |||||||||||||
Net
(loss) for the period
|
(214,204 | ) | (261,245 | ) | (286,963 | ) | (446,248 | ) | ||||||||
Foreign
currency translation adjustments
|
(26,886 | ) | (29,336 | ) | (31,286 | ) | (37,537 | ) | ||||||||
Total
comprehensive (loss)
|
(241,090 | ) | (290,581 | ) | (318,249 | ) | (483,785 | ) |
Accumulated
other comprehensive income consists entirely of foreign currency translation
adjustments at June 30, 2009 and December 31, 2008.
|
(d)
|
Earnings (Loss) Per
Share
|
Earnings
(loss) per share is computed by dividing net income or loss available to common
stockholders by the weighted average number of common shares outstanding during
the year. Diluted loss per share takes into consideration common
shares outstanding (computed under basic earnings per share) and potentially
dilutive securities and is equivalent to basic loss per share for 2009 and 2008
because potentially dilutive securities were anti-dilutive due to the net losses
incurred in each year. Potentially dilutive securities outstanding consist of
2,300,000 stock options in 2009 and 2008 and the convertible notes payable
(convertible into 2,012,000 common shares at June 30, 2009) in 2009 and
2008.
|
(e)
|
Fair
Value of Financial Instruments
|
Fair
value estimates of financial instruments are made at a specific point in time,
based on relevant information about financial markets and specific financial
instruments. As these estimates are subjective in nature, involving
uncertainties and matters of significant judgment, they cannot be determined
with precision. Changes in assumptions can significantly affect
estimated fair value.
The
carrying value of cash, accounts payable and accrued expenses, accounts payable
and accrued expenses – related parties and loans payable approximate their fair
value because of the short-term nature of these instruments. The carrying value
of the convertible notes payable approximate their fair value because interest
rates of long-term convertible notes payable approximate market interest rates.
.
3.
|
Joint
Venture with Samba Minerals Limited
|
In May
2008 the Company signed an agreement with Samba Minerals Limited (“Samba”),
which was subsequently amended in August 2008, whereby Samba can earn up to an
80% participating interest in the São João and/or the Commandante Araras
projects by funding exploration expenditures on each of the projects to
completion of a feasibility study on each property. The properties are located
in the Municipality of Itaituba, State of Pará, Brazil. Upon completion of a
feasibility study on either property, the Company will immediately transfer an
80% participation interest in the relevant property to Samba and enter into a
formal joint venture agreement to govern
3.
|
Joint
Venture with Samba Minerals Limited
(continued)
|
the
development and production of minerals from the property. Samba can terminate
its participation in either of the projects by providing the Company 30 days
notice in writing. Upon withdrawal from its participation in either property,
Samba would forfeit to the Company all of its rights in relation to the projects
and would be free of any and all payment commitments yet to be due. Samba will
be the manager of the São João and the Commandante Araras projects. The Company
has also granted Samba a right of first refusal to acquire an interest in, or
enter into a joint venture or farm-in agreement on the Company’s São Domingos
and Bigode (since dropped) projects. The term of the first right of refusal
expires on August 1, 2010. Feasibility studies have not been completed as of
June 30, 2009 and thus no joint venture has been formed as of that
date.
4.
|
Equipment
|
June
30, 2009
|
December
31, 2008
|
|||||||
Vehicles
|
$ | 77,583 | $ | 64,265 | ||||
Office
equipment
|
59,608 | 52,459 | ||||||
Furniture
and fixtures
|
19,005 | 15,742 | ||||||
156,196 | 132,466 | |||||||
Accumulated
depreciation
|
(55,463 | ) | (43,493 | ) | ||||
$ | 100,733 | $ | 88,973 |
The
majority of equipment held at June 30, 2009 and December 31, 2008 is located in
Brazil.
5.
|
Notes
and Loans Payable
|
The
Company has two notes payable totaling $603,600 ($750,000 Australian dollars) at
June 30, 2009, that are repayable within 24 months from the date of agreement,
July 18, 2008; bear interest at 10% per annum due upon repayment of the
principal amount; are secured by the Company’s Sao Domingos Project, and may be
converted at the option of the lender at any time prior to repayment into fully
paid common shares of the Company at a deemed issue price of $0.30 per Company
share.
The
Company has two separate loans payable of $250,000 each at June 30, 2009 and
December 31, 2008, that bear interest at 6% per annum, are due on demand and are
unsecured.
6.
|
Stock
Options
|
In 2007,
the Company's Board of Directors approved the 2007 Stock Option Plan (“the
Plan”) to offer an incentive to obtain services of key employees, directors and
consultants of the Company. The Plan provides for the reservation for
awards of an aggregate of 10% of the total shares of Common Stock outstanding
from time to time.
No Plan
participant may receive stock options exercisable for more than 2,500,000 shares
of Common Stock in any one calendar year. Under the Plan, the
exercise price of an incentive stock option must be at least equal to 100% of
the fair market value of the common stock on the date of grant (110% of fair
market value in the case of options granted to employees who hold more than 10%
of the Company's capital stock on the date of grant). The term of
stock options granted under the Plan is not to exceed ten years and the stock
options vest immediately upon granting.
The
following is a summary of stock option activity for the six months ended June
30, 2009 and the status of stock options outstanding and exercisable at June 30,
2009:
Shares
|
Exercise
price
|
Remaining
Contractual Life (yrs)
|
||||||||||
Outstanding
and exercisable at December 31, 2008
|
2,300,000 | $ | 0.26 | 3.6 | ||||||||
Granted
|
- | - | - | |||||||||
Outstanding
and exercisable at June 30, 2009
|
2,300,000 | $ | 0.26 | 3.10 |
6.
|
Stock
Options (continued)
|
The
aggregate intrinsic value of the options outstanding represents the total pretax
intrinsic value for all “in-the-money” options (i.e., the difference between the
Company’s closing stock price on the last trading day of the quarter
ended June 30, 2009 and the exercise price, multiplied by the number
of shares) that would have been received by the option holders had all option
holders exercised their options on June 30, 2009. As the exercise price of all
outstanding options at June 30, 2009 is in excess of the Company’s closing stock
price at that date, there is no intrinsic value.
7.
|
Related
Party Transactions
|
Related
party transactions not disclosed elsewhere in these consolidated financial
statements include:
|
a.
|
During
the three month period ended June 30, 2009, consulting fees of $21,072
(2008 – $105,617) were incurred by the Company to directors of the Company
and its subsidiary. There are no management or consulting agreements with
the directors and the transactions were recorded at the exchange amount,
being the value established and agreed to by the related
parties.
|
|
b.
|
Included
in accounts payable and accrued expenses - related parties at June 30,
2009 is $52,181 (December 31, 2008 - $0) payable to directors of the
Company and its subsidiary for consulting fees and various expenses
incurred on behalf of the Company.
|
8.
|
Non-Cash
Investing and Financing Activities
|
In July
2008 the Company issued 250,000 shares of common stock of the Company valued at
$25,000 to a director of the Company’s subsidiary as consideration for arranging
property acquisitions in the Tapajos Gold Province, State of Pará,
Brazil.
9.
|
Subsequent
Events through January 27, 2010 (the date these financial statements were
issued)
|
|
a.
|
In
September 2009, convertible notes payable and related accrued interest
aggregating US $739,152 (AUD $850,479) were settled through the issuance
of 5,000,000 shares of common stock of the Company. A loss of $1,014,465
has been recorded in September 2009 related to this
settlement.
|
|
b.
|
During
the month of September 2009, the Company raised $300,000 through a private
placement of 3,000,000 shares at a price of $0.10 per share. The shares
have not yet been issued. The Company’s agent will be paid a commission of
420,000 shares of common stock of the Company. Proceeds from the private
placement will be used for general working
capital.
|
|
c.
|
In
November 2009, the Company signed a letter agreement with Global Minerals
Limited to acquire an initial 70% interest in the Front Range Gold Project
located in Boulder County, Colorado. The Company paid $100,000 on signing
the letter agreement. A further $400,000 is due on signing of the formal
agreement on or before February 28,
2010.
|
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations
(A)
General
This
portion of the Quarterly Report provides management's discussion and analysis of
the financial condition and results of operations to enable a reader to assess
material changes in financial condition and results of operations as at and for
three and six month periods ended June 30, 2009, in comparison to the
corresponding prior-year periods. This MD&A is intended to supplement and
complement the unaudited interim consolidated financial statements and notes
thereto, prepared in accordance with US GAAP, for the three and six month
periods ended June 30, 2009 and 2008 (collectively, the "Financial Statements"),
which are included in this Quarterly Report. The reader is encouraged to review
the Financial Statements in conjunction with your review of this MD&A. This
MD&A should be read in conjunction with both the annual audited consolidated
financial statements for the year ended December
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations (continued)
(A)
General
(continued)
31, 2008
and the related annual MD&A included in the December 31, 2008 Form 10-KSB on
file with the US Securities and Exchange Commission. Certain notes to the
Financial Statements are specifically referred to in this MD&A and such
notes are incorporated by reference herein. All dollar amounts in this MD&A
are in US dollars, unless otherwise specified.
For the
purposes of preparing this MD&A, we consider the materiality of information.
Information is considered material if: (i) such information results in, or would
reasonably be expected to result in, a significant change in the market price or
value of Aurora Gold Corporation's shares; or (ii) there is a substantial
likelihood that a reasonable investor would consider it important in making an
investment decision or if it would significantly alter the total mix of
information available to investors. Materiality is evaluated by reference to all
relevant circumstances, including potential market sensitivity.
This
document contains numerous forward-looking statements relating to our
business. The United States Private Securities Litigation Reform Act
of 1995 provides a “safe harbor” for certain forward-looking
statements. Operating, exploration and financial data, and other
statements in this document are based on information we believe reasonable, but
involve significant uncertainties as to future gold and silver prices, costs,
ore grades, estimation of gold and silver reserves, mining and processing
conditions, changes that could result from our future acquisition of new mining
properties or businesses, the risks and hazards inherent in the mining
business (including environmental hazards, industrial accidents,
weather or geologically related conditions), regulatory and
permitting matters, and risks inherent in the ownership and operation
of, or investment in, mining properties or businesses in foreign countries.
Actual results and timetables could vary significantly from the estimates
presented. Readers are cautioned not to put undue reliance on forward-looking
statements. We disclaim any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise.
(B)
Significant
developments during the three months ended June 30, 2009 and Subsequent Events
to January 27, 2010
We are a
mineral exploration company engaged in the exploration of base, precious metals
and industrial minerals worldwide. We were incorporated under the
laws of the State of Delaware on October 10, 1995, under the name "Chefs
Acquisition Corp."
We have
no revenues, have sustained losses since inception, have been issued a going
concern opinion by our auditors and rely upon the sale of our securities to fund
operations. We will not generate revenues even if any of our exploration
programs indicate that a mineral deposit may exist on our properties.
Accordingly, we will be dependent on future financings in order to maintain our
operations and continue our exploration activities. Funds raised in fiscal 2008
and 2009 were used for exploration of our properties and general
administration.
During
2009 we have been evaluating our property holdings in order to determine whether
to implement exploration programs on our existing properties or to acquire
interests in new properties.
In
September 2009, convertible notes payable and related accrued interest
aggregating US $739,152 (AUD $850,479) were settled through the issuance of
5,000,000 shares of common stock of the Company. A loss of $1,014,465 has been
recorded in September 2009 related to this settlement.
During
the month of September 2009, the Company raised $300,000 through a private
placement of 3,000,000 shares at a price of $0.10 per share. The shares have not
yet been issued. The Company’s agent will be paid a commission of 420,000 shares
of common stock of the Company. Proceeds from the private placement will be used
for general working capital.
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations (continued)
(B)
Significant
developments during the three months ended June 30, 2009 and Subsequent Events
to January 25, 2010
In
November 2009, the Company signed a letter agreement with Global Minerals
Limited to acquire an initial 70% interest in the Front Range Gold Project
located in Boulder County, Colorado. The Company paid $100,000 on signing the
letter agreement. A further $400,000 is due on signing of the formal agreement
on or before February 28, 2010.
(C)
Exploration
and Development
We
conduct exploration activities from our principal and technical office located
at Baarerstrasse 10, 1st
Floor, Zug, 6300 Switzerland. We believe that these offices are adequate for our
purposes.
Our strategy is to concentrate our efforts on: (i) existing operations where an infrastructure already exists; (ii) properties presently being developed and/or in advanced stages of exploration which have potential for additional discoveries; and (iii) grass-roots exploration opportunities.
We are
currently concentrating our property exploration activities in Brazil and
Canada. We are also examining data relating to the potential acquisition of
other exploration properties in the United States, Latin America and South
America.
Our
properties are in the exploration stage only and are without a known body of
mineral reserves. Development of the properties will follow only if satisfactory
exploration results are obtained. Mineral exploration and development involves a
high degree of risk and few properties that are explored are ultimately
developed into producing mines. There is no assurance that our
mineral exploration and development activities will result in any discoveries of
commercially viable bodies of mineralization. The long-term profitability of our
operations will be, in part, directly related to the cost and success of our
exploration programs, which may be affected by a number of factors.
For the
six month period ended June 30, 2009, we recorded exploration expenses of
$26,581 compared to $65,705 for the same period in 2008. The following is a
breakdown of the exploration expenses by property: Brazil $26,581 (2008 -
$63,155) and Canada, Kumealon property $0 (2008 - $2,550).
We
initially had 10 properties under Memorandum of Understanding (“MOU”) or under option of which we
currently have retained three (3) properties, São Domingos, São João and
Comandante Araras in the Tapajos Gold Province, State of Pará,
Brazil.
Between
December 21, 2005 and May 26, 2006 we signed four MOUs covering the
Piranhas(option since relinquished) , Branca de Neve (agreement
cancelled), Bigode (option since relinquished) and Santa Lúcia (agreement
cancelled) properties in the Municipality of Itaituba, Tapajos gold province,
State of Para, Brazil. During the first quarter of 2007 we signed a MOU covering
the Comandante Araras property. The MOUs provide us with a review period,
ranging from two months to six months, to access the mineral potential of the
properties.
Between
January 1 and March 31, 2006 we signed five option agreements covering the Novo
Porto (since cancelled due to governmental land use management changes), Ouro
Mil (option since relinquished), Santa Isabel (option since relinquished), São
Domingos and São João and Comandante Araras mineral exploration licenses located
in the Municipality of Itaituba, in the Tapajos gold province of the State of
Para, Brazil.
Access to
all of the property areas in which we have an interest is by airstrips, rivers
in season and the Trans Garimpeiro Highway. Regional infrastructure
to the property areas is serviced from our offices in the city of Itaituba and
the field office located at the Sao Domingos property.
Tapajos
Basin –project areas
Figure 2. Brazil property maps
on geology
Brazil
property maps on geology (produced from the Projeto Especial
Provincia Mineral Do Tapajos Carta Geologica , CRPM Servico Geologice do Brazil
2000)
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations (continued)
(C)
Exploration
and Development (continued)
São
Domingos
The São
Domingos property covers an area of 6.100 hectares and is located approximately
250km south of the regional center of Itaituba and approximately 40 km north of
our previous Santa Isabel property.
São
João
The São
João property area is located approximately 20km west of our São Domingos
property and covers an area of approximately 5.160 hectares.
Bigode
(dropped in 2008)
The 4.150
hectare Bigode property adjoins the southeast portion of the São Domingos
property, and is approximately 30 km north of our Santa Isabel
property. The Company has decided to return this project back to the
vendors during November of 2008.
Comandante
Araras
The 2.750
hectare Comandante Araras property is located 10 km west of the São João
property.
British
Columbia, Canada
The 741
acre Kumealon limestone project is located on the north shore of Kumealon Inlet,
54 kilometres south-southeast of Prince Rupert, British Columbia,
Canada.
(D)
Results
of Operations
Three and
Six Months Ended June 30, 2009 versus Three and Six Months Ended June 30,
2008
The
Company has yet to generate any revenues or establish any history of profitable
operations. For the three and six months ended June 30, 2009 we recorded a net
loss of $214,204 (2008 net loss - $261,245) and $286,963 (2008 net loss -
$446,248) or $(0.00) [2008 – $(0.00)] and $(0.00) [2008 - $(0.01)] per
share.
Expenses
– Our general and administrative expenses consist primarily of personnel costs,
legal costs, investor relations costs, stock based compensation costs,
accounting costs and other professional and administrative costs. For the three
and six months ended June 30, 2009 we recorded expenses of $187,623 (2008 -
$259,998) and $260,382 (2008 - $380,543) respectively. This amount includes,
professional fees - accounting $10 (2008 - $9,573) and $184 (2008 - $43,282)
respectively and legal $1,913 (2008 - $113,787) and $3,288 (2008 - $126,775)
respectively.
Exploration
expenditures – Exploration expenses are charged to operations as they are
incurred. For the three and six months ended June 30, 2009 we recorded
exploration expenses of $26,581 (2008 - $1,247) and $26,581 (2008 - $65,705).
The following is a breakdown of the exploration expenses by property: Brazil
$26,581 (2008 – Cr $1,303) and $26,581 (2008 - $63,155) respectively and Canada,
Kumealon property $0 (2008 - $2,550) and $0 (2008 - $2,550) respectively.
Exploration expenditures for our Brazil properties are down in comparison with
the same period in the previous year while we evaluate the data from the 2008
work programs.
Depreciation
expense – Depreciation expenses charged to operations for the three and six
months ended June 30, 2009 were $3,134 (2008 - $3,914) and $5,946 (2008 -
$7,640) respectively.
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations (continued)
(E)
Capital
Resources and Liquidity
June 30,
2009 versus December 31, 2008
At June
30, 2009, we had cash of $381 (December 31, 2008 - $16,511) and a working
capital deficiency of $1,308,605 (December 31, 2008 - $1,092,000). Total
liabilities as of June 30, 2009 were $2,000,673 as compared to $1,691,579 on
December 31, 2008, an increase of $309,094.
During
the six months ended June 30, 2008, the Company received loans totaling $454,280
($500,000 Australian dollars), that are repayable within 24 months from the date
of the agreement, July 18, 2008; bear interest at 10% per annum due upon
repayment of the principal amount; are secured by the Company’s Sao Domingos
Project, and may be converted at the option of the lender at any time prior to
repayment into fully paid common shares of the Company at a deemed issue price
of $0.30 per Company share.
Our
general business strategy is to acquire mineral properties either directly or
through the acquisition of operating entities. Our consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles in the United States of America and applicable to a going concern
which contemplates the realization of assets and the satisfaction of liabilities
and commitments in the normal course of business. As discussed in note 1 to the
consolidated financial statements, the Company has incurred recurring operating
losses since inception, has not generated any operating revenues to date and
used cash of $27,288 from operating activities in 2009 through June 30. The
Company requires additional funds to meet its obligations and maintain its
operations. We do not have sufficient working capital to (i) pay our
administrative and general operating expenses through December 31, 2009 and (ii)
to conduct our preliminary exploration programs. Without cash flow from
operations, we may need to obtain additional funds (presumably through equity
offerings and/or debt borrowing) in order, if warranted, to implement additional
exploration programs on our properties. While we may attempt to generate
additional working capital through the operation, development, sale or possible
joint venture development of its properties, there is no assurance that any such
activity will generate funds that will be available for
operations. Failure to obtain such additional financing may result in
a reduction of our interest in certain properties or an actual foreclosure of
its interest. We have no agreements or understandings with any person as to such
additional financing.
Our
exploration properties have not commenced commercial production and we have no
history of earnings or cash flow from its operations. While we may attempt to
generate additional working capital through the operation, development, sale or
possible joint venture development of its property, there is no assurance that
any such activity will generate funds that will be available for
operations.
(F)
Plans
for Year 2009 and 2010
During
the next 12 months we intend to raise additional funds through equity offerings
and/or debt borrowing to meet our administrative/general operating expenses and
to conduct work on our exploration properties. There is, of course, no assurance
that we will be able to do so.
Our
exploration properties have not commenced commercial production and we have no
history of earnings or cash flow from its operations. While we may attempt to
generate additional working capital through the operation, development, sale or
possible joint venture development of its property, there is no assurance that
any such activity will generate funds that will be available for
operations.
We intend
to raise additional funds through equity offerings and/or debt borrowing to meet
our administrative/general operating expenses and to conduct work on our
exploration property. There is, of course, no assurance that we will be able to
do so.
We will
concentrate our exploration activities on the Brazilian Tapajos properties and
examine data relating to the potential acquisition or joint venturing of
additional mineral properties in either the exploration or development stage
in
Brazil, United States, Canada and other South American countries. Additional
employees will be hired on a consulting basis as required by the exploration
properties.
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations
(continued)
(F)
Plans
for Year 2009 and 2010 (continued)
Our
exploration work program in 2009 on the Brazilian Tapajos properties will entail
surface mapping of geology, sampling of soils on a grid basis to delineate
geochemical anomalies, stream sediment sampling, geophysical surveying and
drilling.
We have
set up a field operations center at the São Domingos property and intend to
continue to focus our exploration activities on anomalies associated with the
São Domingos Property. We selected the São Domingos property based on
its proximity to our other properties, and the logistics currently in
place. Access to São Domingos property is by light aircraft to a
well-maintained strip, by road along the government maintained Trans Garimpeiro
highway, and by boat along the multitude of waterways in the Amazon
Basin.
We will
continue to conduct exploration programs on our properties adjacent to the Sao
Domingos property using the road and river access to the properties from the Sao
Domingos field operations centre. Exploration on the São Domingos property will
involve further mapping of the outcrop geology and soils from shafts of previous
workers in order to confirm lithologies and structural trends noted from
drilling and on government maps. Currently, four anomalous areas on
the Sao Domingos property have been identified from soil and rock chip sampling,
at Atacadao, Esmeril, Fofoca and Cachoeira, and are currently scheduled for
further investigation.
In late
May, 2006 we continued the exploration of the Sao Domingos property with the
initiation of a projected 5,000 metre diamond-drilling
program. Drilling targeted various soil anomalies and lithogical
trends outlined by mapping and sampling of out cropping
rocks. Drilling tested areas around the Atacadau gold occurrence, the
Esmeril occurrence and Fofoaca area. These areas have been the focus
of both alluvial and relatively shallow underground hard rock (oxidized)
mining. The lithology is porphyritic Pararui granite containing
stockwork quartz veins. Limited historical underground production was carried
out via shafts sunk in the oxidized material peripheral to the dominant quartz
veins. No dewatering was utilized and generally mining ceased, as
water became a problem. Drilling completed during 2006 resulted in a volume of
mineralized material which was calculated on the first 17 drill holes targeting
high grade gold in quartz veins and altered host rocks. Drill hole line spacing
of 40m was used in the initial appraisal. The initial calculation
resulted in a volume of mineralized material containing approximately 60,000
ounces of gold at 2.4 g/t.
After
reviewing the geology and grade continuity from previous drilling on the
Mineralized material at the Sao Domingos-Molly project, the Company initiated
drilling during July 2007 to test target extensions of the current mineralized
material as well as to infill current drilling to increase the confidence
levels.
Currently
the mineralized material still remains open along strike in both directions and
at depth. Aurora will continue to evaluate the potential, and is confident that
Molly could evolve along strike and link up with other noted targets further
along strike. A geophysical survey was conducted during the third quarter of
2007 to test the strike continuity of the Molly mineralized
structure. The results demonstrated that geophysical anomalism,
similar to that recognised over the known mineralisation of the Molly resource,
was noted and continues further west to join up with the known mineralisation of
the Cacheira area. The results also show that this mineralisation may
split into other loads of mineralisation of similar proportions to that known
over the current resource. This has the potential to increase the
known resource by at least 50%.
Exploration
on the Sao Joao, and the adjoining Comandante Araras properties during early
2007 included trenching and mapping. Sample results of a trench on
the main vein resulted in 80m at 30.94 g/t gold. Recent sampling and mapping has
shown this vein system to be extensive and a series of other veins have been
located and sampled.
Item
2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations
(continued)
(F) Plans
for Year 2009 and 2010 (continued)
Together
with our joint venture partner, Samba, we completed a ground geophysics program
on the Sao Joao property. The program targeted areas of known mineralisation and
covered the area along to the north east to link up with other known
mineralisation. Results to date show that the area has a geophysical
trend continuing on from the known mineralisation. During the
geophysics program, other veins were noted and sampled and returned anomalous
gold grades. Together with Samba, we intend to evaluate the
geophysics and determine various targets to test the sub surface extent of the
known mineralisation, and to test the geophysical anomalies within the
area.
Our focus
now will be to explore other areas on the Sao Domingo property. A
recent discovery was made on the Atatcadau area and has been called
Colibri. Here artisanal miners uncovered an area of stock work
mineralisation which was subsequently sampled and returned some high grade
assays. Further sampling of material that was exposed by artisanal
activity around the Colibri occurrence was conducted. Whilst
monitoring the artisanal activity mapping and measurements of the structures and
orientations of theoretical mineralisation channels was
conducted. The results showed that there are possible correlations to
the Atacadau mineralisation noted from previous mapping and
drilling. We intend to cut trenches across the strike of the
mineralizing structures to better understand the size both laterally and along
strike. We will then test the strike extent with geophysics in a
similar manner as that conducted on the Sao Joao property.
We have
decided not to pursue the Bigode project and have returned this back to the
vendors.
We are
not planning to do any exploration work on the British Columbia Kumealon
limestone property in 2009.
(G)
Application
of Critical Accounting Policies
The
accounting policies and methods we utilize in the preparation of our
consolidated financial statements determine how we report our financial
condition and results of operations and may require our management to make
estimates or rely on assumptions about matters that are inherently uncertain.
Our accounting policies are described in note 2 to our December 31, 2008
consolidated financial statements. Our accounting policies relating to mineral property and exploration
costs and depreciation and amortization of property, plant and equipment
are critical accounting policies that are subject to estimates and assumptions
regarding future activities.
Depreciation
is based on the estimated useful lives of the assets and is computed using the
straight-line method. Equipment is recorded at
cost. Depreciation is provided over the following useful lives:
vehicles 10 years and office equipment, furniture and fixtures 2 to 10
years.
Exploration
costs are charged to operations as incurred until such time that proven reserves
are discovered. From that time forward, the Company will capitalize all costs to
the extent that future cash flow from mineral reserves equals or exceeds the
costs deferred. The deferred costs will be amortized over the recoverable
reserves when a property reaches commercial production. As at June 30, 2009 and
December 31, 2008, the Company did not have proven reserves.
Exploration
activities conducted jointly with others are reflected at the Company's
proportionate interest in such activities.
Costs related to site restoration programs are accrued
over the life of the project.
US GAAP
requires us to consider at the end of each accounting period whether or not
there has been an impairment of the capitalized property, plant and equipment.
This assessment is based on whether factors that may indicate the need for a
write-down are present. If we determine there has been an impairment, then we
would be required to write-down the recorded value of its property, plant and
equipment costs which would reduce our earnings and net assets.
Item
2. Management’s Discussion and Analysis of Financial
Condition and Results of Operations (continued)
(H)
Off-balance
Sheet Arrangements and Contractual Obligations
We do not
have any off-balance sheet arrangements or contractual obligations that are
likely to have or are reasonably likely to have a material current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that have not been disclosed in our financial statements.
Item
3. Qualitative
and Quantitative Disclosures About Market
Risk
Our
exposure to market risk is confined to our cash equivalents and short-term
investments. We invest in high-quality financial instruments; primarily money
market funds, federal agency notes, and US Treasury obligations, with the
effective duration of the portfolio within one year which we believe are subject
to limited credit risk. We currently do not hedge interest rate exposure. Due to
the short-term nature of our investments, we do not believe that we have any
material exposure to interest rate risk arising from our
investments.
Item
4T. Controls and Procedures
Attached
as exhibits to this Interim Report on Form 10-Q are certifications of
our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), which
are required pursuant to Rule 13a-14 of the Exchange Act. This “Controls and
Procedures” section of this Interim Report on Form 10-Q includes information
concerning the controls and controls evaluation referenced in the
certifications. This section of the Interim Report on Form 10-Q should be read
in conjunction with the certifications for a more complete understanding of the
matters presented.
Evaluation
of disclosure controls and procedures
We
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of June 30, 2009. Disclosure controls and procedures
are designed to ensure that information required to be disclosed in our reports
filed under the Exchange Act, is recorded, processed, summarized and reported
within the time periods specified by the SEC. Disclosure controls are also
designed to ensure that such information is accumulated and communicated to our
management, including the CEO and CFO, as appropriate, to allow timely decisions
regarding required disclosure.
Based on
the evaluation, our Chief Executive Officer and Chief Financial
Officer, after evaluating the effectiveness of our “disclosure controls and
procedures” (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), have
concluded that, subject to the inherent limitations noted below, as of June 30,
2009, our disclosure controls and procedures were not effective due to the
existence of several material weaknesses in our internal control over financial
reporting, as discussed below.
Limitations
on Effectiveness of Controls
Our
management, including our Chief Executive Officer and Chief
Financial Officer, does not expect that our disclosure controls or our
internal control over financial reporting will prevent all errors and all fraud.
A control system, no matter how well conceived and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system
are met. Further, the design of a control system must reflect the fact that
there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control
systems, no evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of a simple
error or mistake. Additional controls can be circumvented by the individual acts
of some persons, by collusion of two or more people, or by management override
of the controls. The design of any system of controls also is based in part upon
certain assumptions about the likelihood of future events, and there can be no
assurance that any design will succeed in achieving its stated goals under all
potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system,
misstatements due to error or fraud may occur and not be
detected.
Material
Weaknesses Identified
In
connection with the preparation of our consolidated financial statements for the
period ended December 31, 2008, certain significant deficiencies in internal
control became evident to management that represent material weaknesses,
including,
(i)
|
Lack
of a sufficient number of independent directors for our board and audit
committee. We currently only have one independent director on our
board, which is comprised of 2 directors, and on our audit committee,
which is comprised of 2 directors. As a publicly-traded company, we should
strive to have a majority of our board of directors be
independent.
|
(ii)
|
Lack
of an independent financial expert on our audit committee. We
currently do not have an independent audit committee financial expert on
our audit committee as defined by the SEC. Pursuant to Section
407, we are required to disclose whether we have at least one "audit
committee financial expert" on our audit committee in addition to whether
the expert is independent of management. Since we do not have an
independent audit committee financial expert, we have disclosed this fact;
however, it is still the expectation that we obtain a financial expert on
our audit committee.
|
(iii)
|
Insufficient
segregation of duties in our finance and accounting functions due to
limited personnel. During the period ended June 30, 2009, we had one
person on staff at our executive office and two persons at our Brazil
office that performed nearly all aspects of our financial reporting
process, including, but not limited to, access to the underlying
accounting records and systems, the ability to post and record journal
entries and responsibility for the preparation of the financial
statements. This creates certain incompatible duties and a lack of
review over the financial reporting process that would likely result in a
failure to detect errors in spreadsheets, calculations, or assumptions
used to compile the financial statements and related disclosures as filed
with the SEC. These control deficiencies could result in a material
misstatement to our interim or annual consolidated financial statements
that would not be prevented or
detected.
|
(iv)
|
There
is a lack of sufficient supervision and review by our corporate management
of the accounting functions performed at the Company’s foreign subsidiary
in Brazil.
|
(v)
|
Insufficient
corporate governance policies. Although we have a code of ethics
which provides broad guidelines for corporate governance, our corporate
governance activities and processes are not always formally
documented. Specifically, decisions made by the board to be carried
out by management should be documented and communicated on a timely basis
to reduce the likelihood of any misunderstandings regarding key decisions
affecting our operations and
management.
|
Plan
for Remediation of Material Weaknesses
We intend
to take appropriate and reasonable steps to make the necessary improvements to
remediate these deficiencies. We intend to consider the results of our
remediation efforts and related testing as part of our year-end 2009 assessment
of the effectiveness of our internal control over financial
reporting.
We have
implemented certain remediation measures and are in the process of designing and
implementing additional remediation measures for the material weaknesses. Such
remediation activities include the following:
|
•
|
We
continue to recruit one or more additional independent board members to
join our board of directors. We continue to recruit at least
one additional financial expert to join as an independent board member and
as an audit committee member.
|
|
•
|
We
are initiating a formal monthly reporting and approval process with our
Brazilian operations to ensure timely provision of information effecting
our quarterly and annual consolidated financial
statements.
|
|
•
|
In
addition to the foregoing remediation efforts, we will continue to update
the documentation of our internal control processes, including formal risk
assessment of our financial reporting
processes.
|
Changes
in Internal Controls over Financial Reporting
There
were no significant changes in the Company’s internal control over financial
reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the most recent fiscal quarter that materially affected, or
are reasonably likely to materially affect, our internal control over financing
reporting.
PART
II. OTHER INFORMATION
Item
1. Legal
Proceedings
We are
not party to any litigation, and have no knowledge of any pending or threatened
litigation against us.
Item
1A. Risk
Factors
Not
applicable
Item
2. Unregistered
Sales of Equity Securities and Use of Proceeds
Not
applicable
Item
3. Defaults Upon Senior Securities
Not
Applicable
Item
4. Submission of Matters to a Vote of Security Holders
Not
applicable
Item
5. Other Information
None.
Item
6. Exhibits
3.1.1
|
Certificate
of Incorporation incorporated by reference to the registration statement
on Form 10SB filed on June 4, 1998 (SEC File No. 000-24393 98720970).
*
|
3.1.2
|
Certificate
of Amendment to the Certificate of Incorporation incorporated by reference
to the registration statement on Form 10SB filed on June 4, 1998 (SEC File
No. 000-24393 98720970). *
|
3.1.3
|
Certificate
of Restoration and Renewal of Certificate of Incorporation incorporated by
reference to the registration statement on Form 10SB filed on June 4, 1998
(SEC File No. 000-24393 98720970).
*
|
3.2.1
|
By-laws
incorporated by reference to the registration statement on Form 10SB filed
on June 4, 1998 (SEC File No. 000-24393 98720970).
*
|
3.2.2
|
Amended
and Restated By-laws incorporated by reference to the registration
statement on Form 10SB filed on June 4, 1998 (SEC File No. 000-24393
98720970). *
|
10.1
|
Consulting
Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold
Corporation incorporated by reference to the registration statement on
Form SB filed on December 16, 2005 (SEC File No. 333-130379
051269300). *
|
10.2
|
Confidentiality
Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold
Corporation incorporated by reference to the registration statement on
Form SB filed on December 16, 2005 (SEC File No. 333-130379 051269300).
*
|
10.3
|
Assignment
of Novo Porto and Santa Clara Memorandum of Understanding to Aurora Gold
Corporation incorporated by reference to the registration statement on
Form SB filed on December 16, 2005 (SEC File No. 333-130379
051269300). *
|
10.4
|
Novo
Porto Memorandum of Understanding Corporation incorporated by reference to
the registration statement on Form SB filed on December 16, 2005 (SEC File
No. 333-130379 051269300). *
|
10.5
|
Declaration
of Translator for translation of Porto Novo Memorandum of Understanding
from Portuguese to English Corporation incorporated by reference to the
registration statement on Form SB filed on December 16, 2005 (SEC File No.
333-130379 051269300). *
|
10.6
|
Novo
Porto Option Agreement incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.7
|
Declaration
of Translator for translation of Novo Porto Option Agreement from
Portuguese to English Corporation incorporated by reference to the Form
10-KSB filed on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.8
|
Santa
Clara Memorandum of Understanding incorporated by reference to the
registration statement on Form SB filed on December 16, 2005 (SEC File No.
333-130379 051269300). *
|
10.9
|
Declaration
of Translator for translation of Santa Clara Memorandum of Understanding
from Portuguese to English Corporation incorporated by reference to the
registration statement on Form SB filed on December 16, 2005 (SEC File No.
333-130379 051269300). *
|
10.10
|
Assignment
of Ouro Mil Memorandum of Understanding to Aurora Gold Corporation
incorporated by reference to the registration statement on Form SB filed
on December 16, 2005 (SEC File No. 333-130379 051269300).
*
|
10.11
|
Ouro
Mil Memorandum of Understanding Corporation incorporated by reference to
the registration statement on Form SB filed on December 16, 2005 (SEC File
No. 333-130379 051269300). *
|
10.12
|
Declaration
of Translator for translation of Ouro Mil Memorandum of Understanding from
Portuguese to English Corporation incorporated by reference to the
registration statement on Form SB filed on December 16, 2005 (SEC File No.
333-130379 051269300). *
|
10.13
|
Ouro
Mil Option Agreement incorporated by reference to the Form 10-KSB filed on
March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.14
|
Declaration
of Translator for translation of Ouro Mil Option Agreement from Portuguese
to English incorporated by reference to the Form 10-KSB filed on March 28,
2006 (SEC File No. 000-24393-06715925).
*
|
10.15
|
Assignment
of Sao Domingos Memorandum of Understanding to Aurora Gold Corporation
incorporated by reference to the registration statement on Form SB filed
on December 16, 2005 (SEC File No. 333-130379 051269300).
*
|
10.16
|
Sao
Domingos Memorandum of Understanding Corporation incorporated by reference
to the
registration statement on Form SB filed on December 16, 2005 (SEC File No.
333-30379 051269300). *
|
10.17
|
Declaration
of Translator for translation of Sao Domingos Memorandum
of Understanding from
Portuguese to English incorporated by reference to the registration
statement on Form SB
filed on December 16, 2005 (SEC File No. 333-130379 051269300).
*
|
10.18
|
São
Domingos Option Agreement incorporated by reference to the Form 10-KSB
filed on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.19
|
Declaration
of Translator for translation of São Domingos Option Agreement from
Portuguese to English incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.20
|
Santa
Isabel Option Agreement incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.21
|
Declaration
of Translator for translation of Santa Isabel Option Agreement from
Portuguese to English incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.22
|
São
João Option Agreement incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.23
|
Declaration
of Translator for translation of São João Option Agreement from Portuguese
to English incorporated by reference to the Form 10-KSB filed on March 28,
2006 (SEC File No. 000-24393-06715925).
*
|
10.24
|
Piranhas
Memorandum of Understanding incorporated by reference to the Form 10-KSB
filed on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.25
|
Declaration
of Translator for translation of Piranhas Memorandum of Understanding from
Portuguese to English incorporated by reference to the Form 10-KSB filed
on March 28, 2006 (SEC File No. 000-24393-06715925).
*
|
10.26
|
Branca
de Neve Memorandum of Understanding incorporated by reference to the Form
10-QSB filed on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.27
|
Declaration
of Translator for translation of Branca de Neve Memorandum of
Understanding from Portuguese to English incorporated by reference to the
Form 10-QSB filed on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.28
|
Bigode
Memorandum of Understanding incorporated by reference to the Form 10-QSB
filed on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.29
|
Declaration
of Translator for translation of Bigode Memorandum of Understanding from
Portuguese to English incorporated by reference to the Form 10-QSB filed
on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.30
|
Santa
Lucia Memorandum of Understanding incorporated by reference to the Form
10-QSB filed on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.31
|
Declaration
of Translator for translation of Santa Lucia Memorandum of Understanding
from Portuguese to English incorporated by reference to the Form 10-QSB
filed on July 26, 2006 (SEC File No. 000-24393-06981489).
*
|
10.34
|
Settlement
Agreement dated as of August 9, 2007 between the Company and Luis Mauricio
incorporated by reference to the Form SB-2 filed on November 13, 2007 (SEC
File No. 333-147341 071238655).
*
|
10.35
|
Form
of Subscription Agreement between the Selling Stockholders and the Company
incorporated by reference to the Form SB-2 filed on November 13, 2007 (SEC
File No. 333-147341 071238655).
*
|
10.36
|
Comandante
Araras Memorandum of Understanding incorporated by reference to the Form
10-KSB filed on April 15, 2008 (SEC File No. 000-24393-147341 08758054).
*.
|
10.37
|
2007
Stock Option Plan incorporated by reference to the Form 10-KSB filed on
April 15, 2008 (SEC File No. 000-24393-147341 08758054).
*.
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of
2002.
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of
2002.
|
99.1
|
Corporate
Governance Principles incorporated by reference to the Form 10-KSB filed
on March 25, 2004 (SEC File No.
000-24393-04689262).
|
--------
*
Previously filed
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
Aurora Gold Corporation
|
||||||
Registrant
|
||||||
Date:
|
January 27, 2010
|
BY:
|
/s/ Lars Pearl
|
|||
Lars
Pearl
|
||||||
President,
CEO, CFO and Director
|
||||||
Date:
|
January 27, 2010
|
BY:
|
/s/ Michael Montgomery
|
|||
Michael
Montgomery
|
||||||
Director
|
23