Attached files
file | filename |
---|---|
EX-4.3 - EXHIBIT 4.3 - AURORA GOLD CORP | ex4_3.htm |
EX-4.1 - EXHIBIT 4.1 - AURORA GOLD CORP | ex4_1.htm |
EX-4.2 - EXHIBIT 4.2 - AURORA GOLD CORP | ex4_2.htm |
EX-23.2 - EXHIBIT 23.2 - AURORA GOLD CORP | ex23_2.htm |
As
filed with the Securities and Exchange Commission on February 5,
2010
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Aurora
Gold Corporation
(Exact
name of registrant as specified in its charter)
Delaware
|
1040
|
13-3945947
|
||
(State
or Other Jurisdiction of incorporation or organization
|
(Primary
Standard Industrial Classification Code Number)
|
(IRS
Employer Identification Number)
|
Baarerstrasse
10, 1st
Floor, Zug
6300
Switzerland
Telephone:
(+41) 7887-96966
Facsimile: (+41)
44 274 2818
|
Lars
Pearl
Baarerstrasse
10, 1st
Floor, Zug
6300
Switzerland
Telephone:
(+41) 7887-96966
Facsimile: (+41)
) 44 274 2818
|
|
(Address,
including zip code and telephone number, including area code, of
registrant's principal executive offices)
|
(Address,
including zip code and telephone number, including area code, of agent for
service)
|
Copies of
all communications and notices to:
Joseph
Sierchio, Esq.
Sierchio
& Company, LLP
430
Park Avenue
7th
Floor
New
York, New York 10022
Telephone:
(212) 246-3030
Facsimile:
(212) 246-3039
Approximate date of commencement of
proposed sale to the public: As soon as practicable after this
Registration Statement becomes effective.
--------------------
If
any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933,
as amended, check here: S
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. £
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. £
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. £
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. (Check one):
Large
Accelerated Filer
|
£
|
Accelerated
Filer
|
£
|
Non-accelerated
Filer
|
£ (Do not
check if a smaller reporting company)
|
Smaller
reporting company
|
S
|
Calculation
of Registration Fee
Securities
to be Registered
|
Number
of Shares Registered
|
Proposed
Maximum Offering Price Per Share (1)
|
Proposed
Maximum Offering Price (1)
|
Registration
Fee
|
Common
Stock Par Value $0.001
|
12,451,467
(2)
|
US$0.41
|
$5,105,101
|
$364
|
Total
|
12,451,467
(3)
|
$5,105,101
|
$364
|
(1)
Estimated solely for the purpose of computing the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933; the closing sale price of our
stock on February 1, 2010, as quoted on the Pink Sheets was $0.41. It is not
known how many shares will be purchased under this registration statement or at
what price shares will be purchased.
(2) The
12,451,467 shares
were issued in private placements effected by the Registrant pursuant to
Regulation S as promulgated pursuant to the Securities Act of 1933 (the “Securities Act”) and Section
4(2) of the Securities Act prior to the filing of this registration
statement.
(3) All
of the 12,451,467 shares
being registered are offered by the Selling
Stockholders. Accordingly, this registration statement includes an
indeterminate number of additional shares of common stock issuable for no
additional consideration pursuant to any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt of
consideration, which results in an increase in the number of outstanding shares
of our common stock. In the event of a stock split, stock dividend or similar
transaction involving our common stock, in order to prevent dilution, the number
of shares registered shall be automatically increased to cover the additional
shares in accordance with Rule 416(a) under the Securities Act.
Registrant
hereby amends this registration statement on such date or dates as may be
necessary to delay its effective date until the registrant shall file a further
amendment which specifically states that this registration statement shall
thereafter become effective in accordance with section 8(a) of the Securities
Act, or until the registration statement shall become effective on such date as
the commission, acting under said section 8(a), may determine.
Subject
to Completion, Dated February 5, 2010
The
information in this Prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and we are not soliciting offers to buy
these securities in any state where the offer or sales is not
permitted.
|
Prospectus
Aurora
Gold Corporation
12,451,467 Shares Common
Stock
This
Prospectus (the “Prospectus”) relates to the
resale by certain of our stockholders named in the section of this Prospectus
titled “Selling Stockholders” (the “Selling Stockholders”) of up
to 12,451,467 shares of
our common stock (the “Shares”). The Shares were
purchased by the Selling Stockholders in transactions with us pursuant to
exemptions from the registration requirements of the Securities Act of 1933 as
amended (the “Securities
Act”)
The
Selling Stockholders may sell common stock from time to time in the principal
market on which the stock is traded at the prevailing market price or in
negotiated transactions. The shares may be sold directly or through agents or
broker-dealers acting as agents on behalf of the Selling Stockholders. The
Selling Stockholders may engage brokers, dealers or agents, who may receive
commissions or discounts from the Selling Stockholders. The Selling Stockholders
and any underwriter, broker-dealer or agent that participates in the sale of the
shares or interests therein may be deemed "underwriters" within the meaning of
Section 2(11) of the Securities Act. Any discounts, commissions, concessions,
profit or other compensation any of them earns on any sale or resale of the
shares, directly or indirectly, may be underwriting discounts and commissions
under the Securities Act. The Selling Stockholders who are "underwriters" within
the meaning of Section 2(11) of the Securities Act will be subject to the
Prospectus delivery requirements of the Securities Act.
Our
common stock is presently quoted for trading under the symbol “ARXG.PK” on the
Pink OTC Markets Inc.’s over the counter Pink Sheets market (the “Pink Sheets”). On February 1,
2010 the closing price of the common stock, as reported on the Pink Sheets was
$0.41 per share. The Selling Stockholders have advised us that they will sell
the shares of common stock from time to time in the open market, on the Pink
Sheets, in privately negotiated transactions or a combination of these methods,
at market prices prevailing at the time of sale, at prices related to the
prevailing market prices, at negotiated prices, or otherwise as described under
the section of this Prospectus titled “PLAN OF
DISTRIBUTION.”
The
purchase of the shares offered through this Prospectus involves a high degree of
risk. Please refer to “RISK
FACTORS” beginning on page 6.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this Prospectus. Any representation to the contrary is a criminal
offense.
The Date of This Prospectus Is
_____,
1
TABLE OF CONTENTS
Page
|
|
3
|
|
6
|
|
10
|
|
10
|
|
11
|
|
11
|
|
12
|
|
20
|
|
38
|
|
40
|
|
42
|
|
43
|
|
44
|
|
47
|
|
49
|
|
51
|
|
52
|
|
52
|
|
52
|
|
52
|
|
52
|
|
53
|
|
CONSOLIDATED
FINANCIAL STATEMENTS
|
F-1
TO F-27
|
You
should rely only on the information contained in this Prospectus. We have not
authorized anyone to provide you with different information. We are not making
an offer to sell these securities in any jurisdiction where the offer or sale is
not permitted. You should assume that the information contained in this
Prospectus is accurate as of the date on the front of this Prospectus only. Our
business, financial condition, results of operations and prospects may have
changed since that date.
Information
contained on our web site does not constitute part of this
Prospectus.
We
obtained statistical data and certain other industry forecasts used throughout
this Prospectus from market research, publicly available information and
industry publications. Industry publications generally state that they obtain
their information from sources that they believe to be reliable, but they do not
guarantee the accuracy and completeness of the information. Similarly, while we
believe that the statistical and industry data and forecasts and market research
used herein are reliable, we have not independently verified such data. We have
not sought the consent of the sources to refer to their reports or articles in
this Prospectus.
Prospectus Summary
This
summary contains material information about us and the offering which is
described in detail elsewhere in the Prospectus. Since it may not
include all of the information you may consider important or relevant to your
investment decision, you should read the entire Prospectus carefully, including
the more detailed information regarding our company, the risks of purchasing our
common stock discussed under "Risk Factors" on page 6, and
our financial statements and the accompanying notes.
Unless
the context otherwise requires, the terms “we,” “our,” “us,” the “Company” and
“Aurora Gold” refer to Aurora Gold Corporation, a Delaware corporation, and not
to the Selling Stockholders.
Our
Business
We were
incorporated under the laws of the State of Delaware on October 10, 1995, under
the name "Chefs Acquisition
Corp." Initially formed for the purpose of engaging in the food
preparation business, we redirected our business efforts in late 1995 following
a change of control, which occurred on October 30, 1995, to the acquisition,
exploration and, if warranted, the development of mineral mineralized material
properties. We changed our name to “Aurora Gold Corporation” on
August 20, 1996 to more fully reflect our mineralized material exploration
business activities.
Our
general business strategy is to acquire mineral properties either directly or
through the acquisition of operating entities. Our continued
operations and the recoverability of mineral property costs is dependent upon
the existence of economically recoverable mineral reserves, confirmation of our
interest in the underlying properties, our ability to obtain necessary financing
to complete the development and upon future profitable production.
Since
1996 we have acquired and disposed of a number of properties. We have not
established reserves on any of the properties that we owned or in which we have
or have had an interest.
We
currently have interest in four (4) properties none of which contain any
reserves. Please refer to “Description of Our Business and
Property.” 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. Please refer to “RISK FACTORS.”
Our
principal and technical office, from which we conduct our exploration and
property acquisition activities, is located at Baarerstrasse 10, 1st
Floor, Zug 6300 Switzerland. The telephone number is
(+41) 7887-96966.
Risk
Associated With Our Business
The
search for valuable minerals as a business is extremely risky. We can provide
investors with no assurance that the exploration of any of the properties in
which we have or may acquire an interest will uncover commercially exploitable
mineral reserves. It is likely that such properties will not contain any
reserves and, in all likelihood, any funds spent on exploration will probably be
lost. In addition, problems such as unusual or unexpected geological formations
or other variable conditions are involved in exploration and, often result in
unsuccessful exploration efforts.
In
addition, due to our limited capital and mineralized materials, we are limited
in the amount of exploration work we can do. As a result, our already low
probability of successfully locating mineral reserves will be reduced
significantly further. Therefore, we may not find a commercial mineable ore
deposit prior to exhausting our funds. Furthermore, exploration costs may be
higher than anticipated, in which case, the risk of utilizing all of our funds
prior to locating any ore deposits shall be greatly increased. Factors that
could cause exploration costs to increase are: adverse conditions, difficult
terrain and shortages of qualified personnel. Please refer to “RISK FACTORS.”
The
Offering
Selling
Stockholders
The
12,451,467 shares
being offered hereby were issued to the Selling Stockholders in private
placements for cash and in consideration of debt settlement (collectively, the
“Private Placements”)
pursuant to an exemption from the registration requirements of the Securities
Act afforded by Regulation S as promulgated by the U.S. Securities and Exchange
Commission (the “SEC”). None of the
Selling Stockholders are affiliated with us. Please refer to “SELLING
STOCKHOLDERS.”
Securities
Being Offered
The
Selling Stockholders named in this Prospectus are offering for resale up to
12,451,467 shares
of our common stock to the public by means of this Prospectus. Although we have
agreed to pay the costs and expenses related to the preparation and filing of
the registration statement of which this Prospectus is part, we will receive
none of the proceeds from the sale of the shares by the Selling
Stockholders.
The
Selling Stockholders are offering an aggregate of 12,451,467 shares. These shares
constitute approximately 18.2% of our issued and outstanding common stock. The
Selling Stockholders holders will determine if, when, and how they will sell
the common stock offered in this Prospectus. Please refer to “Plan of
Distribution.” The offering will conclude upon the earlier to occur
of:
|
·
|
The
sale of all of the 12,451,467 shares of common
stock being offered;
|
|
·
|
The
second anniversary date of the effective date of this Prospectus;
or
|
|
·
|
The
earlier termination of the registration statement covering the shares
being offered.
|
Only the
shares of our common stock, issued to the Selling Stockholders in the Private
Placements have been registered by the registration statement of which this
Prospectus is a part. The Selling Stockholders may sell some or all of their
shares immediately after they are registered. Please refer to “PLAN OF
DISTRIBUTION.”
Number
of Shares Outstanding
At
January 31, 2010 we had 68, 408,522 shares issued and outstanding, inclusive of
the shares being offered by the Selling Stockholders. Our common stock is
currently quoted on the Pink Sheets under the symbol “ARXG.” There is only a limited
trading market for our common stock. Please refer to “Risk Factors” and to
“Market for Common Equity and Related Stockholder Matters.”
Selected
Financial Data
The
Company has not generated any operating revenues to date. Since incorporation it
has been inactive as far as mining activities are concerned. The
Company’s plans, funding requirements, sources and alternatives relating thereto
are presented and discussed in “Management’s Discussion and Analysis of
Financial Condition and Results of Operations.”
The
following table sets forth, for the periods and the dates indicated selected
financial data for the Company. This information should be read in
conjunction with the Company's Audited Consolidated Financial Statements and
Notes thereto for the period ended December 31, 2008 and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations”
included elsewhere herein.
The
selected financial data provided below are not necessarily indicative of the
future results of operations or financial performance of the
Company. To date the Company has not paid any dividends on the Common
Shares and it does not expect to pay dividends in the foreseeable
future.
The
Financial Statements of the Company have been prepared in accordance with
accounting principles generally accepted in the United States ("US
GAAP").
FIVE
YEAR COMPARATIVE SUMMARY OF SELECTED FINANCIAL DATA
(expressed
in U.S. dollars)
|
||||||||||||||||||||
Period
Type
|
12
Months
|
12
Months
|
12
Months
|
12
Months
|
12
Months
|
|||||||||||||||
Fiscal
Year End
|
Dec
31, 2008
|
Dec
31, 2007
|
Dec
31, 2006
|
Dec
31, 2005
|
Dec
31, 2004
|
|||||||||||||||
Current
Assets
|
$ | 47,066 | $ | 27,165 | $ | 320,670 | $ | 197,640 | $ | 1,475 | ||||||||||
Total
Assets
|
136,039 | 161,708 | 423,471 | 198,319 | 5,412 | |||||||||||||||
Current
Liabilities
|
1,139,066 | 1,414,602 | 1,155,673 | 32,588 | 190,296 | |||||||||||||||
Long
term Liabilities
|
552,513 | - | - | - | - | |||||||||||||||
Common
Stock
|
12,168,850 | 11,987,650 | 9,183,355 | 4,618,355 | 3,805,855 | |||||||||||||||
Other
Equity
|
(13,724,390 | ) | (13,240,544 | ) | (9,915,557 | ) | (4,452,624 | ) | (3,990,739 | ) | ||||||||||
Total
Liabilities and Equity
|
136,039 | 161,708 | 423,471 | 198,319 | 5,412 | |||||||||||||||
Other
Expenses
|
520,105 | 3,259,732 | 5,463,855 | 457,271 | 223,763 | |||||||||||||||
Income
(Loss) Pre-tax
|
(520,105 | ) | (3,259,732 | ) | (5,463,855 | ) | (457,271 | ) | (223,763 | ) | ||||||||||
Net
Income (Loss)
|
(520,105 | ) | (3,259,732 | ) | (5,463,855 | ) | (457,271 | ) | (223,763 | ) | ||||||||||
EPS
Basic
|
(0.01 | ) | (0.07 | ) | (0.13 | ) | (0.02 | ) | (0.01 | ) | ||||||||||
EPS
Diluted
|
(0.01 | ) | (0.07 | ) | (0.13 | ) | (0.02 | ) | (0.01 | ) | ||||||||||
Common
Shares Issued and Outstanding
|
58,071,855 | 55,218,522 | 45,468,522 | 36,218,522 | 19,534,431 |
Risk Factors
You should carefully consider the
risks described below before purchasing any shares. Our most significant risks
and uncertainties are described below; if any of the following risks actually
occur, our business, financial condition, or results of operations could be
materially adversely affected, the trading of our common stock could decline,
and you may lose all or part of your investment therein. You should acquire the
shares only if you can afford to lose your entire investment. Our filings with
the Securities and Exchange Commission also contain forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of
certain factors, including the risks we have described below. Please refer
to “Special Note
Regarding Forward-Looking Statements” on page <> of this
Prospectus.
Risks
Related to Our Business, Property and Industry
We
are an exploration stage company and have incurred substantial losses since
inception.
We have
never earned any revenues. In addition, we have incurred net losses of
$15,211,213 for the period from our inception (October 10, 1995) through
September 30, 2009 and, based upon our current plan of operation, we expect that
we will incur losses for the foreseeable future.
Potential
investors should be aware of the difficulties normally encountered by mineral
exploration companies and the high rate of failure of such companies. We are
subject to all of the risks inherent to an exploration stage business
enterprise, such as limited capital mineralized materials, lack of manpower, and
possible cost overruns associated with our exploration programs. Potential
investors must also weigh the likelihood of success in light of any problems,
complications, and delays that may be encountered with the exploration of our
properties.
Because
we are small and do not have much capital, we must limit our exploration
activity. As such we may not be able to complete an exploration program that is
as thorough as we would like. In that event, an existing ore body may go
undiscovered. Without an ore body, we cannot generate revenues and you will lose
your investment.
Our
independent registered public accounting firm has expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.
Our
independent registered public accounting firm has issued its report, which
includes an explanatory paragraph for going concern uncertainty on our
consolidated financial statements as of and for the year ended December 31,
2008. Because we have not yet generated revenues from our operations our ability
to continue as a going concern is currently heavily dependent upon our ability
to obtain additional financing to sustain our operations. Such financing may
take the form of the issuance of common or preferred stock or debt securities,
or may involve bank financing. Although we have completed several equity
financings, the fact that our auditors have issued a “going concern” opinion may
hinder our ability to obtain additional financing in the future. Currently, we
have no commitments to obtain any additional financing, and there can be no
assurance that financing will be available in amounts or on terms acceptable to
us, if at all.
Because
we do not have any revenues, we expect to incur operating losses for the
foreseeable future.
We have
never generated revenues and we have never been profitable. Prior to completing
exploration on our mineral properties, we anticipate that we will incur
increased operating expenses without realizing any revenues. We therefore expect
to incur significant losses into the foreseeable future. If we are unable to
generate financing to continue the exploration of our properties, we will fail
and you will lose your entire investment in this offering.
None
of the properties in which we have an interest or the right to earn an interest
have any known reserves.
We
currently have an interest or the right to earn an interest in five (5)
properties, none of which have any reserves. Based on our exploration
activities through the date of this Prospectus, we do not have sufficient
information upon which to assess the ultimate success of our exploration
efforts. If we do not establish reserves we may be required to
curtail or suspend our operations, in which case the market value of our common
stock may decline and you may lose all or a portion of your
investment.
We have
only completed the initial stages of exploration of our properties, and thus
have no way to evaluate whether we will be able to operate our business
successfully. To date, we have been involved primarily in organizational
activities, acquiring interests in properties and in conducting preliminary
exploration of properties. We have not earned any revenues and have not achieved
profitability as of the date of this Prospectus.
We
are subject to all the risks inherent to mineral exploration, which may have an
adverse affect on our business operations.
Potential
investors should be aware of the difficulties normally encountered by mineral
exploration companies and the high rate of failure of such enterprises. The
likelihood of success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection with the
exploration of the mineral properties that we plan to undertake. These potential
problems include, but are not limited to, unanticipated problems relating to
exploration and additional costs and expenses that may exceed current estimates.
If we are unsuccessful in addressing these risks, our business will likely fail
and you will lose your entire investment.
We are
subject to the numerous risks and hazards inherent to the mining industry and
resource exploration including, without limitation, the following:
|
·
|
interruptions
caused by adverse weather
conditions;
|
|
·
|
unforeseen limited sources
of supplies resulting
in shortages of materials, equipment and
availability of
experienced manpower.
|
The
prices and availability of such equipment, facilities, supplies and manpower may
change and have an adverse effect on our operations, causing us to suspend
operations or cease our activities completely.
It
is possible that our title for the properties in which we have an interest will
be challenged by third parties.
We have
not obtained title insurance for our properties. It is possible that
the title to the properties in which we have our interest will be challenged or
impugned. If such claims are successful, we may lose our interest in such
properties.
Our
failure to compete with our competitors in mineral exploration for financing,
acquiring mining claims, and for qualified managerial and technical employees
will cause our business operations to slow down or be suspended.
Our
competition includes large established mineral exploration companies with
substantial capabilities and with greater financial and technical mineralized
materials than we have. As a result of this competition, we may be unable to
acquire additional attractive mining claims or financing on terms we consider
acceptable. We may also compete with other mineral exploration companies in the
recruitment and retention of qualified managerial and technical employees. If we
are unable to successfully compete for financing or for qualified employees, our
exploration programs may be slowed down or suspended.
Compliance
with environmental regulations applicable to our operations may adversely affect
our capital liquidity.
All
phases of our operations in Brazil and Canada, where our properties are located,
will be subject to environmental regulations. Environmental
legislation in Brazil and Canada is evolving in a manner which will require
stricter standards and enforcement, increased fines and penalties for
non-compliance, more stringent environmental assessments of proposed projects
and a heightened degree of responsibility for companies and their officers,
directors and employees. It is possible that future changes in
environmental regulation will adversely affect our operations as compliance will
be more burdensome and costly.
Because
we have not allocated any money for reclamation of any of our mining claims, we
may be subject to fines if the mining claims are not restored to its original
condition upon termination of our activities.
Our
directors may face conflicts of interest in connection with our participation in
certain ventures because they are directors of other mineral mineralized
material companies.
Mr.
Montgomery, who in addition to Mr. Pearl, serves as a director, may also be a
director of other companies (including mineralized material exploration
companies) and, if those other companies participate in ventures in which we may
participate, our directors may have a conflict of interest in negotiating and
concluding terms respecting the extent of such participation. It is
possible that due to our directors’ conflicting interests, we may be precluded
from participating in certain projects that we might otherwise have participated
in, or we may obtain less favorable terms on certain projects than we might have
obtained if our directors were not also directors of other participating mineral
mineralized materials companies. In an effort to balance their
conflicting interests, our directors may approve terms equally favorable to all
of their companies as opposed to negotiating terms more favorable to us but
adverse to their other companies. Additionally, it is possible that
we may not be afforded certain opportunities to participate in particular
projects because those projects are assigned to our directors’ other companies
for which the directors may deem the projects to have a greater
benefit
Our
future performance is dependent on our ability to retain key personnel, loss of
which would adversely affect our success and growth.
Our
performance is substantially dependent on performance of our senior
management. In particular, our success depends on the continued
efforts of Mr. Pearl. The loss of his services could have a material adverse
effect on our business, results of operations and financial condition as our
potential future revenues would most likely dramatically decline and our costs
of operations would rise. We do not have employment agreements in
place with any of our officers or our key employees, nor do we have key person
insurance covering our employees.
The
value and transferability of our shares may be adversely impacted by the limited
trading market for our shares.
There is
only a limited trading market for our common stock on the Pink Sheets. This may
make it more difficult for you to sell your stock if you so
desire.
Our
common stock is a penny stock and because "penny stock” rules will apply, you
may find it difficult to sell the shares of our common stock you acquired in
this offering.
Our
common stock is a “penny stock” as that term is defined under Rule 3a51-1 of the
Securities Exchange Act of 1934. Generally, a "penny stock" is a common stock
that is not listed on a national securities exchange and trades for less than
$5.00 a share. Prices often are not available to buyers and sellers and the
market may be very limited. Penny stocks in start-up companies are among the
riskiest equity investments. Broker-dealers who sell penny stocks must provide
purchasers of these stocks with a standardized risk-disclosure document prepared
by the Securities and Exchange Commission. The document provides information
about penny stocks and the nature and level of risks involved in investing in
the penny stock market. A broker must also give a purchaser, orally or in
writing, bid and offer quotations and information regarding broker and
salesperson compensation, make a written determination that the penny stock is a
suitable investment for the purchaser, and obtain the purchaser's written
agreement to the purchase. Consequently, the rule may affect the ability of
broker-dealers to sell our securities and also may affect the ability of
purchasers of our stock to sell their shares in the secondary
market. It may also cause fewer broker dealers to make a market in
our stock.
Many
brokers choose not to participate in penny stock transactions. Because of the
penny stock rules, there is less trading activity in penny stock and you are
likely to have difficulty selling your shares.
In
addition to the "penny stock" rules promulgated by the Securities and Exchange
Commission, Financial Industry Regulatory Authority (the “FINRA”) has adopted
rules that require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low-priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, FINRA believes that there is a high probability that speculative
low priced securities will not be suitable for at least some customers. FINRA
requirements make it more difficult for broker-dealers to recommend that their
customers buy our common stock, which may limit your ability to buy and sell our
stock and have an adverse effect on the market for our shares.
Sales
of a substantial number of shares of our common stock into the public market by
the Selling Stockholders may result in significant downward pressure on the
price of our common stock and could affect the ability of our stockholders to
realize any current trading price of our common stock.
Sales of
a substantial number of shares of our common stock in the public market could
cause a reduction in the market price of our common stock, when and if such
market develops. When this registration statement is declared effective, the
Selling Stockholders may be reselling up to 12,451,467 or approximately 18.20% of
the issued and outstanding shares of our common stock. As a result of such
registration statement, a substantial number of our shares of common stock which
have been issued may be available for immediate resale when and if a market
develops for our common stock, which could have an adverse effect on the price
of our common stock. As a result of any such decreases in price of our common
stock, purchasers who acquire shares from the Selling Stockholders may lose some
or all of their investment.
Future
sales of shares by us may reduce the value of our stock.
If
required, we will seek to raise additional capital through the sale of our
common stock. Future sales of shares by us could cause the market
price of our common stock to decline and may result in further dilution of the
value of the shares owned by our stockholders.
Note Regarding Forward Looking Statements
This
Prospectus contains forward-looking statements which involve assumptions and
describe our future plans, strategies, and expectations, are generally
identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of
these words or other variations on these words or comparable terminology. These
statements are expressed in good faith and based upon a reasonable basis when
made, but there can be no assurance that these expectations will be achieved or
accomplished.
Such
forward-looking statements include statements regarding, among other things, (a)
the potential markets for our technologies, our potential profitability, and
cash flows (b) our growth strategies, (c) expectations from our ongoing
sponsored research and development activities (d) anticipated trends in the
technology industry, (e) our future financing plans and (f) our anticipated
needs for working capital. This information may involve known and unknown risks,
uncertainties, and other factors that may cause our actual results, performance,
or achievements to be materially different from the future results, performance,
or achievements expressed or implied by any forward-looking statements. These
statements may be found under “MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS” and “DESCRIPTION OF OUR BUSINESS AND
PROPERTY,” as well as in this Prospectus generally. Actual events or
results may differ materially from those discussed in forward-looking statements
as a result of various factors, including, without limitation, the risks
outlined under “RISK
FACTORS” and matters described in this Prospectus generally. In light of
these risks and uncertainties, there can be no assurance that the
forward-looking statements contained in this filing will in fact occur. In
addition to the information expressly required to be included in this filing, we
will provide such further material information, if any, as may be necessary to
make the required statements, in light of the circumstances under which they are
made, not misleading.
Although
forward-looking statements in this report reflect the good faith judgment of our
management, forward-looking statements are inherently subject to known and
unknown risks, business, economic and other risks and uncertainties that may
cause actual results to be materially different from those discussed in these
forward-looking statements. Readers are urged not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
report. We assume no obligation to update any forward-looking statements in
order to reflect any event or circumstance that may arise after the date of this
report, other than as may be required by applicable law or regulation. Readers
are urged to carefully review and consider the various disclosures made by us in
our reports filed with the Securities and Exchange Commission which attempt to
advise interested parties of the risks and factors that may affect our business,
financial condition, results of operation and cash flows. If one or more of
these risks or uncertainties materialize, or if the underlying assumptions prove
incorrect, our actual results may vary materially from those expected or
projected. We will have little
likelihood of long-term success unless we are able to continue to raise capital
from the sale of our securities until, if ever, we generate positive cash flow
from operations.
Use Of Proceeds
This
Prospectus relates to shares of our common stock that may be offered and sold
from time to time by the Selling Stockholders. Although we will pay
the costs and expenses incurred in connection with the preparation and filing of
this Prospectus, we will receive no proceeds from the sale of shares of common
stock in this offering.
Determination of Offering Price
The
Selling Stockholders will determine at what price they may sell the offered
shares, and such sales may be made at prevailing market prices, or at privately
negotiated prices. Please refer
to “PLAN OF DISTRIBUTION.”
Market PRICE of and Dividends on Our Common Stock And
Related Stockholder Matters
Our
Common Stock is quoted on the Pink Sheets. The following table sets forth the
high and low bid prices for the Common Stock for the calendar quarters indicated
as reported by the Pink Sheets for the last two years. These prices represent
quotations between dealers without adjustment for retail mark-up, markdown or
commission and may not represent actual transactions. Our stock is also quoted
on the Frankfurt Exchange under the symbols “A4G.FSE,” and “A4G.ETR” and on the
Berlin-Bremen Exchange under the symbol “A4G.BER.”
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
|||||||||||||
2010
– High
|
$ | 0.55 | (1) | |||||||||||||
2010
– Low
|
$ | 0.38 | (1) | |||||||||||||
2009
– High
|
$ | 0.50 | $ | 0.33 | $ | 0.50 | $ | 0.70 | ||||||||
2009
– Low
|
$ | 0.16 | $ | 0.17 | $ | 0.06 | $ | 0.26 | ||||||||
2008
– High
|
$ | 0.51 | $ | 0.26 | $ | 0.12 | $ | 0.50 | ||||||||
2008
– Low
|
$ | 0.21 | $ | 0.05 | $ | 0.04 | $ | 0.04 | ||||||||
2007
– High
|
$ | 0.75 | $ | 0.61 | $ | 0.50 | $ | 0.40 | ||||||||
2007
– Low
|
$ | 0.54 | $ | 0.26 | $ | 0.26 | $ | 0.23 | ||||||||
2006
– High
|
$ | 2.10 | $ | 2.00 | $ | 1.20 | $ | 1.09 | ||||||||
2006
– Low
|
$ | 0.69 | $ | 0.77 | $ | 0.46 | $ | 0.60 | ||||||||
2005
– High
|
$ | 0.23 | $ | 0.12 | $ | 0.83 | $ | 0.73 | ||||||||
2005
– Low
|
$ | 0.09 | $ | 0.06 | $ | 0.06 | $ | 0.47 |
(1) The
high and low bid prices for our Common Stock for the First Quarter of 2010 were
for the period January 1, 2010 to January 31, 2010. The closing price
on February 1, 2010 was $0.41.
As of
January 31, 2010, there were 718 holders of record of the Common
Stock.
No cash
dividends were paid in 2008 or 2007. No cash dividends have been paid subsequent
to December 31, 2008. The amount and frequency of cash dividends are
significantly influenced by metal prices, operating results and our cash
requirements.
We do not
have securities authorized for issuance under an equity compensation
plan.
There are
2,300,000 shares reserved for issuance pursuant to options granted under the
Company’s stock option plan.
During
the fourth quarter of 2008, 2,603,333 shares were issued in connection with debt
settlements in December 2008 at $0.06 per share. The shares were issued to
individuals and companies who reside outside the United States of America (in
accordance with the exemption from registration requirements afforded by
Regulation S as promulgated thereunder).
In
September 2009, 3,000,000 common shares were issued at $0.10 per share for net
cash proceeds of $300,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
In
September 2009, convertible notes payable and related accrued interest
aggregating $739,152 (AUD $850,479) were settled through the issuance of
5,000,000 shares of common stock of the Company at $0.15 per share. The shares
were issued to individuals and companies who reside outside the United States of
America (in accordance with the exemption from registration requirements
afforded by Regulation S as promulgated thereunder).
In
November 2009, 100,000 shares were issued in connection with debt settlements at
$0.18 per share. The shares were issued to individuals and companies who reside
outside the United States of America (in accordance with the exemption from
registration requirements afforded by Regulation S as promulgated
thereunder).
In
November 2009, 150,000 shares were issued in connection with debt settlements at
$0.24 per share. The shares were issued to individuals and companies who reside
outside the United States of America (in accordance with the exemption from
registration requirements afforded by Regulation S as promulgated
thereunder).
In
December 2009, 1,666,667 common shares were issued at $0.30 per share for net
cash proceeds of $500,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
We did
not effect any repurchases of our securities during the fourth quarter of Fiscal
2008 or the subsequent period to January 31, 2010.
Dividend
Policy
We have
never paid cash dividends on our capital stock and do not anticipate paying any
cash dividends in the foreseeable future, but intend to retain our capital
mineralized materials for reinvestment in our business. Any future determination
to pay cash dividends will be at the discretion of the Board of Directors and
will be dependent upon our financial condition, results of operations, capital
requirements and other factors as the board of directors deems
relevant.
Management’s Discussion And Analysis Or Plan Of
Operations
The
following information should be read in conjunction with our interim unaudited
consolidated financial statements and notes thereto for the three and nine month
periods ended September 30, 2009 and 2008 and our audited consolidated financial
statements and related notes thereto for the years ended December 31, 2008 and
2007 included elsewhere in this Prospectus. We also urge you to review and
consider our disclosures describing various risks that may affect our business,
which are set forth under the heading “RISK
FACTORS.”
General
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 conduct our exploration and property acquisition
activities through our head office which is located at is located at
Baarerstrasse 10, 1st
Floor, Zug, 6300 Switzerland. The telephone number is (+41) 7887-96966. Our
Field office for exploration activities in Brazil is located at Estrada Do Bis,
476, Bairro, Bom Jardim, Itaituba, in the Tapajos gold province of the State of
Para, Brazil.
We had no
revenues during the nine month periods ended September 30, 2009 and 2008 and
during the fiscal 2008 and 2007. Funds raised in fiscal 2008 and 2007 were used
for exploration of our properties and general administration.
Significant
developments during the nine months ended September 30, 2009 and Subsequent
Events to January 31, 2010
We are a
mineral exploration company engaged in the exploration of base, precious metals
and industrial minerals worldwide.
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. The issuance price of the
shares issued on settlement was lower that the stated conversion price in the
loan agreements of $0.30 per share. Thus, this transaction was considered an
inducement to convert and accounted for as such resulting in a loss of
$1,014,465 being recorded in the three and nine months ended September 2009
related to this settlement.
During
the month of September 2009, we raised $300,000 through a private placement of
3,000,000 shares at a price of $0.10 per share to eight persons. Our
placement agent was 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.
The
Company has two separate unsecured loans payable of $250,000, bearing interest
at 6% per annum, due on demand unsecured.
In
November 2009, we 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. We 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. We are currently conducting due diligence and also
further discussions with the vendors as to decide on the future of the
project.
In
December 2009, 1,666,667 common shares were issued at $0.30 per share for net
cash proceeds of $500,000. These shares were issued to one individual
who resides outside the United States of America.
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
nine months period ended September 30, 2009, we recorded exploration expenses of
$51,562 compared to $88,199 for the same period in 2008. The following is a
breakdown of the exploration expenses by property: Brazil $49,545 (2008 -
$85,649) and Canada, Kumealon property $2,017 (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,
Branca de Neve, Bigode (option since relinquished) and Santa Lúcia 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. We have since
cancelled the Piranhas, Branca de Neve and Santa Lúcia agreements.
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 mineral exploration licenses located in the Municipality
of Itaituba, in the Tapajos gold province of the State of Pará,
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 São Domingos property.
The São
Domingos cluster of properties 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 – Samba Minerals earning an 80% interest by funding to
feasibility
The São
João property area is located approximately 20km west of our São Domingos
property and covers an area of approximately 5.160 hectares.
Santa
Isabel – option since relinquished
The Santa
Isabel Property lies in the southwestern region of the Tapajos Gold Province,
Para State, Brazil and comprises an area of 3.650 hectares.
In March
2007 we decided not to follow up our preliminary exploration program on the
Santa Isabel property and decided not to exercise our option to acquire the
property.
Novo
Porto - option since relinquished
The Novo
Porto property lies approximately 180km south of Itaituba and covered an area of
approximately 6.600 hectares. Due to changes in the Government land
management the area that encompassed the Nova Porto project and our property
interest was deemed to be in a non active commercial mining zone.
In March
2006 we decided not to follow-up our preliminary exploration program on the Novo
Porto property and decided not to exercise our option to acquire the
property.
Ouro
Mil - option since relinquished
The Ouro
Mil property is located approximately 20 km south of Santa Isabel property area
and approx 300km South of Itaituba, and covers an area of 9.794
hectares.
In
October 2006 we decided not to follow up our preliminary exploration program on
the Ouro Mil property and decided not to exercise our option to acquire the
property.
Branca
de Neve - option since relinquished
The
Branca de Neve property adjoins our Piranhas property and is located
approximately 50 km NE of our São Domingos property, and covers an area of
approximately 2.210 hectares
Piranhas
- option since relinquished
The
Piranhas property adjoins the South western boundary of our Branca de Neve
property and covers an area of approximately 9.341 hectares.
Bigode-
option since relinquished
The 4.150
hectare Bigode property adjoins the southeast portion of our São Domingos
property, and is approximately 30 km north of our Santa Isabel
property.
Santa
Lúcia - option since relinquished
The 1.600
hectare Santa Lúcia property is located 1,270 km SSW of the main regional centre
of Itaituba. The property is located 10 km south west of the
Company’s Santa Isabel property.
Comandante
Araras - Samba Minerals earning an 80% interest by funding to
feasibility
The 2.750
hectare Comandante Araras property is located 10 km west of the Company’s 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.
Front
Range Gold Project – Currently under Due Diligence
The Front
Range Gold JV property is located about 16 km west of the city of Boulder
Colorado, USA, and consists of 85 patented and 21 unpatented lode claims,
totalling approximately 480 acres (about 3/4 square mile). The property lies in
the Gold Hill Mining District of Boulder County, and includes eighteen past
producing mines. These mines produced gold, silver, and gold-tellurides from
narrow quartz veins hosted in Precambrian granites and gneisses.
Results
of Operations
Three
and Nine months ended September 30, 2009 versus Three and Nine months ended
September 30, 2008
The
Company has yet to generate any revenues or establish any history of profitable
operations. For the three and nine months ended September 30, 2009 we recorded a
net loss of $1,232,548 (2008 net loss - $74,540) and $1,519,511 (2008 net loss -
$520,788) or $(0.02) [2008 – $(0.00)] and $(0.03) [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 nine months ended
September 30, 2009 we recorded expenses of $193,102 (2008 - $52,046) and
$453,484 (2008 - $432,589) respectively. This amount includes, professional fees
- accounting $4,063 (2008 - $4,936) and $16,063 (2008 - $48,218) respectively
and legal $0 (2008 - $9,350) and $10,788 (2008 - $136,125) respectively. Recent
developments in capital markets have restricted access to debt and equity
financing for us. As a result, we reduced our 2009 capital spending requirements
in light of the current and anticipated, global economic
environment.
Exploration expenditures –
Exploration expenses are charged to operations as they are incurred. For the
three and nine months ended September 30, 2009 we recorded exploration expenses
of $24,981 (2008 - $22,494) and $51,562 (2008 - $88,199) respectively. The
following is a breakdown of the exploration expenses by property: Brazil $24,981
(2008 – $22,494) and $49,545 (2008 - $85,649) respectively and Canada, Kumealon
property $0 (2008 - $0) and $2,017 (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. Recent developments in capital markets have restricted access to debt
and equity financing for us. As a result, we reduced our 2009 exploration
spending requirements in light of the current and anticipated, global economic
environment
Depreciation expense –
Depreciation expense charged to operations for the three and nine months ended
September 30, 2009 were $3,485 (2008 - $3,920) and $9,431 (2008 - $11,560)
respectively.
Year
Ended December 31, 2008 (Fiscal 2008) versus Year Ended December 31, 2007
(Fiscal 2007)
For the
year ended December 31, 2008 we recorded a loss of $520,105 or $0.01 per share,
compared to a loss of $3,259,732 or $0.07 per share in 2007.
General and administrative
expenses – For the year ended December 31, 2008 we recorded general and
administrative expenses of $442,832 (fiscal 2007 - $1,225,857). The fiscal 2008
amount includes professional fees - accounting $56,898 (fiscal 2007 - $53,509)
and legal $79,540 (fiscal 2007 - $180,253).
Exploration expenditures - For
the year ended December 31, 2008 we recorded exploration expenses of $77,273
compared to $2,033,875 in fiscal 2007. The following is a breakdown of the
exploration expenses by property: Brazil $74,723 (2007 - $2,031,700) and Canada,
Kumealon property $2,550 (2007 - $2,175).
Depreciation expense – For the
year ended December 31, 2008 we recorded depreciation expense of $14,426
compared to $12,326 in fiscal 2007.
Capital
Resources and Liquidity
September
30, 2009 versus December 31, 2008
At
September 30, 2009, we had cash of $155,046 (December 31, 2008 - $16,511) and a
working capital deficiency of $1,182,803 (December 31, 2008 - $1,092,000). Total
liabilities as of September 30, 2009 were $1,372,400 as compared to $1,691,579
on December 31, 2008, a decrease of $319,179.
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
September 30, 2009 interim consolidated financial statements, we have incurred
recurring operating losses since inception, have not generated any operating
revenues to date and used cash of $170,900 from operating activities in 2009
through September 30. We will require 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
September 30, 2010 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.
Plans
for Year 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 and we do not have any agreements or arrangements
with respect to any such 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.
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.
Our
exploration work program in 2010 will focus on the Brazilian properties and 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 the 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.
In late
May 2006 we followed up previous 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 Fofoca 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.
After
reviewing the geology and grade continuity from 2006 drilling on the Mineralized
material at the Sao Domingos- Fofoca project, the Company initiated further
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. The initial calculation resulted in a volume of mineralized material
containing approximately 130,000 ounces of gold at 2.0 g/t using a cut off 0f
0.5 g/t.
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
Fofoca could evolve along strike and link up with other noted targets further
along strike. To test the strike continuity a ground geophysical survey was
conducted during the third quarter of 2007 along the Fofoca mineralized
structure. The results demonstrated that geophysical anomalism,
similar to that recognized over the known mineralization of the Fofoca
mineralization, was noted and the anomaly continues further west to join up with
the known mineralization of the Cacheira area. The results also show
that this mineralization may split into other loads of mineralization of similar
proportions to that known over the current mineralization. This has
the potential to increase the known resource by at least 50%.
In 2010,
we will continue to follow up exploration on the Fofoca area and to initiate
further exploration programs on other areas of the Sao Domingos
property. It is anticipated that we will drill a series of holes
within the Fofoca area for engineering and metallurgical test work as well as to
test for depth extensions of the known mineralization. Other
Exploration on the São Domingos property areas will involve further mapping of
the outcrop geology and sampling soils and scree from shafts of previous workers
in order to confirm lithologies and structural trends noted from drilling and
published 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 we plan to conduct further
investigation.
A recent
discovery was made on the Atatcadau area and has been called
Colibri. Here artisanal miners uncovered an area of stock work
mineralization that 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 mineralization channels were
conducted. The results showed that there are possible correlations to
the Atacadau mineralization 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 in the Fofoca area.
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.
Together
with our partner, Samba, we completed a ground geophysics program on the Sao
Joao property. The program targeted areas of known mineralization and covered
the area along to the northeast to link up with other known
mineralization. Results to date show that the area has a geophysical
trend continuing on from the known mineralization. During the
geophysics program, other veins were noted and sampled and returned anomalous
gold grades. Together with Samba, in 2010, we intend to evaluate the
geophysics and determine various targets to test the sub surface extent of the
known mineralization, and to test the geophysical anomalies within the
area.
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 2010.
We are
currently conducting due diligence on the Front Range Property in Boulder
Colorado and should we go forward with the acquisition Aurora plans to update
all permits and schedule operations with a view to recommencing the production
of gold concentrate.
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 September 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.
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.
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.
Description of Our Business and
Property
We
conduct our activities from our principal and technical office located at
Baarerstrasse 10, 1st
Floor, Zug, 6300, Switzerland. These offices are provided to us on a month to
month basis. We believe that these offices are adequate for our
purposes. We do not own any real property or significant assets.
Management believes that this space will meet our needs for the next 12
months.
Mining
Properties
Our
properties are in the preliminary exploration stage and do not contain any known
bodies of ore.
We
conduct exploration activities from our principal and technical office located
at Baarerstrasse 10, 1st
Floor, Zug, 6300, Switzerland. The telephone number is (+41)
7887-96966. We believe that these offices are adequate for our
purposes and operations.
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 Latin America, 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. Please refer to “Risk
Factors.”
We
currently have an interest in three (3) projects located in Tapajos gold
province in Para State, Brazil and one property located in British Columbia,
Canada and we have the right to earn up to a 70% interest in the Front Range
Property. We have conducted only preliminary exploration activities
to date and may discontinue such activities and dispose of the properties if
further exploration work is not warranted.
Figure
1.
|
Brazil,
South America-property locality
guide
|
Between
December 21, 2005 and May 26, 2006 we signed four MOUs covering the Piranhas,
Branca de Neve, Bigode and Santa Lúcia 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
provided 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, Ouro Mil, Santa Isabel, São Domingos and São João mineral exploration
licenses located in the Municipality of Itaituba, in the Tapajos gold province
of the State of Para, Brazil.
Brazil
Memorandum of Understandings, Option
Agreements and Property descriptions:
Piranhas – agreement
cancelled
Location
and access
The
project is located in the mid section of the Tapajos gold province of northern
Brazil, in the state of Para. Access is by light aircraft from the
regional centre of Itaituba, where the company maintains a small administration
centre. Further access is by unsealed roads linking up to the
unsealed Trans Garimpeiro Highway, which links to all national
highways.
Tenure
The
project covers an area of 9.341 hectares and was granted in 1993 and 1996 as
exploration license number 855.892/1996 to 856.289/1996 (Block 1) and 853.597 to
853.638/1993 (Block 2) by the Brazilian National department of Mineral
Production DNPM - Departamento Nacional de Produção Mineral, and expires in
April 2010.
Memorandum
of Understanding
The
Piranhas MOU provided us with a 180 day review period to access the gold
potential of the property. If we decided to proceed with acquiring a 100 percent
interest in the title to the mineral rights then we would have given notice to
the vendors of our intention to acquire title to the mineral rights at least
five days prior to the expiration of the aforementioned period. We would then
have entered into an option agreement with the property vendors for the
Assignment and transfer of the mineral rights.
Option
Agreement
The terms
of the Piranhas option agreement, as specified in the MOU, allowed us to perform
geological surveys and assessment work necessary to ascertain the existence of
possible mineral deposits which may be economically mined and to earn a 100%
interest in the Piranhas project mineral rights via structured cash
payments. The total option agreement payments for the license were
structured as follows:
June
30, 2006
|
$30,000
(paid)
|
July
21, 2006
|
$70,000
(paid and cancelled Block 1);
|
July
21, 2007
|
$120,000
(advanced R$10,000 in September 2007 and subsequently relinquished
option);
|
July
21, 2008
|
$180,000
|
July
21, 2009
|
$1,600,000
|
Total
|
$2,000,000.
|
The
vendor would have a 1.5% Net Smelter Royalty. The option agreement could be
terminated at any time upon written notice to the vendor and we would have been
free of any and all payment commitments yet to be due.
The
option agreement has been cancelled.
Geology
The
property is located within the Parauari Intrusive Suite. Limited
lithological inspection has shown the area to host mineralized quartz
veins. The dominant North and NNW structures are thought to represent
relicts of the original mineralizing event. The property is located
approx 50 km east of the Brazauro mineralized materials Corporation’s
Tocantinzinho property.
Branca
de Neve - agreement cancelled
Location
and access
The
Branca de Neve project is located in mid section of the Tapajos Gold Province
and is accessed by light aircraft from Itaituba and from unsealed 4WD access
from the adjoining Piranhas property. The Transgarimpeiro highway
passes to the south of the property and provides seasonal heavy vehicle
access.
Tenure
The
project covers an area of 2.210 hectares and was granted in 2006 as exploration
license number 850.118/2006 by the Brazilian National department of Mineral
Production DNPM - Departamento Nacional de Produção Mineral, and expires in
2010. The area covering the property has since been incorporated into the
Brazilian government land management scheme which restricts all mining
activity.
Memorandum
of Understanding
The
Branca de Neve MOU provided us with a review period to access the gold potential
of the property. If we decided to proceed with acquiring a 100 percent interest
in the title to the mineral rights then we would have given notice to the
vendors of our intention to acquire title to the mineral rights at least five
days prior to the expiration of the aforementioned period. We would then have
entered into an option agreement with the property vendor for the assignment and
transfer of the mineral rights.
Option
Agreement
The terms
of the Branca de Neve option agreement, as specified in the MOU, allowed us to
perform geological surveys and assessment work necessary to ascertain the
existence of possible mineral deposits which may be economically mined and to
earn a 100% interest in the Branca de Neve property mineral rights via
structured cash payments. The total option agreement payments for the
license were structured as follows:
April
28, 2006
|
R$35,0001
(paid) (approximately USD $20,181 at
12/31/2009)
|
October
25, 2006
|
R$35,000
(paid) (approximately USD $20,181 at
12/31/2009)
|
April
25, 2007
|
R$35,000
(approximately USD $20,181 at 12/31/2009) (paid R$5,000 which is
approximately USD $2,883 at 12/31/2009 and cancelled option
agreement);
|
October
25, 2007
|
R$35,000
(approximately USD $20,181at
12/31/2009);
|
April
25, 2008
|
R$35,000
(approximately USD $20,181 at
12/31/2009);
|
October
25, 2008
|
R$35,000
(approximately USD $20,181 at
12/31/2009);
|
April
25, 2009
|
R$35,000
(approximately USD $20,181 at
12/31/2009);
|
April
25, 2009
|
R$500,000
(approximately USD $213,500 at
12/31/2008)
|
Total
|
R$745,000
(approximately USD $318,115 at
12/31/2008)
|
___________
1
“Reals” is the Brazilian currency. On December 31, 2009 the exchange rate was 1
Real equaled 0.57660 US dollar.
The
vendor would have a 0.75% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment of
R$500,000. The option agreement could be terminated at any time upon written
notice to the vendor and we would have been free of any and all payment
commitments yet to be due.
The
option agreement has been cancelled.
Geology
Locally
the Branca de Neve property geology is set in the highly prospective Pararui
Granite Intrusive suite and has a series of brittle deformation
events. North South trending regional faults dominate the property
and are considered to be related to the North West trending regional structures
noted in this area of the Tapajos, which extend from the São Domingos
property. We have completed limited soil sampling and rock chip
exploration. We are currently focusing on other projects which have a
higher current ranking.
Bigode
– agreement cancelled
Location
and access
The
Bigode project is located in the mid east of the Tapajos Gold province and
adjoins to the south east with the Company’s primary project at Sao
Domingo. Access is by light aircraft to the small township at Sao
Domingo and then by 4WD 5km to the target area.
Tenure
The
project covers an area of 4.150 hectares and was granted in 1997 as exploration
license number 751.228/1997 to 751.237/1997 and 755.311/1997 to 755.416/1997 by
the Brazilian National department of Mineral Production DNPM - Departamento
Nacional de Produção Mineral, and expires in 2012.
Memorandum
of Understanding
The
Bigode MOU provided us with a 180 day review period to access the gold potential
of the property. We are no longer negotiating with the property vendor to enter
into an option agreement. If we decided to proceed with acquiring a 100 percent
interest in the title to the mineral rights then we would have given notice to
the vendors of our intention to acquire title to the mineral rights at least
five days prior to the expiration of the aforementioned period. We would then
have entered into an option agreement with the property vendors for the
assignment and transfer of the mineral rights.
Option
Agreement
The terms
of the Bigode option agreement, as specified in the MOU, allowed us to perform
geological surveys and assessment work necessary to ascertain the existence of
possible mineral deposits which may be economically mined and to earn a 100%
interest in the Bigode property mineral rights via structured cash
payments.
The total
option agreement payments for the license were structured as
follows:
October
30, 2006
|
US
$60,000 (paid);
|
October
30, 2007
|
US
$40,000 (paid);
|
October
31, 2007
|
US
$13,118 (paid);
|
January
30, 2008
|
US
$40,000 (paid and cancelled option
agreement);
|
October
30, 2008
|
US
$90,000;
|
October
30, 2009
|
US
$100,000;
|
October
30, 2010
|
US
$1,000,000
|
Total
|
US
$1,343,118.
|
The
vendor would have a 0.75% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment of
USD$500,000. The option agreement could be terminated at any time upon written
notice to the vendor and we would have been free of any and all payment
commitments yet to be due.
The
option agreement has been cancelled.
Geology
The
property is located within the highly prospective Parauari Intrusive Suite,
which is the host of several gold deposits and showings within the Southern
Tapajos. Limited lithological inspection has shown the area is host
to mineralized quartz veins. Similar to the Sao Domingos
property, the dominant North and NNW structures are thought to represent relicts
of the original mineralizing event. Preliminary investigation of the property
area has confirmed the existence of mineralized quartz veins and stockwork
systems within these Intrusive Granite Suites.
We
conducted an initial rock chip sampling program over an area recently being
excavated for free gold in alluvial systems and the weathered granitic
overburden via water canon and sluice. The sample results demonstrate
that the quartz vein systems are highly mineralized and can be traced across the
river valley for at least 200m.
Santa
Lúcia - agreement cancelled
Location
and access
Access to
the property area is by light aircraft direct to the property or by river
utilizing the Surubim River, a tributary of the Tapajos, which connects to the
Amazon and to all major ports and the seaport of Belem. Road access
is by the Trans Garimpeiro Highway via the Trans Amazon highway and ferry river
crossings.
Tenure
The
project covers an area of 1.600 hectares and was granted in 1993 as exploration
license number 854.001/1993 to 854.032/1993 by the Brazilian National department
of Mineral Production DNPM - Departamento Nacional de Produção Mineral, and
expires in 2102.
Memorandum
of Understanding
The Santa
Lúcia MOU provided us with a 90 day review period to access the gold potential
of the property. If we decided to proceed with acquiring a 100 percent interest
in the title to the mineral rights then we would have given notice to the
vendors of our intention to acquire title to the mineral rights at least five
days prior to the expiration of the aforementioned period. We would then have
entered into an option agreement with the property vendors for the assignment
and transfer of the mineral rights.
Option
Agreement
The terms
of the Santa Lúcia option agreement, as specified in the MOU, allowed us to
perform geological surveys and assessment work necessary to ascertain the
existence of possible mineral deposits which may be economically mined and to
earn a 100% interest in the Santa Lúcia property mineral rights via structured
cash payments.
The total
option agreement payments for the license were structured as
follows:
September
1, 2006
|
US
$20,000 (paid and cancelled option
agreement);
|
March
1, 2007
|
US
$50,000;
|
March
1, 2008
|
US
$60,000;
|
March
1, 2009
|
US
$70,000;
|
September
1, 2009
|
US
$500,000
|
Total
|
US
$700,000.
|
The
vendor would have a 1.5% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of US $1,000,000. The option agreement
could be terminated at any time upon written notice to the vendor and we would
have been free of any and all payment commitments yet to be due.
The
option agreement was cancelled.
Geology
Granites
of the Pararui Intrusive Suite, long known to host significant precious metal
mineralization, dominate the local geology, with occasional later granitic
stocks of the Maloquinha intrusive suite. Sub vertical mineralized
quartz veins with widths from 20 cm to 60 cm strike between 310 and 330,
mimicking the regional structural trend. Recent samples of these
veins assayed between 17 and 25.9 g/t Gold.
Previous
work on the project is limited to alluvial mining of the tributaries of the
Surubim, and many areas of primary mineralization of pyrite associated with gold
have been uncovered as a result.
The
Surubim River Valley, connecting the Santa Lúcia and Santa Isabel properties,
was the focus of intense alluvial mining with an estimated 200,000 m3 of
alluvial material grading greater than 1g/t, with material near the Santa Isabel
border grading up to 3g/t. These figures are more than triple the
grades generally mined by artisanal methods in the Tapajos, suggesting a
high-grade proximal source.
Novo
Porto – agreement cancelled
Location
and access
The Nova
Porto property is located in the north eastern area of the Southern Tapajos Gold
Province. Access to the property area is by light aircraft direct to
the property or by river via tributaries of the Tapajos
River. Further access is available on unsealed seasonal
roads.
Tenure
The
project covered an area of 6.600 hectares. The area covering the
property has since been incorporated into the Brazilian government land
management scheme which restricts all mining activity. We have since
not carried on our commitments to the property.
Option
Agreement
The Novo
Porto option agreement allowed us to perform geological surveys and assessment
work necessary to ascertain the existence of possible mineral deposits which may
be economically mined and to earn a 100% interest in the Novo Porto property
mineral rights via structured cash payments.
The total
option agreement payments for the license were structured as
follows:
December
25, 2005
|
US
$2,500 (paid);
|
January
15, 2006
|
US
$10,000 (paid);
|
May
30, 2006
|
US
$37,500;
|
May
30, 2007
|
US
$50,000;
|
May
30, 2008
|
US
$75,000;
|
May
30, 2009
|
US
$1,850,000
|
Total
|
US
$2,025,000.
|
The
agreement was not formally executed until 2006 and the initial payment of $2,500
due December 25, 2005 was not paid until 2006. The option agreement could be
terminated at any time upon written notice to the vendor and we would have been
free of any and all payment commitments yet to be due.
In March
2006 we decided not to follow-up our preliminary exploration program on the Novo
Porto property and have decided not to exercise our option to acquire the
property and the option agreement was cancelled.
Geology
The Novo
Porto property, as noted on the CPRM (Servico Geologico Do Brazil) 1:250,000
geology maps, as a large alluvial area, which has produced gold over an unknown
period. These alluvial workings lie in a NW trending river valley
formed on the faulted contact between the Pararui Intrusive Suite to the west
and the later Maloquinha Intrusive Suite to the west. Else where in
the region the Pararui Intrusive Suite is host to many other gold
deposits.
Ouro
Mil – agreement cancelled
Location
and access
The Ouro
Mil property is located in the south western area of the Southern Tapajos Gold
Province. Access to the property area is by light aircraft direct to
the property or by river via the Surubim River which forms one of the
tributaries of the Tapajos River. Further access is available on
unsealed seasonal roads.
Tenure
The
project covers an area of 9.794 hectares and was granted in 1995 and 2006 as
exploration license number 850.011/2006 and 851.867/1995 to 851.921/1995 and
851.252/1995 to 851.265/1995 and 851.273/1995 to 851.276/1995 by the Brazilian
National department of Mineral Production DNPM - Departamento Nacional de
Produção Mineral, and expires in 2012. The area covering the property has since
been incorporated into the Brazilian government land management scheme which
restricts all mining activity. We have since not carried on our
commitments to the property.
Option
Agreement
The Ouro
Mil option agreement allowed us to perform geological surveys and assessment
work necessary to ascertain the existence of possible mineral deposits which may
be economically mined and to earn a 100% interest in the Ouro Mil property
mineral rights via structured cash payments.
The total
option agreement payments for the license were structured as
follows:
January
20, 2006
|
US
$30,000 (paid);
|
July
20, 2006
|
US
$70,000 (paid R$15,000, approximately US $8,481 at 12/31/2007 and
terminated option agreement);
|
July
20, 2007
|
US
$120,000;
|
July
20, 2008
|
US
$180,000;
|
July
20, 2009
|
US
$1,500,000
|
Total
|
US
$1,900,000.
|
The
vendor would have a 1.5% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of US $1,000,000.The option agreement
could be terminated at any time upon written notice to the vendor and we would
have been free of any and all payment commitments yet to be due.
In
October 2006 we decided not to follow up our preliminary exploration program on
the Ouro Mil property and have decided not to exercise our option to acquire the
property and cancelled the option agreement.
Geology
The Ouro
Mil property is situated within a north west trending part of the Creporizao
Intrusive Suite along an E-NE shear subordinate to the NW trending regional
shear of the area. The western margin of this portion of the
Creporizao Intrusive Suite is in a NW faulted contact with the Pararui Intrusive
Suite, and similarly the eastern margin is in a NW faulted contact with the
Cuiu-Cuiu Complex.
Previous
mining at Ouro Mil property, via water canon and a sluice of surficial oxides,
recovered 600kg of gold. The area is dominated by a quartz vein stock
work system in weathered porphyritic granite. A moderately to
well-developed laterite profile exists and is exposed in previous mining areas
around the property.
Santa
Isabel – agreement cancelled
Location
and access
The Santa
Isabel property is located in the mid southern area of the Southern Tapajos gold
province. The Santa Isabel property area is accessed by a private
airstrip, and seasonal boat access via a tributary of the Rio Nova, which
eventually empties into the Tapajos River. Road access is by the
Trans Garimpeiro Highway via the Trans Amazon highway and ferry river
crossings.
Tenure
The
project covers an area of 3.650 hectares and was granted in 1994 and 1997 as
exploration license number 850.624/1994 to 850.666/1994 and 854.717/1997 to
854.738/1997 by the Brazilian National department of Mineral Production DNPM -
Departamento Nacional de Produção Mineral, and expires in 2012.
Option
Agreement
The Santa
Isabel option agreement allowed us to perform geological surveys and assessment
work necessary to ascertain the existence of possible mineral deposits which may
be economically mined and to earn a 100% interest in the Santa Isabel property
mineral rights via structured cash payments.
The total
option agreement payments for the license were structured as
follows:
February
7, 2006
|
US
$25,000 (paid);
|
July
21, 2006
|
US
$60,000 (paid, Option agreement
cancelled)
|
July
21, 2007
|
US
$80,000;
|
July
21, 2008
|
US
$100,000;
|
July
21, 2009
|
US
$1,500,000
|
Total
|
US
$1,765,000.
|
The
vendor would have a 1.5% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of US $1,000,000. The option agreement
could be terminated at any time upon written notice to the vendor and we would
have been free of any and all payment commitments yet to be due.
In March
2007 we decided not to follow up our preliminary exploration program on the
Santa Isabel property and have decided not to exercise our option to acquire the
property and the option agreement was cancelled.
Geology
The
property area is located approximately 50 km south of the São Domingos property
area. The principal property area is situated within the Pararui
Intrusive Suite. To the immediate west the Pararui Suite is in
faulted contact with the later Maloquinha Intrusive Suite, and the Maloquinha
Intrusive suite is in faulted contact with the Creporizao Intrusive Suite,
further to the west. The Pararui Suite and the Creporizao Intrusive
Suite play host to the vast majority of hard rock gold deposits and occurrences
within the Tapajos gold Province.
The
property area is dominated by a series of regional N to NNW trending regional
faults, and these orientations are also noted at mine scale as seen in the
mineralized quartz veins within the property area.
Historically
the Santa Isabel property focused mining activities on the alluvial deposits
within the many tributaries, and progressed to include saprolite host rock and
out cropping quartz veins.
São
Domingos
Location
and access
The Sao
Domingos property comprises of a cluster of tenements grouped together and known
as the Sao Domingos. The property areas lie in the Tapajos Province of Para
State, Brazil. It is situated approximately 250 km SE of Itaituba, the regional
centre, and includes an area of nearly 8000
ha. Small aircraft service Itaituba daily and on this occasion
flights were sourced via Manaus. Access from Itaituba to site is by small
aircraft or unsealed road of average to poor quality. The road is subject to
seasonal closures and as the visit was at the end of the ‘wet’ season site
access was granted via light aircraft utilizing the local airstrip.
Tenure
The
project covers an area of 6.100 hectares and was granted in 1995 as exploration
license number 859.587/1995 and 850.990/1995 to 851.019/1995 by the Brazilian
National department of Mineral Production DNPM - Departamento Nacional de
Produção Mineral, and expires in 2012. These licenses were
restructured by adding further applications and reductions of some areas under
option. Currently the Company has tenure over Processo Nos.
850.782/2005, 850.119/2006, 850.684/2006, 859.1995/1995. For ease of
reference please see the map below.
Option
Agreement
The São
Domingos option agreement relates only to the Ata block (see map above in pink)
allowed us to perform geological surveys and assessment work necessary to
ascertain the existence of possible mineral deposits which may be economically
mined and to earn a 100% interest in the São Domingos property mineral rights
via structured cash payments. Subsequent to geological surveys and
assessment work necessary to ascertain the existence of possible mineral
deposits, the Ata area was considered not viable for an economic
deposit. The Company has since returned the portions of the license
under the option agreement and now has 4 license agreements free from further
option payments.
The total
option agreement payments for the Ata block (in pink on the map above) which
formed part of the group called Sao Domingos for the license were structured as
follows:
February
7, 2006
|
US$40,500
(paid);
|
July
30, 2006
|
US
$67,500 (paid);
|
July
30, 2007
|
US
$112,500 (payment not made, license
returned);
|
July
30, 2008
|
US
$139,500; (payment not made, license
returned));
|
December
30, 2008
|
US
$675,000: (payment not made, license
returned));
|
Total
|
US
$1,035,000.
|
The
vendor would have a 2.0% Net Smelter Royalty. The Royalty payment can be
purchased at any time upon written notice to the vendor and payment in Reals of
the equivalent of US $500,000. The option agreement can be terminated at any
time upon written notice to the vendor and we will be free of any and all
payment commitments yet to be due. We have since terminated the option over the
Ata block and are free of any vendor payments and any NSR.
Geology
Regional
Geology
The
Tapajos Gold Province comprises an area of approximately 300km by 350km located
in south westerly reaches of the state of Para. The dominant
lithologies are composed of Paleoproterozoic aged volcanic and plutonic rocks,
and hosts gold mineralization related to two metallogenic events. The older
event comprises orogenic mesothermal shear hosted lode deposits, while the
younger event related to emplacement of post-orogenic alkaline granitoids as
volcanic edifices and along structural corridors, is constituted by epithermal
to epizonal type deposits.
Aurora’s
project area lies on a dominant NW faulted contact between the Parauari
Intrusive Suite and the later Maloquinha Suite, and this contact has been the
focus of large-scale alluvial workings.
Local
Geology
The
geology of the Sao Domingos property is predominantly composed of
paleo-proterozoic Parauari Granites that play host to a number of gold deposits
in the Tapajos Basin. Typical Granites of the younger Maloquinha Intrusive Suite
have been noticed in the vicinity of Fofoca Gold Target, and basic rocks
considered to be part of the mesoproterozoic Cachoeirinha Seca Intrusive Suite
occur around the Esmeril target area.
The São
Domingos property was previously large alluvial operation, and the property
covers numerous areas of workings. To date the Company has outlined
three (3) prime targets, Atacadao, Esmeril, and Colibri for the São Domingos
follow up exploration. There are several other lower priority targets
that the Company intends to follow up as part of the exploration programs for
the future.
All
targets are located around a series of regional brittle and ductile structures
trending NW, NE and NNW within the Parauari Intrusive Suite and adjacent to the
later Maloquinha Intrusive Suite. The Parauari Intrusive Suite has
proven to host the vast majority of gold deposits elsewhere within the Tapajos
Gold Province. This area has also previously been the focus of
large-scale alluvial workings.
Preliminary
investigation of all three (3) prime target areas has confirmed the existence of
mineralized quartz veins and stockwork systems within these Intrusive Granite
Suites.
The
Atacadao area is an alluvial system and is the result of gold being shed from
the surrounding granitic topographic highs. These hills are part of
the Pararui Intrusive Suite, and locally contain well-developed mineralized
stock work quartz veins. Numerous production shafts are located on
the flanks of the hills, trending along a major property scale east/west fault
and Aurora is confident of the potential for further mineralization at depth.
Preliminary investigations proved the local topographic highs to be part of the
Parauari Intrusive Suite with well-developed stock work
quartz. Initial inspection of the quartz veins showed them to be
clearly mineralized and final results of initial sampling confirmed high grades
of gold, up to 42.56g/t Gold with 20g/t silver within the quartz stock
works. Locally, previous shallow, up to 10 meter, production shafts
focused on an E-W sub-vertical, project scale brittle structure, which can be
traced for several hundreds of meters, and is thought to link up to the high
grade occurrences noted at a distance of approximately 5 km.
Esmeril
was the centre of recent mining activity targeting the highly oxidised fraction
of the porphyritic host rock. The stockwork veins, exposed by previous workers,
show boxwork and fresh sulphides and generally associated with ferruginous
staining of both the veins and the enclosing country rock.
Within
the project area the main structures strike NE-SW to E-W. Nearly all documented
quartz veins and vein rock zones run parallel to this general tectonic trend
suggesting the mineralization is frequently related to the fracturing of the
host rocks. Gold, silver, sphalerite, galena, pyrite, chalcopyrite, millerite,
malachite and azurite are common minerals found within the rocks of the project
area.
A recent
discovery was made on the Atatcadau area and has been called
Colibri. Here artisanal miners uncovered an area of stock work
mineralization 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 mineralization channels were
conducted. The results showed that there are possible correlations to
the Atacadau mineralization 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.
São
João – Samba Minerals farm in agreement
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 project by funding exploration
expenditures to completion of a feasibility study on the property. Upon
completion of a feasibility study, the Company will immediately transfer an 80%
participation interest in the property to Samba and enter into a formal joint
venture agreement to govern the development and production of minerals from the
property. Samba can terminate its participation by providing the Company 30 days
notice in writing. Upon withdrawal from its participation, Samba would forfeit
to the Company all of its rights in relation to the project and would be free of
any and all payment commitments yet to be due. Samba will be the manager of the
São João project. A feasibility study has not been completed as of September 30,
2009 and thus no joint venture has been formed as of that date.
Location
and access
The Sao
Joao property is located in the central portion of the Southern Tapajos basin
and is accessed by light aircraft from the regional centre of
Itaituba. Access is also possible by unsealed roads linking up to the
Transgarimpeiro highway and by a purpose cut heavy vehicle access track linking
Sao Joao to the exploration centre at the primary project at Sao
Domingos.
Tenure
The
project covers an area of 5.160 hectares and was granted in 1994 and 2005 as
exploration license number 851.533/1994 to 851.592/1994 and 850.091/2005 by
the
Brazilian National department of Mineral Production DNPM - Departamento
Nacional de Produção Mineral, and expires in 2010.
Option
Agreement
The São
João option agreement allows us to perform geological surveys and assessment
work necessary to ascertain the existence of possible mineral deposits which may
be economically mined and to earn a 100% interest in the São João property
mineral rights via structured cash payments.
The total
option agreement payments for the license are structured as
follows:
April
12, 2006
|
US$20,000
(paid);
|
September
12, 2006
|
US$25,000
(paid);
|
September
12, 2007
|
US$60,000
(paid);
|
September
12, 2008
|
US$80,000
(paid by Samba Minerals as part of farm in
agreement)
|
September
12, 2009
|
US$1,250,000
(paid by Samba Minerals as part of farm in
agreement)
|
Total
|
US
$1,435,000.
|
The
vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of US $1,000,000. The option agreement
can be terminated at any time upon written notice to the vendor and we will be
free of any and all payment commitments yet to be due.
Geology
The prime
targets for the São João property are located around and on the intersection of
regional NW and NNW faults within the Pararui Intrusive Suite and this area has
been the focus of large-scale alluvial workings. The Pararui
Intrusive Suite has proven to host the vast majority of gold deposits elsewhere
within the Tapajos Gold Province. We conducted a rock chip program over an area
currently being excavated for gold in quartz systems via shallow underground
workings. The sample results have demonstrated that the quartz vein
systems are highly mineralized and considered continuous for at least
200m. We are confident that the quartz vein systems are much more
extensive and are currently planning to increase the sample density of rock and
soil sampling over, and adjacent to, the current workings to locate further
mineralized vein systems, and to drill test their depth extensions in the near
future.
Previous
mining activity over a number of years focused on the alluvial deposits within
its many tributaries, and has now progressed to include the saprolite host rock
and out cropping quartz veins.
A total
of 19 kilometres of grid line geophysics was undertaken to define structural
trends coincidental with anomalous rock chip geochemistry returned to date. The
full grid was covered with both Gradient Array and Magnetic geophysics to allow
better definition of the continuity between known points of gold anomalism. It
is anticipated that a further, but limited Dipole-Dipole geophysical program
will assist with better definition of the most anomalous areas.
A review
of the Gradient Array and Ground Magnetic geophysics program and the follow-up
Dipole-Dipole geophysical program on selected anomalous lines have identified
several anomalous zones which now require drill testing.
The IP
mapping in the southwestern grid area has uncovered several chargeability
anomalies, see below. Generally they form a NE-SW running trend.
Within the trend various, approximately parallel running veins may occur which
have been dislocated along NW-SE orientated, sinistral faults. Dextral movements
along two major NE-SW running faults would also be able to create a sigmoidal
dilatation zone providing vaious pathways for mineralized fluids.
The map
below shows the approximate position of the main vein trench and another larger
vein which was worked further NW. A distinct chargeability anomaly was found
along the northwestern side of the main vein trench – possibly caused by a
tabular vein body dipping towards NW. Increased Sulphide contents in deeper
levels of the main vein were confirmed by a sample containing far more than 50%
Pyrite which was taken out of a ca. 22 m deep shaft
The vein
worked NW of the main vein is reported to be up to 60 cm wide as well but a
lower Sulphide content and/or more intensive silicification may deplete the IP
anomaly.
Chargeability
anomalies in association with known vein occurrences and recommended intervals
for IP Imaging.
Comandante
Araras - Samba Minerals farm in agreement
In May
2008 the Company signed an agreement with Samba, which was subsequently amended
in August 2008, whereby Samba can earn up to an 80% participating interest in
the Commandante Araras projects by funding exploration expenditures to
completion of a feasibility study on the property. Upon completion of a
feasibility study, the Company will immediately transfer an 80% participation
interest to Samba and enter into a formal joint venture agreement to govern the
development and production of minerals from the property. Samba can terminate
its participation by providing the Company 30 days notice in writing. Upon
withdrawal from its participation, Samba would forfeit to the Company all of its
rights in relation to the project and would be free of any and all payment
commitments yet to be due. Samba will be the manager of the Commandante Araras
project. A feasibility study has not been completed as of September 30, 2009 and
thus no joint venture has been formed as of that date.
Location
and access
The
Comandante Araras property is located in the central portion of the Southern
Tapajos basin and is accessed by light aircraft from the regional centre of
Itaituba. The project adjoins the Sao Joao project to the south
east. Access is also possible by unsealed roads linking up to the
Transgarimpeiro highway and by a purpose cut heavy vehicle access track linking
Sao Joao to the exploration centre at the primary project at Sao
Domingos.
Tenure
The
project covers an area of 2.750 hectares and was granted in 1993 as exploration
license number 853.785/1993 to 853.839/1993 by the Brazilian National department
of Mineral Production DNPM - Departamento Nacional de Produção Mineral, and
expires in 2012.
Memorandum
of Understanding
The
Comandante Araras MOU provided us with a 60 day review period to access the gold
potential of the property. If we decided to proceed with acquiring a 100 percent
interest in the title to the mineral rights then we would have given notice to
the vendors of our intention to acquire title to the mineral rights at least
five days prior to the expiration of the aforementioned period. We would then
have entered into an option agreement with the property vendors for the
assignment and transfer of the mineral rights.
Option
Agreement
The
Comandante Araras option agreement allows us to perform geological surveys and
assessment work necessary to ascertain the existence of possible mineral
deposits which may be economically mined and to earn a 100% interest in the
Comandante Araras property mineral rights via structured cash
payments.
The total
agreement payments for the license are structured as follows:
Option
payments
November
1, 2006
|
R$
20,000 (paid) (approximately USD $11,532 at
12/31/2009);
|
November
15, 2006
|
R$
40,000 (paid) (approximately USD $23,064 at
12/31/2009);
|
December
15, 2006
|
R$
40,000 (paid) (approximately USD $23,064 at
12/31/2009);
|
May
18, 2007
|
R$
15,000 (paid) (approximately USD $8,649 at
12/31/2009);
|
May
29, 2007
|
R$
50,000 (paid) (approximately USD $28,830 at
12/31/2009);
|
July
15, 2008
|
US
$60,000 (paid by Samba Minerals as part of farm in
agreement)
|
July
15, 2009
|
US
$70,000 (paid by Samba Minerals as part of farm in
agreement)
|
July
15, 2010
|
US
$500,000
|
TOTAL
|
R$165,000
and US $630,000
|
The
vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of US $1,000,000. The option agreement
can be terminated at any time upon written notice to the vendor and we will be
free of any and all payment commitments yet to be due.
Geology
The
geology of the Comandante Araras property is dominated by two regional faults in
the Parauari granite that strike North west in the northern half of the property
and South east in the southern part of the property. The project was
selected based on the potential trends of mineralization striking towards Comm
Araras from the Sao Joao project. Exploration will focus on trend
noted on Sao Joao during the 2008 exploration season.
British Columbia,
Canada
Kumealon
Location
and access in British Columbia, Canada
In
February 1999, we acquired, by staking, a high grade limestone property three
(3) square kilometres (741 acres) located on the north shore of Kumealon Inlet,
54 kilometres south-southeast of Prince Rupert, British Columbia,
Canada.
This
property is highlighted by consistence of purity and whiteness of the limestone
zone outcropping along the southwest shore of Kumealon Lagoon. The zone is
comprised mostly of white, recrystallized, fine to course grained limestone,
striking 150 degrees and can be traced for at least 1200 meters. The zone is
estimated to have an average stratigraphic thickness of 180 meters. Chip samples
taken across the zone averaged 55.06% CaO, 2.11% insolubles and 43.51% ignition
loss. This property has no known reserves.
We have
conducted only preliminary exploration activities on these properties. None of
the foregoing properties contain any known reserves.
Boulder
Colorado, USA
The
Front Range Gold JV property
Tenure
and Geology
The Front
Range Gold JV property is located about 16 km west of the city of Boulder
Colorado, USA, and consists of 85 patented and 21 unpatented lode claims,
totaling approximately 480 acres (about 3/4 square mile). The property lies in
the Gold Hill Mining District of Boulder County, and includes eighteen past
producing mines. These mines produced gold, silver, and gold-tellurides from
narrow quartz veins hosted in Precambrian granites and
gneisses.
DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS
AND
CONTROL PERSONS
The
following table and text set forth the names and ages of all directors and
executive officers of our company as of January 31, 2010. All of the directors
will serve until the next annual meeting of stockholders and until their
successors are elected and qualified, or until their earlier death, retirement,
resignation or removal. There are no family relationships between or among the
directors, executive officers or persons nominated or charged by our company to
become directors or executive officers. Executive officers serve at the
discretion of the Board of Directors, and are appointed to serve by the Board of
Directors. Also provided herein are brief descriptions of the business
experience of each director and executive officer during the past five years and
an indication of directorships held by each director in other companies subject
to the reporting requirements under the Federal securities laws.
|
Name and
Address
|
Age and
Position
|
|
Michael
E Montgomery
|
Age
44, Director since April 27, 2007.
|
100 Lewis
Street
Lamington,
Western
Australia, 6430 Australia
|
Lars
M. Pearl
|
Age
48, President, CEO and Director since April 27,
2007.
|
Hofnerstrasse
13
6314
Unterageri, Switzerland
The
following is a description of the employment history for each of our directors
and officers for the last five years:
Michael Montgomery, 44, has
been the Senior Geologist with Kalgoorlie Consolidated Gold Mines from February
2006 to present; he served as the Senior Mine Geologist with Gold Fields
Australia Ltd. from July 2004 to February 2006; he was a contract Senior
Geologist with Haoma Mining (April to July 2004); he was a senior Mine Geologist
with Mount Gibson Mining (October 2003 to April 2004); he was a senior Mine
Geologist with Consolidated Minerals (May 2001 to October 2004). Mr. Montgomery
was a geological consultant to various resource companies from 1989 to
2001. Mr. Montgomery was appointed to the Board on April 27, 2007 in
order to fill the vacancy created by the resignation of Antonino Cacace as a
director.
Lars Pearl, 48, President,
Director and Chief Executive Officer of Cigma Metals Corporation (2004 to 2008);
Mr. Pearl has been self employed as a geological consultant from 1993 to
2004. Mr. Pearl has spent over 10 years as a geological consultant to
projects in Australia, Tanzania, Russia, Kazakhstan, Peru, Colombia and
Ecuador. During the last 5 years Mr. Pearl was acting as a consultant
geologist to various companies, including Aurora Gold Corporation in Australia,
Brazil and Tanzania before joining the board of Aurora Gold Corporation in April
2007.
There are
no family relationships between any of the directors or executive officers. No
director or executive officer has been involved in legal proceedings during the
past five years that are material to an evaluation of the ability or integrity
of any director or executive officer.
During
the past five years none of our directors, executive officers, promoters or
control persons has been:
|
(a)
|
the
subject of any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer either at the
time of the bankruptcy or within two years prior to that
time;
|
|
(b)
|
convicted
in a criminal proceeding or is subject to a pending criminal proceeding
(excluding traffic violations and other minor
offenses);
|
|
(c)
|
subject
to any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining, barring, suspending or otherwise limiting his
involvement in any type of business, securities or banking activities;
or
|
|
(d)
|
found
by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal or
state securities or commodities
law.
|
Directors
Our Board
of directors consists of two members. Directors serve for a term of one year and
stand for election at our annual meeting of stockholders. Pursuant to our
Bylaws, any vacancy occurring in the Board of directors, including a vacancy
created by an increase in the number of directors, may be filled by the
stockholders or by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of directors. A director elected to fill
a vacancy shall hold office only until the next election of directors by the
stockholders. If there are no remaining directors, the vacancy shall be filled
by the stockholders.
At a
meeting of stockholders, any director or the entire Board of directors may be
removed, with or without cause, provided the notice of the meeting states that
one of the purposes of the meeting is the removal of the director. A director
may be removed only if the number of votes cast to remove him exceeds the number
of votes cast against removal.
Committees
Our
entire board of directors acted as our Executive, Audit, Compensation and
Benefits and Nominating and Corporate Governance Committees.
Compensation
of Directors
Name
|
2009
|
2008
|
2007
|
|||||||||
Michael
Montgomery
|
0 | 0 | $ | 30,582 |
During
the nine months ended September 30, 2009 and the fiscal year 2008 we paid no
fees (2007-$30,582) to non employee directors of the Company The transactions
were recorded at the exchange amount, being the value established and agreed to
by the related parties.
Standard
Arrangements
We do not
pay a fee to our outside, non-officer directors. We reimburse our directors for
reasonable expenses incurred by them in attending meetings of the Board of
Directors. During the nine months ended September 30, 2009 and years ended
December 31, 2008 and 2007, we paid non-officer directors $0, $0 and $30,582,
respectively, in consulting fees.
Corporate
Governance Principles / Code of Ethics
Effective
in 2004, our Company's board of directors adopted Corporate Governance
Principles / Code of Business Conduct and Ethics that applies to, among other
persons, all Officers, Directors, Employees and consultants of the company and
its affiliates
Our Code
of Business Conduct and Ethics requires, among other things, that all of our
company's Senior Officers commit to timely, accurate and consistent disclosure
of information; that they maintain confidential information; and that they act
with honesty and integrity.
Executive Compensation
The
following table sets forth information concerning the compensation of the named
executive officers for each of the registrant's last two completed fiscal
years:
Annual
Compensation
|
Long-Term
Compensation
|
|||||||
Awards
|
Payments
|
|||||||
Name
And
Principal
Position
(a)
|
Year
(b)
|
Salary
($)
(c)
|
Bonuses
($)
(d)
|
Other
Annual
Compen-
sation
($)
(e)
|
Restricted
Stock
Award(s)
($)
(f)
|
Securities
Under-
Lying
Options/
SARs
(#)
(g)
|
LTIP
Payouts
($)
(h)
|
All
other
Compen-
sation
($)
(i)
|
Lars
M. Pearl (1)
|
2008
|
-0-
|
-0-
|
75,108
|
None
|
None
|
None
|
-0-
|
President,
CEO and
|
2007
|
-0-
|
-0-
|
80,650
|
None
|
1,000,000
|
None
|
-0-
|
Director
|
2006
|
-0-
|
-0-
|
-0-
|
None
|
None
|
None
|
-0-
|
Klaus
P. Eckhof (1)
|
2008
|
-0-
|
-0-
|
-0-
|
None
|
None
|
None
|
-0-
|
President,
CEO and
|
2007
|
-0-
|
-0-
|
13,160
|
None
|
None
|
None
|
-0-
|
Director
|
2006
|
-0-
|
-0-
|
22,937
|
None
|
None
|
None
|
-0-
|
Hans
Biener
|
2008
|
-0-
|
-0-
|
38,707
|
None
|
None
|
None
|
-0-
|
Director
of
|
2007
|
-0-
|
-0-
|
86,810
|
None
|
500,000
|
None
|
-0-
|
Subsidiary
|
2006
|
-0-
|
-0-
|
31,586
|
None
|
None
|
None
|
-0-
|
Cameron
Richardson (2)
|
2008
|
-0-
|
-0-
|
20,742
|
None
|
None
|
None
|
-0-
|
Secretary,
CFO and
|
2007
|
-0-
|
-0-
|
25,449
|
None
|
200,000
|
None
|
-0-
|
Director
|
2006
|
-0-
|
-0-
|
13,065
|
None
|
None
|
None
|
-0-
|
|
(1)
|
Klaus
Eckhof resigned as President, CEO and Director on April 27, 2007. Lars
Pearl became President, CEO and a Director on April 27,
2007.
|
|
(2)
|
Cameron
Richardson resigned as CFO, Secretary and Director on August 29,
2008.
|
None of
our officers or directors is a party to an employment agreement with
us.
Options/SAR
Grants Table
We
awarded no stock purchase options, or any other rights, to any of our directors
or officers during the years ended December 31, 2009 and 2008.
On August
6, 2007, we awarded 2,300,000 stock purchase options to directors, officers and
employees with an exercise price of $0.26 per share. The term of these options
is five years. The options are exercisable at any time from the grant date up to
and including the 6th day
of August 2012. The stock purchase options are fully vested on the date of
grant.
A summary
of the options granted is as follows:
Optionee
|
Number
of Shares
Subject
to Option
|
Exercise
Price
|
Expiry
Date
|
Thomas
Bartel
|
100,000
|
$0.26
per share
|
August
6, 2012
|
Hans
W. Biener
|
500,000
|
$0.26
per share
|
August
6, 2012
|
Michael
Montgomery
|
500,000
|
$0.26
per share
|
August
6, 2012
|
Lars
Pearl
|
1,000,000
|
$0.26
per share
|
August
6, 2012
|
Cameron
Richardson
|
200,000
|
$0.26
per share
|
August
6, 2012
|
Total:
|
2,300,000
|
Aggregated
Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table
At
December 31, 2007 and 2008 and January 31, 2010 we had 2,300,000 stock purchase
options outstanding.
At no
time during the last completed fiscal year did we, while a reporting company
pursuant to Section 13(a) of 15(d) of the Exchange Act, adjust or amend the
exercise price of the stock options or SARs previously awarded to any of the
named executive officers, whether through amendment, cancellation or replacement
grants, or any other means.
Long-Term
Incentive Plans
There are
no arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers, except that our directors and
executive officers may receive stock options at the discretion of our board of
directors. We do not have any material bonus or profit sharing plans
pursuant to which cash or non-cash compensation is or may be paid to our
directors or executive officers, except that stock options may be granted at the
discretion of our board of directors.
We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control, where
the value of such compensation exceeds $60,000 per executive
officer.
Compensation
of Directors
We
reimburse our directors for reasonable travel and other out-of-pocket expenses
incurred in connection with attendance at meetings of our board of directors.
Our board of directors may award special remuneration to any director
undertaking any special services on our behalf other than services ordinarily
required of a director. No director received and/or accrued any
compensation for their services as a director, including committee participation
and/or special assignments, or incurred in connection with attending board
meetings in the years ended December 31, 2009 and 2008.
Employment
Contracts
During
the fiscal year 2008, consulting fees of $134,558 (2007 - $236,651) were paid to
directors of the Company and its subsidiary for their services as officers of
the Company. The transactions were recorded at the exchange amount, being the
value established and agreed to by the related parties.
There are
no arrangements or plans in which we provide pension, retirement or similar
benefits for directors or executive officers. Our directors and executive
officers may receive stock options at the discretion of our board of directors.
We do not have any material bonus or profit sharing plans pursuant to
which cash or non-cash compensation is or may be paid to our directors or
executive officers, except that stock options may be granted at the discretion
of our board of directors.
We have
no plans or arrangements in respect of remuneration received or that may be
received by our executive officers to compensate such officers in the event of
termination of employment (as a result of resignation, retirement, change of
control) or a change of responsibilities following a change of control, where
the value of such compensation exceeds $60,000 per executive
officer.
Security Ownership Of Certain Beneficial Owners And
Management
The
following table sets forth certain information regarding the beneficial
ownership of our common stock as of January 31, 2010 by (i) each person who is
known by us to own beneficially more than five percent (5%) of our outstanding
common stock; (ii) each of the our directors and officers; and (iii) all of our
directors and officers as a group. As at January 31, 2010,
68,408,522 shares of
our common stock were issued and outstanding.
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Owner
|
Percentage
of Class
|
||||||
Officers
and Directors
|
||||||||
Michael
E Montgomery
100
Lewis Street
Lamington,
Western Australia, 6430 Australia
|
500,000 | (1) | * | |||||
Lars
M. Pearl
Hofnerstrasse
13
6314
Unterageri, Switzerland
|
2,688,533 | (2) | 3.9 | % | ||||
Officers
and directors (2 persons)
|
3,188,533 | 4.7 | % |
|
(1)
|
Includes
500,000 stock purchase options awarded on August 6, 2007. The stock
purchase options are exercisable at $0.26 per share and have a term of
five years. The options are exercisable at any time from the grant date up
to and including the 6th
day of August 2012.
|
|
(2)
|
Includes
1,000,000 stock purchase options awarded on August 6, 2007. The stock
purchase options are exercisable at $0.26 per share and have a term of
five years. The options are exercisable at any time from the grant date up
to and including the 6th
day of August 2012.
|
*
|
less
than 1%
|
Changes
in Control
There
were no arrangements during the last completed fiscal year or subsequent period
to January 18, 2010 which would result in a change in control. We do not believe
that the offer and sale by us of an aggregate of 13,190,000 shares between
January 1, 2007 and January 18, 2010 have resulted in a change of
control.
No
securities were authorized for issuance under equity compensation
plans.
TRANSACTIONS WITH RELATED PERSONS, PROMOTERS
AND
CERTAIN CONTROL PERSONS
Certain
Relationships
Our
proposed business raises potential conflicts of interests between certain of our
officers and directors and us. Certain of our directors are directors of other
mineral resource companies and, to the extent that such other companies may
participate in ventures in which we may participate, our directors may have a
conflict of interest in negotiating and concluding terms regarding the extent of
such participation. In the event that such a conflict of interest
arises at a meeting of our directors, a director who has such a conflict will
abstain from voting for or against the approval of such participation or such
terms. In appropriate cases, we will establish a special committee of
independent directors to review a matter in which several directors, or
management, may have a conflict. From time to time, several companies
may participate in the acquisition, exploration and development of natural
resource properties thereby allowing for their participation in larger programs,
involvement in a greater number of programs and reduction of the financial
exposure with respect to any one program. It may also occur that a
particular company will assign all or a portion of its interest in a particular
program to another of these companies due to the financial position of the
company making the assignment.
In
determining whether we will participate in a particular program and the interest
therein to be acquired by it, the directors will primarily consider the
potential benefits to us, the degree of risk to which we may be exposed and its
financial position at that time. Other than as indicated, we have no
other procedures or mechanisms to deal with conflicts of interest. We
are not aware of the existence of any conflict of interest as described
herein.
Director
Independence
Our Company has two members
on its board of directors. We consider a director to be “independent” if
that person serves only as a member of our board of directors and is not
otherwise employed by our company as an employee, officer or consultant.
Mr. Lars Pearl serves as our company’s President, Chief Executive Officer
and Chief Financial Officer. Mr. Michael Montgomery is considered the
independent director.
Transactions
with Related Persons
Other
than as disclosed below, during the fiscal years ended December 31, 2009 and
2008, none of our current directors, officers or principal shareholders, nor any
family member of the foregoing, nor, to the best of our information and belief,
any of our former directors, senior officers or principal shareholders, nor any
family member of such former directors, officers or principal shareholders, has
or had any material interest, direct or indirect, in any transaction, or in any
proposed transaction which has materially affected or will materially affect
us.
There
have been no transactions or proposed transactions with officers and directors
during the last two years to which we are a party except as
follows:
In
December 2008, 1,488,533 common shares were issued at $0.06 per share to settle
debts of $14,204 and pay $75,108 in consulting fees. The shares were
issued to Lars Pearl, a director who resides outside the United States of
America (in accordance with the exemption from registration requirements
afforded by Regulation S as promulgated thereunder).
In June
2008, 250,000 common shares were issued at $0.10 per share in payment of a
finder’s fee. The shares were issued to Hans Biener, a director of the
subsidiary who resides outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
During
the nine months ended September 30, 2009, consulting fees of $93,576 (2008 -
$124,470) were paid to directors of the Company and its subsidiary. During the
fiscal year 2008, consulting fees of $134,558 were paid to directors of the
Company and its subsidiary. The transactions were recorded at the exchange
amount, being the value established and agreed to by the related
parties
Corporate
Governance
The Board
of Directors has determined that to be considered independent, an outside
director may not have a direct or indirect material relationship with the
Company. A material relationship is one which impairs or inhibits --or has the
potential to impair or inhibit--a director's exercise of critical and
disinterested judgment on behalf of the Company and its stockholders. In
determining whether a material relationship exists, the Board consults with the
Company's counsel to ensure that the Board's determinations are consistent with
all relevant securities and other laws, recent relevant cases and regulations
regarding the definition of "independent director," including those set forth in
NASDAQ Marketplace Rule 4200(a)(15)as in effect from time to time. Consistent
with these considerations, the Board affirmatively has determined that as of
December 31, 2009 only Michael Montgomery is an independent
director.
Selling Stockholders
The
following table presents information regarding the Selling Stockholders. The
Selling Stockholders may sell up to 12,451,467 shares of our common stock. The
percentage of outstanding shares beneficially owned is based on 68,408,522
shares of common stock issued and outstanding at January 31, 2010 (December 31,
2009 – 66,491,855). Information with respect to beneficial ownership is based
upon information provided to us by the Selling Stockholders. Except as may be
otherwise described below, to the best of our knowledge, the named Selling
Shareholder beneficially owns and has sole voting and investment authority as to
all of the shares set forth opposite his name, none of the Selling Stockholders
is known to us to be a registered broker-dealer or an affiliate of a registered
broker-dealer. Each of the selling stockholders has acquired his, her or its
shares solely for investment and not with a view to or for resale or
distribution of such securities.
Selling
Stockholders
|
No.
of Shares
Beneficially
Owned
Prior
to
the
Offering
|
Percentage
of
Issued
and
Outstanding
Shares
Owned
Prior
to the
Offering
|
Number
of
Shares
Registered
and
to
be
Sold
in This
Offering
|
Percentage
of
Issued
and
Outstanding
Shares
Prior
to the
Offering
|
No.
of Shares
Beneficially
Owned
After
This
Offering
|
Percentage
of
Issued
and
Outstanding
Shares
Owned
After
This
Offering
|
Axino
AG (1)
|
100,000
|
0.1%
|
100,000
|
0%
|
100,000
|
0%
|
Königstraße
26
|
||||||
70173,
Stuttgart, Germany
|
||||||
Biener,
Annette Lobato Oliveria
|
125,000
|
0.2%
|
125,000
|
0%
|
125,000
|
0%
|
Karolinenplatz
5a,
|
||||||
80333
Munchen, Germany
|
||||||
Biener,
Hans W.
|
375,000
|
0.5%
|
375,000
|
0%
|
375,000
|
0%
|
Karolinenplatz
5a,
|
||||||
80333
Munchen, Germany
|
||||||
Borgo,
Oliver
|
100,000
|
0.1%
|
100,000
|
0%
|
100,000
|
0%
|
Huzlenstrasse
69
|
||||||
8604,
Volketswil,
|
||||||
Switzerland
|
||||||
Eckhof,
Klaus
|
1,320,000
|
1.9%
|
1,320,000
|
0%
|
1,320,000
|
0%
|
4
Avenue des Guelfes
|
||||||
98000,
Monaco
|
||||||
Geimeinhardt
GMBH (2)
|
250,000
|
0.4%
|
250,000
|
0%
|
250,000
|
0%
|
Alte
Herrenberge Str. 27
|
||||||
71149
Bondorf, Germany
|
||||||
Gomez
de Segura, Agustin
|
2,166,667
|
3.2%
|
2,166,667
|
0%
|
2,166,667
|
0%
|
2nd
Tverskaya-Yamskaya 54,
|
||||||
apt
168,
|
||||||
Moscow,
Russia
|
Heroe
Investments Inc (3)
|
500,000
|
0.7%
|
500,000
|
0%
|
500,000
|
0%
|
Rosenweg
1,
|
||||||
D-69181
Leimen, St. IIgen
|
||||||
Jolanda
Investments Limited (4)
|
264,800
|
0.4%
|
264,800
|
0%
|
264,800
|
0%
|
c/o:
FCI 1st
Floor,
|
||||||
Baarerstrasse
10
|
||||||
6300
Zug, Switzerland
|
||||||
Liniger,
Ernst
|
100,000
|
0.1%
|
100,000
|
0%
|
100,000
|
0%
|
Elchweg
23
|
||||||
8405,
Wintevthur,
|
||||||
Switzerland
|
||||||
Meier,
Simon
|
500,000
|
0.7%
|
500,000
|
0%
|
500,000
|
0%
|
Krankenhausweg
8
|
||||||
3110,
Muensingem,
|
||||||
Switzerland
|
||||||
Mulhaupt,
Roger
|
300,000
|
0.4%
|
300,000
|
0%
|
300,000
|
0%
|
Hauptstrasse
37
|
||||||
8280,
Kreuzlingen,
|
||||||
Switzerland
|
||||||
OPM
Investments (5)
|
1,000,000
|
1.5%
|
1,000,000
|
0%
|
1,000,000
|
0%
|
Hof
Himmelrich 3
|
||||||
6340,
Barr, Switzerland
|
||||||
Samba
Minerals Limited (6)
|
5,000,000
|
7.33%
|
5,000,000
|
0%
|
5,000,000
|
0%
|
30
Ledgar Road,
|
||||||
Balcatta,
WA, 6021
|
||||||
Australia
|
||||||
Schaeppi,
Renato
|
100,000
|
0.1%
|
100,000
|
0%
|
100,000
|
0%
|
Pfannenshilstrasse
14
|
||||||
8835
Feusisberg,
|
||||||
Switzerland
|
||||||
WS
Marketing GMBH (7)
|
250,000
|
0.4%
|
250,000
|
0%
|
250,000
|
0%
|
Schömbergstr,
23/3
|
||||||
72793
Pfullingen, Germany
|
||||||
Total
number of shares included
|
12,451,467
|
|
1.
|
Wolfgang Seybold, Koenigstrasse
26, 70173 Stuttgart, Germany is the controlling principal of Axino
AG and, in such capacity, may be deemed to have voting and
dispositive power over the securities held for the account of this selling
stockholder.
|
|
2.
|
Robert Geimeinhardt, Alte
Herrenberge Str. 27, 71149 Bondorf, Germany is the controlling principal
of Geimeinhardt GMBH and, in such capacity, may be deemed to have
voting and dispositive power over the securities held for the account of
this selling stockholder.
|
|
3.
|
Boyan
Pravica, Rosenweg 1, D-69181 Leimen, St Ilgen is the controlling principal
of Heroe investments Inc.
|
|
4.
|
Richard Lake 1st Floor, Baarestrasse 10, 6300,
Zug, Switzerland is the controlling principal of Jolanda Investments
Limited and, in such capacity, may be deemed to have voting and
dispositive power over the securities held for the account of this selling
stockholder.
|
|
5.
|
Victor
Dario, Hoffhimmelrich 3, 6340, Baar, Switzerland is the controlling
principal of OPM Investments and, in such capacity, may be
deemed to have voting and dispositive power over the securities held for
the account of this selling
stockholder.
|
|
6.
|
Samba
Minerals Limited, 30 Ledgar Road, Balcatta, 6021, Western Australia is an
unlisted Australian Public Company, of which Nigel Furguson is
the Chief Executive Officer and, in such capacity, may be
deemed to have voting and dispositive power over the securities held for
the account of this selling
stockholder
|
|
7.
|
Sabine Werner, Schömbergstr,
23/3, 72793 Pfullingen, Germany is the controlling principal of WS
Marketing GMBH and, in such capacity, may be deemed to have voting
and dispositive power over the securities held for the account of this
selling stockholder.
|
Under
Rule 13d-3, a beneficial owner of a security includes any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship,
or otherwise has or shares: (i) voting power, which includes the power to vote,
or to direct the voting of shares; and (ii) investment power, which includes the
power to dispose or direct the disposition of shares. Certain shares may be
deemed to be beneficially owned by more than one person (if, for example,
persons share the power to vote or the power to dispose of the shares). In
addition, shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an option)
within 60 days of the date as of which the information is provided. In computing
the percentage ownership of any person, the amount of shares outstanding is
deemed to include the amount of shares beneficially owned by such person (and
only such person) by reason of these acquisition rights. As a result, the
percentage of outstanding shares of any person as shown in this table does not
necessarily reflect the person's actual ownership or voting power with respect
to the number of shares of common stock actually outstanding on January 31,
2010.
The
shares being offered by the Selling Stockholders were acquired by them either
pursuant to debt settlement agreements or in connection with the Private
Placements.
Because a
Selling Stockholder may offer by this Prospectus all or some part of the common
shares which it holds, no estimate can be given as of the date hereof as to the
number of common shares actually to be offered for sale by a Selling Stockholder
or as to the number of common shares that will be held by a Selling Stockholder
upon the termination of such offering.
PLAN OF DISTRIBUTION
Each
Selling Stockholder of the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on the Pink Sheets or any other stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. A Selling Stockholder may use
any one or more of the following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this Prospectus is a
part;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
·
|
a
combination of any such methods of sale;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, as amended, if available, rather than under this Prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with
FINRA NASD Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with NASD IM-2440.
In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this Prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
Prospectus (as supplemented or amended to reflect such
transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed us
that it does not have any written or oral agreement or understanding, directly
or indirectly, with any person to distribute the Common Stock.
We are
required to pay certain fees and expenses incurred by us incident to the
registration of the shares. We have agreed to indemnify the Selling Stockholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the Prospectus delivery requirements
of the Securities Act including Rule 172 as promulgated thereunder. In addition,
any securities covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under
this Prospectus. There is no underwriter or coordinating broker acting in
connection with the proposed sale of the resale shares by the Selling
Stockholders.
We agreed
to keep this Prospectus effective until the earlier of (i) two years from the
date that the registration statement of which this Prospectus is part is
declared effective (ii) the date on which the shares may be resold by
the Selling Stockholders without registration and without regard to any volume
limitations by reason of Rule 144 under the Securities Act or any other rule of
similar effect or (iii) all of the shares have been sold pursuant to this
Prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this Prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
Prospectus to each purchaser at or prior to the time of the sale (including by
compliance with Rule 172 under the Securities Act).
We cannot
estimate the number of shares, if any, which will be sold by the Selling
Stockholders pursuant to this Prospectus.
DESCRIPTION OF OUR SECURITIES
Our
authorized capital stock consists of 100,000,000 shares of common stock, par
value $.001 per share. As of January 31, 2010 we had 68,408,522 shares of common
stock outstanding.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held on all matters
submitted to a vote of stockholders and do not have cumulative voting rights.
Accordingly, holders of a majority of the shares of our common stock entitled to
vote in any election of directors may elect all of the directors standing for
election. Holders of our common stock are entitled to receive dividends ratably,
if any, as may be declared from time to time by our board of directors out of
funds legally available therefore. Upon our liquidation, dissolution or winding
up, the holders of our common stock are entitled to receive ratably, our net
assets available after the payment of all liabilities.
Holders
of our common stock have no preemptive, subscription, redemption or conversion
rights, and there are no redemption or sinking fund provisions applicable to the
common stock. The outstanding shares of our common stock are, and the shares
offered in this offering will be, when issued and paid for, duly authorized,
validly issued, fully paid and nonassessable.
Dividends
We have
not declared any cash dividends to date. We have no present intention of paying
any cash dividends on our common stock in the foreseeable future, as we intend
to use earnings, if any, to generate growth. The payment of dividends, if any,
in the future, rests within the discretion of our Board of Directors and will
depend, among other things, upon our earnings, capital requirements and our
financial condition, as well as other relevant factors. There are no
restrictions in our Certificate of Incorporation or By-laws that restrict us
from declaring dividends.
Shares
Eligible For Future Sale
Future
sales of a substantial number of shares of our common stock in the public market
could adversely affect market prices prevailing from time to time. Under the
terms of this offering, the shares of common stock offered may be resold without
restriction or further registration under the Securities Act of 1933, except
that any shares purchased by our “affiliates,” as that term is defined under the
Securities Act, may generally only be sold in compliance with Rule 144 under the
Securities Act.
Sale
of Restricted Shares
Certain
shares of our outstanding common stock were issued and sold by us in private
transactions in reliance upon exemptions from registration under the Securities
Act and have not been registered for resale. Additional shares may be issued
pursuant to outstanding warrants and options. Such shares may be sold only
pursuant to an effective registration statement filed by us or an applicable
exemption, including the exemption contained in Rule 144 promulgated under the
Securities Act.
On
January 31, 2010 we had outstanding 68,408,522 shares of common stock. Of these
shares, 54,468,522 are freely tradable by persons other than our affiliates,
without restriction under the Securities Act; and 13,940,000 shares are
restricted securities within the meaning of Rule 144 under the Securities Act
and may not be sold unless an exemption from the registration requirements of
the Securities Act is available (including 144).
Rule
144
Pursuant
to Rule 144 as in effect on the date of this Prospectus a person who has
beneficially owned restricted shares of our common stock for at least six months
would be entitled to sell their securities provided that (i) such person is not
deemed to have been one of our affiliates at the time of, or at any time during
the three months preceding, a sale and (ii) we are subject to the Exchange Act
periodic reporting requirements for at least three months before the
sale.
Sales
under Rule 144 by Affiliates
Persons
who have beneficially owned restricted shares of our common stock for at least
six months but who are our affiliates at the time of, or at any time during the
three months preceding, a sale, would be subject to additional restrictions, by
which such person would be entitled to sell within any three-month period only a
number of securities that does not exceed the greater of either of the
following:
|
Ÿ
|
1%
of the number of shares of common stock then outstanding, which equal
586,006 shares as of December 31, 2009; or the average weekly trading
volume of the common stock during the four calendar weeks preceding the
filing of a notice on Form 144 with respect to the sale, provided that the
common stock is listed on a national securities exchange or on The NASDAQ
Stock Market.
|
Sales
under Rule 144 by our affiliates are further limited under Rule 144, including
the provisions thereof relating to the manner of sale, notice requirements and
availability of current public information about us.
Sales
Pursuant to Rule 144 by Non-Affiliates
Under
Rule 144, a person who is not deemed to have been one of our affiliates at the
time of or at any time during the three months preceding a sale, and who has
beneficially owned the restricted ordinary shares proposed to be sold for at
least six (6) months, including the holding period of any prior owner other than
an affiliate, is entitled to sell their ordinary shares without complying with
the manner of sale and volume limitation or notice provisions of Rule 144. We
must be current in our public reporting if the non-affiliate is seeking to sell
under Rule 144 after holding his ordinary shares between 6 months and one year.
After one year, non-affiliates do not have to comply with any other Rule 144
requirements.
Restrictions
on the Use of Rule 144 by Shell Companies or Former Shell Companies
Historically,
the SEC staff has taken the position that Rule 144 is not available for the
resale of securities initially issued by companies that are, or previously were,
blank check companies, to their promoters or affiliates despite technical
compliance with the requirements of Rule 144. The SEC has codified and expanded
this position in the amendments discussed above by prohibiting the use of Rule
144 for resale of securities issued by any shell companies (other than business
combination related shell companies) or any issuer that has been at any time
previously a shell company. The SEC has provided an important exception to this
prohibition, however, if the following conditions are met:
|
Ÿ
|
The
issuer of the securities that was formerly a shell company has ceased to
be a shell company;
|
|
Ÿ
|
The
issuer of the securities is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange
Act;
|
|
Ÿ
|
The
issuer of the securities has filed all Exchange Act reports and material
required to be filed, as applicable, during the preceding 12 months (or
such shorter period that the issuer was required to file such reports and
materials), other than Form 8-K reports;
and
|
|
Ÿ
|
At
least one year has elapsed from the time that the issuer filed current
Form 10 type information with the SEC reflecting its status as an entity
that is not a shell company.
|
As we are
not a shell company, our restricted shares will be able to be resold pursuant to
Rule 144 as described above after we become subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act. In addition, the shares
registered for resale by the Selling Stockholders may be sold without
restriction pursuant to this Prospectus.
LEGAL PROCEEDINGS
Although
we are not party to nor are we aware of any pending lawsuit, litigation or
proceeding, from time to time, we may become involved in various lawsuits and
legal proceedings which arise in the ordinary course of business.
We are
currently not aware of any other legal proceedings or claims that we believe
will have, individually, or in the aggregate, a material adverse affect on our
business, financial condition or operating results.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
We
believe that the indemnification provisions of our Articles of Incorporation and
Bylaws will be useful to attract and retain qualified persons as directors and
officers. Our Articles of Incorporation limit the liability of directors and
officers to the fullest extent permitted by Delaware law. This is intended to
allow our directors and officers the benefit of Nevada's corporation law which
provides that directors and officers of Delaware corporations may be relieved of
monetary liabilities for breach of their fiduciary duties as directors, except
under circumstances which involve acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable.
In the
event that a claim for indemnification against such liabilities (other than our
payment of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
LEGAL MATTERS
The
validity of the shares of common stock offered hereby will be passed upon for
us by Sierchio & Company LLP, 430 Park Avenue, 7 th
Floor, New York, New York 10022.
EXPERTS
Our
consolidated financial statements at December 31, 2008 and 2007 and for the
years then ended, appearing herein have been audited by Peterson Sullivan, LLP,
an independent registered public accounting firm, as set forth in its report
thereon appearing elsewhere herein, and are included in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There
have been no changes in, and we have not had any disagreements with our
accountants with respect to, our accounting and financial disclosure.
ADDITIONAL INFORMATION
We file
current, quarterly and annual reports with the SEC on forms 8-K, 10-Q and 10-K.
Our filings may be inspected and copied at the Public Reference Room maintained
by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can obtain
information about operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC at http://www.sec.gov. Copies of such material
can be obtained from the public reference section of the SEC at prescribed
rates.
For
further information with respect to us and the securities being offered hereby,
reference is hereby made to the registration statement, including the exhibits
thereto and the financial statements, notes, and schedules filed as a part
thereof.
Index to CONSOLIDATED Financial
Statements
Page
|
||
Index to Consolidated Financial Statements –
September 30, 2009 (unaudited)
|
||
Interim
Consolidated Balance Sheets –
September
30, 2009 and December 31, 2008
|
F-1
|
|
Interim
Consolidated Statements of Operations
Three
and Nine-months Ended September 30, 2009 and 2008; and for the period from
October 10, 1995 (inception) to September 30, 2009
|
F-2
|
|
Interim
Consolidated Statements of Cash Flows
Nine-months
Ended September 30, 2009 and 2008; and for the period from October 10,
1995 (inception) to September 30, 2009
|
F-3
|
|
Notes
to Interim Consolidated Financial Statements
|
F-4
|
|
Index to Consolidated Financial Statements –
December 31, 2008 and 2007 (audited)
|
||
Report
of Independent Registered Public Accounting Firm
|
F-8
|
|
Consolidated
Balance Sheets
December
31, 2008 and 2007
|
F-9
|
|
Consolidated
Statements of Operations
Years
Ended December 31, 2008 and 2007 and for the period from October 10, 1995
(inception) to December 31, 2008
|
F-10
|
|
Consolidated
Statements of Stockholders’ Equity (Deficiency) and Comprehensive Income
(Loss) for the period from October 10, 1995 (inception) to December 31,
2008
|
F-11
|
|
Consolidated
Statements of Cash Flows
Years
Ended December 31, 2008 and 2007 and for the period from October 10, 1995
(inception) to December 31, 2008
|
F-15
|
|
Notes
to Consolidated Financial Statements
Years
Ended December 31, 2008 and 2007
|
F-16
|
AURORA
GOLD CORPORATION
(An
exploration stage enterprise)
|
||||||||
Interim
Consolidated Balance Sheets
|
||||||||
September
30, 2009 and December 31, 2008
|
||||||||
(Expressed
in U.S. Dollars)
|
September
30
|
December
31
|
||||||
(Unaudited)
|
2009
|
2008
|
||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 155,046 | $ | 16,511 | ||||
Prepaid expenses and other
assets
|
34,551 | 30,555 | ||||||
Total
current assets
|
189,597 | 47,066 | ||||||
Equipment, net
|
105,763 | 88,973 | ||||||
Total assets
|
$ | 295,360 | $ | 136,039 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 806,086 | $ | 639,066 | ||||
Accounts
payable and accrued expenses - related party
|
66,314 | - | ||||||
Loans payable
|
500,000 | 500,000 | ||||||
Total
current liabilities
|
1,372,400 | 1,139,066 | ||||||
Convertible
notes payable
|
- | 518,025 | ||||||
Accrued interest on convertible notes
payable
|
- | 34,488 | ||||||
Total liabilities
|
1,372,400 | 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:
|
||||||||
63,071,855
(December 31, 2008 - 58,071,855) common shares
|
63,071 | 58,071 | ||||||
Additional
paid-in capital
|
13,859,395 | 12,110,779 | ||||||
Common
stock issuable, 3,420,000 shares
|
300,000 | - | ||||||
Accumulated
deficit during the exploration stage
|
(15,211,213 | ) | (13,691,702 | ) | ||||
Accumulated other comprehensive income
(loss)
|
(88,293 | ) | (32,688 | ) | ||||
Stockholders' equity
(deficiency)
|
(1,077,040 | ) | (1,555,540 | ) | ||||
Total liabilities and stockholders' equity
(deficiency)
|
$ | 295,360 | $ | 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
|
Nine
months
|
Nine
months
|
|||||||||||||||
(Expressed
in U.S. Dollars)
|
1995
(inception)
|
Ended
|
Ended
|
Ended
|
Ended
|
|||||||||||||||
(Unaudited)
|
to
September 30
|
September
30
|
September
30
|
September
30
|
September
30
|
|||||||||||||||
|
2009
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||
Expenses
|
||||||||||||||||||||
Administrative
and general
|
$ | 1,364,235 | $ | 46,318 | $ | 29,766 | $ | 97,885 | $ | 102,677 | ||||||||||
Depreciation
and amortization
|
95,750 | 3,485 | 3,920 | 9,431 | 11,560 | |||||||||||||||
Imputed
interest on loan payable - related party
|
1,560 | - | - | - | - | |||||||||||||||
Interest
and bank charges
|
363,577 | 32,978 | 45,427 | 93,889 | 87,347 | |||||||||||||||
Foreign
exchange loss (gain)loss
|
(24,519 | ) | 60,984 | (69,846 | ) | 147,146 | (67,924 | ) | ||||||||||||
Professional
fees - accounting and legal
|
1,096,804 | 9,014 | 14,286 | 12,486 | 184,343 | |||||||||||||||
Property
search and negotiation
|
225,198 | - | - | - | - | |||||||||||||||
Salaries, management and consulting
fees
|
2,102,655 | 40,323 | 28,493 | 92,647 | 114,586 | |||||||||||||||
|
5,225,260 | 193,102 | 52,046 | 453,484 | 432,589 | |||||||||||||||
Exploration
expenses
|
8,763,002 | 24,981 | 22,494 | 51,562 | 88,199 | |||||||||||||||
Write-off of mineral property
costs
|
172,981 | - | - | - | - | |||||||||||||||
14,161,243 | 218,083 | 74,540 | 505,046 | 520,788 | ||||||||||||||||
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 | ) | - | - | - | - | ||||||||||||||
Loss on debt extinguishment
|
(1,014,465 | ) | (1,014,465 | ) | - | (1,014,465 | ) | - | ||||||||||||
(1,049,970 | ) | (1,014,465 | ) | - | (1,014,465 | ) | - | |||||||||||||
Net (loss) for the period
|
$ | (15,211,213 | ) | $ | (1,232,548 | ) | $ | (74,540 | ) | $ | (1,519,511 | ) | $ | (520,788 | ) | |||||
|
||||||||||||||||||||
Earnings
(loss) per share
|
||||||||||||||||||||
- basic and diluted
|
$ | (0.02 | ) | $ | (0.00 | ) | $ | (0.03 | ) | $ | (0.01 | ) | ||||||||
Weighted
average number of common shares outstanding
|
||||||||||||||||||||
- basic and diluted
|
58,786,141 | 55,392,435 | 58,310,826 | 55,277,130 |
The
accompanying notes are an integral part of these consolidated financial
statements
AURORA
GOLD CORPORATION
|
Cumulative
|
|||||||||||
(An
exploration stage enterprise)
|
October
10
|
Nine
months
|
Nine
months
|
|||||||||
Interim
Consolidated Statements of Cash Flows (Unaudited)
|
1995
(inception)
|
Ended
|
Ended
|
|||||||||
(Expressed
in U.S. Dollars)
|
to
September 30
|
September
30
|
September
30
|
|||||||||
|
2009
|
2009
|
2008
|
|||||||||
Cash
flows from operating activities
|
||||||||||||
Net
loss for the period
|
$ | (15,211,213 | ) | $ | (1,519,511 | ) | $ | (520,788 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
-
depreciation and amortization
|
95,750 | 9,431 | 11,560 | |||||||||
-
stock compensation expense on stock option grants
|
1,174,795 | - | 2,471 | |||||||||
-
expenses satisfied with issuance of common stock
|
748,800 | - | 25,000 | |||||||||
-
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 | - | - | |||||||||
-
loss on investments
|
37,971 | - | - | |||||||||
-
gain on sale of rights to Matupa agreement, net of
expenses
|
(80,237 | ) | - | - | ||||||||
-
loss on debt extinguishment
|
1,014,465 | 1,014,465 | - | |||||||||
-
foreign exchange (gain) loss related to notes
payable
|
51,891 | 221,126 | (71,435 | ) | ||||||||
Changes
in assets and liabilities:
|
||||||||||||
-
(increase) in receivables
|
(206,978 | ) | - | - | ||||||||
-
(increase) decrease in prepaid expenses and other assets
|
(33,866 | ) | 6,265 | (6,151 | ) | |||||||
-
increase (decrease) in accounts payable and
accrued expenses
|
1,285,779 | 97,324 | 107,712 | |||||||||
Net cash used in operating
activities
|
(10,597,901 | ) | (170,900 | ) | (451,631 | ) | ||||||
Cash
flows from investing activities
|
||||||||||||
Purchase
of equipment
|
(187,548 | ) | - | (267 | ) | |||||||
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 | ) | - | (267 | ) | |||||||
Cash
flows from financing activities
|
||||||||||||
Proceeds
from common stock less issuance costs
|
9,881,490 | 1,039,151 | - | |||||||||
Loan
proceeds from related party
|
289,000 | - | - | |||||||||
Net
proceeds from (payments on) convertible notes and loans
|
730,101 | (739,151 | ) | 687,260 | ||||||||
Net proceeds from (payments on) advances payable
-related party
|
- | - | (161,441 | ) | ||||||||
Net cash provided by financing
activities
|
10,900,591 | 300,000 | 525,819 | |||||||||
Effect of exchange rate changes on cash and cash
equivalents
|
174,785 | 9,435 | (9,202 | ) | ||||||||
Increase
in cash and cash equivalents
|
155,046 | 138,535 | 64,719 | |||||||||
Cash, beginning of period
|
- | 16,511 | 3,909 | |||||||||
Cash, end of period
|
$ | 155,046 | $ | 155,046 | $ | 68,628 |
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 $170,900 from operating activities
in 2009 through September 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
|
Comprehensive
income comprises all changes to equity except those resulting from investments
by owners and distributions to owners.
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
Components
of comprehensive income (loss)
|
September 30
2009
$
|
September 30
2008
$
|
September 30
2009
$
|
September 30
2008
$
|
||||||||||||
Net
(loss) for the period
|
(1,232,548 | ) | (74,540 | ) | (1,519,511 | ) | (520,788 | ) | ||||||||
Foreign currency translation
adjustments
|
(24,319 | ) | 38,786 | (55,605 | ) | 1,249 | ||||||||||
Total comprehensive (loss)
|
(1,256,867 | ) | (35,754 | ) | (1,575,116 | ) | (519,539 | ) |
Accumulated
other comprehensive income consists entirely of foreign currency translation
adjustments at September 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 period. Potentially dilutive securities outstanding consist of
2,300,000 stock options for the three and nine months ended September 30, 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 a
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 a
80% participation interest in the relevant property to Samba and enter into a
formal joint venture agreement to govern 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
|
3.
|
Joint
Venture with Samba Minerals Limited
(continued)
|
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
September 30, 2009 and thus no joint venture has been formed as of that
date.
|
4.
|
Equipment
|
September 30, 2009
|
December 31, 2008
|
|||||||
Vehicles
|
$ | 84,250 | $ | 64,265 | ||||
Office
equipment
|
63,187 | 52,459 | ||||||
Furniture and fixtures
|
20,638 | 15,742 | ||||||
168,075 | 132,466 | |||||||
Accumulated depreciation
|
(62,312 | ) | (43,493 | ) | ||||
$ | 105,763 | $ | 88,973 |
The
majority of equipment held at September 30, 2009 and December 31, 2008 is
located in Brazil.
|
5.
|
Notes
and Loans Payable
|
The
Company has two separate loans payable of $250,000 each at September 30, 2009
and December 31, 2008, that bear interest at 6% per annum, are due on demand and
are unsecured.
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. The issuance price of the
shares issued on settlement was lower that the stated conversion price in the
loan agreements of $0.30 per share. Thus, this transaction was considered an
inducement to convert and accounted for as such resulting in a loss
of $1,014,465 being recorded in the three and nine months ended September 2009
related to this settlement.
|
6.
|
Common
Stock
|
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.
|
7.
|
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 nine months ended
September 30, 2009 and the status of stock options outstanding and exercisable
at September 30, 2009:
|
7.
|
Stock
Options (continued)
|
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 September 30,
2009
|
2,300,000 | $ | 0.26 | 2.85 |
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
September 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 September 30, 2009. As the exercise price of all
outstanding options at September 30, 2009 was less than the Company’s closing
stock price at that date, there is intrinsic value of
$322,000.
|
8.
|
Related
Party Transactions
|
Related
party transactions not disclosed elsewhere in these consolidated financial
statements include:
|
a.
|
During
the nine month period ended September 30, 2009, consulting fees of $93,576
(2008 – $124,470) 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 September
30, 2009 is $66,314 (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.
|
|
9.
|
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.
|
10.
|
Subsequent
Events through January 27, 2010 (the date these financial statements were
issued)
|
In
November 2009, the Company signed a letter of 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.
REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders
Aurora
Gold Corporation
We have
audited the accompanying consolidated balance sheets of Aurora Gold Corporation
(an exploration stage company) and Subsidiary ("the Company") as of
December 31, 2008 and 2007, and the related consolidated statements of
operations, stockholders' equity (deficiency) and comprehensive income (loss),
and cash flows for the years then ended, and for the period from October 10,
1995 (date of inception) to December 31, 2008. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. The
Company has determined that it is not required to have, nor were we engaged to
perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Aurora Gold Corporation (an
exploration stage company) and Subsidiary as of December 31, 2008 and 2007,
and the results of their operations and their cash flows for the years then
ended, and for the period from October 10, 1995 (date of inception) to
December 31, 2008, in conformity with accounting principles generally
accepted in the United States.
The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to
the consolidated financial statements, the Company has incurred operating losses
since inception, has not been able to generate any operating revenues to date,
and used cash from operations of $649,028 in 2008. These conditions
raise substantial doubt about the Company's ability to continue as a going
concern. Management's plans regarding those matters are also
described in Note 1. The consolidated financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.
/S/
PETERSON SULLIVAN LLP
December
9, 2009
Seattle,
Washington
AURORA
GOLD CORPORATION
(An
exploration stage enterprise)
|
||||||||
Consolidated
Balance Sheets
|
||||||||
December
31, 2008 and 2007
|
||||||||
(Expressed
in U.S. Dollars)
|
December
31
|
December
31
|
||||||
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
|
$ | 16,511 | $ | 3,909 | ||||
Prepaid expenses and other
assets
|
30,555 | 23,256 | ||||||
Total
current assets
|
47,066 | 27,165 | ||||||
Equipment, net
|
88,973 | 134,543 | ||||||
Total assets
|
$ | 136,039 | $ | 161,708 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIENCY)
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable and accrued expenses
|
$ | 639,066 | $ | 693,233 | ||||
Accounts
payable and accrued expenses - related party
|
- | 59,928 | ||||||
Advances
payable - related party
|
- | 161,441 | ||||||
Loans
payable
|
500,000 | 250,000 | ||||||
Loan payable - related
party
|
- | 250,000 | ||||||
Total
current liabilities
|
1,139,066 | 1,414,602 | ||||||
Convertible
notes payable
|
518,025 | - | ||||||
Accrued interest on convertible notes
payable
|
34,488 | - | ||||||
Total liabilities
|
1,691,579 | 1,414,602 | ||||||
Stockholders'
Equity (Deficiency)
|
||||||||
Common
stock
|
||||||||
Authorized:
|
||||||||
100,000,000
common shares, (December 31, 2007 - 100,000,000) with par value $0.001
each
|
||||||||
Issued
and outstanding:
|
||||||||
58,071,855
(December 31, 2007 - 55,218,522) common shares
|
58,071 | 55,218 | ||||||
Additional
paid-in capital
|
12,110,779 | 11,932,432 | ||||||
Accumulated
deficit during the exploration stage
|
(13,691,702 | ) | (13,171,597 | ) | ||||
Accumulated other comprehensive income
(loss)
|
(32,688 | ) | (68,947 | ) | ||||
Stockholders' equity
(deficiency)
|
(1,555,540 | ) | (1,252,894 | ) | ||||
Total liabilities and stockholders' equity
(deficiency)
|
$ | 136,039 | $ | 161,708 |
The
accompanying notes are an integral part of these consolidated financial
statements
AURORA
GOLD CORPORATION
(An
exploration stage enterprise)
|
||||||||||||
Cumulative
|
||||||||||||
Consolidated
Statements of Operations
|
October
10
|
Year
ended
|
Year
ended
|
|||||||||
(Expressed
in U.S. Dollars)
|
1995
(inception)
to
December 31
2008
|
Ended
December
31
2008
|
Ended
December
31
2007
|
|||||||||
Expenses
|
||||||||||||
Administrative
and general
|
$ | 1,266,350 | $ | 152,309 | $ | 210,193 | ||||||
Depreciation
and amortization
|
86,319 | 14,426 | 12,326 | |||||||||
Imputed
interest on loan payable - related party
|
1,560 | - | - | |||||||||
Interest
and bank charges
|
269,688 | 115,501 | 89,673 | |||||||||
Foreign
exchange (gain)loss
|
(171,665 | ) | (171,902 | ) | 237 | |||||||
Professional
fees - accounting and legal
|
1,084,318 | 136,438 | 233,762 | |||||||||
Property
search and negotiation
|
225,198 | - | - | |||||||||
Salaries, management and consulting
fees
|
2,010,008 | 196,060 | 679,666 | |||||||||
|
4,771,776 | 442,832 | 1,225,857 | |||||||||
Exploration
expenses
|
8,711,440 | 77,273 | 2,033,875 | |||||||||
Write-off of mineral property
costs
|
172,981 | - | - | |||||||||
13,656,197 | 520,105 | 3,259,732 | ||||||||||
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
|
$ | (13,691,702 | ) | $ | (520,105 | ) | $ | (3,259,732 | ) | |||
|
||||||||||||
Earnings
(loss) per share
|
||||||||||||
- basic and diluted
|
$ | (0.01 | ) | $ | (0.07 | ) | ||||||
Weighted
average number of common shares outstanding
|
||||||||||||
- basic and diluted
|
55,325,371 | 49,873,055 |
The
accompanying notes are an integral part of these consolidated financial
statements
(An
exploration stage enterprise)
|
||||||||||||||||||||||||||||||||
Consolidated
Statements of Stockholders' Equity (Deficiency) and Comprehensive Income
(loss)
|
||||||||||||||||||||||||||||||||
October
10, 1995 (inception) to December 31, 2008
|
||||||||||||||||||||||||||||||||
(Expressed
in U.S. dollars)
|
||||||||||||||||||||||||||||||||
Accumulated
|
Accumulated
|
Total
|
||||||||||||||||||||||||||||||
Additional
|
Compre-
|
(deficit)
during
|
Advances
for
|
other
|
stockholders'
|
|||||||||||||||||||||||||||
Common Stock
|
paid-in
|
hensive
|
exploration
|
Stock
|
comprehensive
|
equity
|
||||||||||||||||||||||||||
Shares
|
Amount
|
capital
|
(loss)
|
stage
|
Subscriptions
|
income (loss)
|
(deficiency)
|
|||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||
Balance,
December 31, 1994
|
- | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
11,461,153 | 11,461 | - | - | - | - | 11,461 | |||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total
comprehensive (loss)
|
- | |||||||||||||||||||||||||||||||
Balance
December 31, 1995
|
11,461,153 | 11,461 | - | - | - | - | - | 11,461 | ||||||||||||||||||||||||
Adjustment
for reverse stock split
|
(7,640,766 | ) | (7,641 | ) | - | - | - | - | (7,641 | ) | ||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash at $0.001 per share
|
5,800,000 | 5,800 | 341,761 | - | - | - | 347,561 | |||||||||||||||||||||||||
-
resource property
|
300,000 | 300 | 2,700 | - | - | - | 3,000 | |||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | (361,208 | ) | (361,208 | ) | - | (361,208 | ) | ||||||||||||||||||||||
Total
comprehensive (loss)
|
(361,208 | ) | ||||||||||||||||||||||||||||||
Balance
December 31, 1996
|
9,920,387 | 9,920 | 344,461 | (361,208 | ) | - | - | (6,827 | ) | |||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash in March 1997 at $1.00 per share (less issue costs of
$4,842)
|
750,000 | 750 | 744,408 | - | - | - | - | 745,158 | ||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | 615,880 | (615,880 | ) | - | - | (615,880 | ) | ||||||||||||||||||||||
Total
comprehensive (loss)
|
615,880 | |||||||||||||||||||||||||||||||
Balance
December 31, 1997
|
10,670,387 | 10,670 | 1,088,869 | (977,088 | ) | - | - | 122,451 | ||||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
96,105 | 96 | 68,601 | - | - | - | - | 68,697 | ||||||||||||||||||||||||
-
cash in May 1998 at $1.25 per share
|
200,000 | 200 | 249,800 | - | - | - | - | 250,000 | ||||||||||||||||||||||||
-
cash in November 1998 at $0.75 per share
|
71,667 | 72 | 53,678 | - | - | - | - | 53,750 | ||||||||||||||||||||||||
-
cash in December 1998 at $0.75 per share
|
143,333 | 143 | 107,357 | - | - | - | - | 107,500 |
Grant
of options to employees and directors
|
- | - | 518,900 | - | - | - | - | 518,900 | ||||||||||||||||||||||||
Grant
of options to consultants
|
- | - | 172,100 | - | - | - | - | 172,100 | ||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | (1,151,604 | ) | (1,151,604 | ) | - | - | (1,151,604 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
(1,151,604 | ) | ||||||||||||||||||||||||||||||
Balance
December 31, 1998
|
11,181,492 | 11,182 | 2,259,304 | (2,128,692 | ) | - | - | 141,794 | ||||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
231,286 | 231 | 160,151 | - | - | - | - | 160,382 | ||||||||||||||||||||||||
-
cash in March 1999 at $0.656 per share
|
22,871 | 23 | 14,977 | - | - | - | - | 15,000 | ||||||||||||||||||||||||
-
finder's fee in February 1999 at $0.81 per share
|
25,000 | 25 | 20,287 | - | - | - | - | 20,312 | ||||||||||||||||||||||||
Grant
of options to consultants
|
- | - | 29,500 | - | - | 29,500 | ||||||||||||||||||||||||||
Cash
advanced on stock subscriptions
|
- | - | - | - | - | 425,000 | 425,000 | |||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | (855,391 | ) | (855,391 | ) | - | - | (855,391 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
(855,391 | ) | ||||||||||||||||||||||||||||||
Balance
December 31, 1999
|
11,460,649 | 11,461 | 2,484,219 | (2,984,083 | ) | 425,000 | - | (63,403 | ) | |||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
199,000 | 199 | 99,301 | - | - | - | 99,500 | |||||||||||||||||||||||||
-
cash in March 2000 at $0.50 per share
|
350,000 | 350 | 174,650 | - | - | (175,000 | ) | - | - | |||||||||||||||||||||||
-
cash in March 2000 at $0.455 per share
|
550,000 | 550 | 249,450 | - | - | (250,000 | ) | - | - | |||||||||||||||||||||||
Cancellation
of shares in April 2000
|
(90,706 | ) | (91 | ) | (56,600 | ) | - | - | - | - | (56,691 | ) | ||||||||||||||||||||
Exercise
of options in June 2000
|
405,000 | 405 | 3,645 | - | - | - | 4,050 | |||||||||||||||||||||||||
Spin-off
of Aurora Metals (BVI) Limited
|
- | - | 316,498 | - | - | - | - | 316,498 | ||||||||||||||||||||||||
Net (loss) for the period
|
- | - | - | (677,705 | ) | (677,705 | ) | - | - | (677,705 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
(677,705 | ) | ||||||||||||||||||||||||||||||
Balance
December 31, 2000
|
12,873,943 | 12,874 | 3,271,163 | (3,661,788 | ) | - | - | (377,751 | ) | |||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net income for the period
|
- | - | - | 128,545 | 128,545 | - | - | 128,545 |
- Unrealized holding losses on available-for-sale
securities
|
- | - | - | (141,928 | ) | - | - | (141,928 | ) | (141,928 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
(13,383 | ) | ||||||||||||||||||||||||||||||
Balance
December 31, 2001
|
12,873,943 | 12,874 | 3,271,163 | (3,533,243 | ) | - | (141,928 | ) | (391,134 | ) | ||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
3,708,038 | 3,708 | 351,492 | - | - | - | - | 355,200 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net income for the period
|
- | - | - | (137,329 | ) | (137,329 | ) | - | - | (137,329 | ) | |||||||||||||||||||||
-
Unrealized holding losses on available-for-sale securities
|
- | - | - | 141,928 | - | 141,928 | 141,928 | |||||||||||||||||||||||||
Total
comprehensive (loss)
|
4,599 | |||||||||||||||||||||||||||||||
Balance,
December 31, 2002
|
16,581,981 | 16,582 | 3,622,655 | (3,670,572 | ) | - | (31,335 | ) | ||||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
settlement of indebtedness
|
2,752,450 | 2,752 | 114,806 | - | - | - | - | 117,558 | ||||||||||||||||||||||||
-
cash in December 2003 at $0.25 per share
|
100,000 | 100 | 24,900 | - | - | - | - | 25,000 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net income for the period
|
- | - | - | (96,404 | ) | (96,404 | ) | - | - | (96,404 | ) | |||||||||||||||||||||
-
Unrealized holding losses on available-for-sale securities
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total
comprehensive (loss)
|
(96,404 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2003
|
19,434,431 | 19,434 | 3,762,361 | (3,766,976 | ) | - | - | 14,819 | ||||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash in January 2004 at $0.25 per share, less issuance
costs
|
100,000 | 100 | 22,400 | - | - | - | - | 22,500 | ||||||||||||||||||||||||
Imputed
interest
|
- | - | 1,560 | - | - | - | - | 1,560 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net income for the period
|
- | - | - | (223,763 | ) | (223,763 | ) | - | - | (223,763 | ) | |||||||||||||||||||||
-
Unrealized holding losses on available-for-sale securities
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total
comprehensive (loss)
|
(223,763 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2004
|
19,534,431 | 19,534 | 3,786,321 | (3,990,739 | ) | - | - | (184,884 | ) | |||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash in July 2005 at $0.05 per share
|
13,000,000 | 13,000 | 637,000 | - | - | - | - | 650,000 | ||||||||||||||||||||||||
-
settlement of indebtedness
|
3,684,091 | 3,684 | 158,816 | - | - | - | - | 162,500 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net (loss) for the period
|
- | - | - | (457,271 | ) | (457,271 | ) | - | - | (457,271 | ) | |||||||||||||||||||||
-
Unrealized holding losses on available-for-sale securities
|
- | - | - | (4,614 | ) | - | - | (4,614 | ) | (4,614 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
(461,885 | ) | ||||||||||||||||||||||||||||||
Balance,
December 31, 2005
|
36,218,522 | 36,218 | 4,582,137 | (4,448,010 | ) | - | (4,614 | ) | 165,731 | |||||||||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash in February 2006 at $0.50 per share less issuance costs of
$110,000
|
8,000,000 | 8,000 | 3,882,000 | - | - | - | - | 3,890,000 | ||||||||||||||||||||||||
-
non cash finder's fee in December 2006 at $0.70 per share
|
250,000 | 250 | 174,750 | - | - | - | - | 175,000 |
-
cash in December 2006 at $0.50 per share
|
1,000,000 | 1,000 | 499,000 | - | - | - | - | 500,000 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net (loss) for the period
|
- | - | - | (5,463,855 | ) | (5,463,855 | ) | - | - | (5,463,855 | ) | |||||||||||||||||||||
-
Foreign currency translation adjustments
|
- | - | - | (3,692 | ) | - | - | (3,692 | ) | (3,692 | ) | |||||||||||||||||||||
-
Reclassification adjustment for losses on available-for-sale securities
included in net loss
|
- | - | - | 4,614 | - | - | 4,614 | 4,614 | ||||||||||||||||||||||||
Total
comprehensive (loss)
|
$ | (5,462,933 | ) | |||||||||||||||||||||||||||||
Balance,
December 31, 2006
|
45,468,522 | $ | 45,468 | $ | 9,137,887 | $ | (9,911,865 | ) | $ | - | $ | (3,692 | ) | $ | (732,202 | ) | ||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
cash in March 2007 at $0.50 per share
|
500,000 | 500 | 249,500 | - | - | - | - | 250,000 | ||||||||||||||||||||||||
-
cash and settlement of debt in July 2007 at $0.25 per
share
|
5,000,000 | 5,000 | 1,245,000 | - | - | - | - | 1,250,000 | ||||||||||||||||||||||||
-
settlement of indebtedness in August 2007 at $0.20 per
|
250,000 | 250 | 49,750 | - | - | - | - | 50,000 | ||||||||||||||||||||||||
-
cash in September 2007 at $0.20 per share
|
4,000,000 | 4,000 | 796,000 | - | - | - | - | 800,000 | ||||||||||||||||||||||||
Stock
option compensation expense
|
- | - | 454,295 | - | - | - | - | 454,295 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net (loss) for the period
|
- | - | - | (3,259,732 | ) | (3,259,732 | ) | - | - | (3,259,732 | ) | |||||||||||||||||||||
-
Foreign currency translation adjustments
|
- | - | - | (65,255 | ) | - | - | (65,255 | ) | (65,255 | ) | |||||||||||||||||||||
Total
comprehensive (loss)
|
$ | (3,324,987 | ) | |||||||||||||||||||||||||||||
Balance,
December 31, 2007
|
55,218,522 | $ | 55,218 | $ | 11,932,432 | $ | (13,171,597 | ) | $ | - | $ | (68,947 | ) | $ | (1,252,894 | ) | ||||||||||||||||
Issuance
of common stock for
|
||||||||||||||||||||||||||||||||
-
non cash finder's fee in July 2008 at $0.10 per share
|
250,000 | 250 | 24,750 | - | - | - | - | 25,000 | ||||||||||||||||||||||||
-
settlement of indebtedness in December2008 at $0.06 per
share
|
2,603,333 | 2,603 | 153,597 | - | - | - | - | 156,200 | ||||||||||||||||||||||||
Components
of comprehensive income (loss)
|
||||||||||||||||||||||||||||||||
-
Net (loss) for the period
|
- | - | - | (520,105 | ) | (520,105 | ) | - | - | (520,105 | ) | |||||||||||||||||||||
- Foreign currency translation
adjustments
|
- | - | - | 36,259 | - | - | 36,259 | 36,259 | ||||||||||||||||||||||||
Total comprehensive (loss)
|
$ | (483,846 | ) | |||||||||||||||||||||||||||||
Balance, December 31, 2008
|
58,071,855 | $ | 58,071 | $ | 12,110,779 | $ | (13,691,702 | ) | $ | - | $ | (32,688 | ) | $ | (1,555,540 | ) |
The
accompanying notes are an integral part of these consolidated financial
statements
Cumulative
|
||||||||||||
(An
exploration stage enterprise)
|
October
10
|
Year
|
Year
|
|||||||||
1995
(inception)
|
Ended
|
Ended
|
||||||||||
Consolidated
Statements of Cash Flows
|
to
December 31
|
December
31
|
December
31
|
|||||||||
(Expressed in U.S. Dollars)
|
2008
|
2008
|
2007
|
|||||||||
Cash
flows from operating activities
|
||||||||||||
Net
loss for the period
|
$ | (13,691,702 | ) | $ | (520,105 | ) | $ | (3,259,732 | ) | |||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||||||
-
depreciation and amortization
|
86,319 | 14,426 | 12,326 | |||||||||
-
stock compensation expense on stock option grants
|
1,174,795 | - | 454,295 | |||||||||
-
expenses satisfied with issuance of common stock
|
748,800 | 25,000 | 50,000 | |||||||||
-
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
|
(169,235 | ) | (169,235 | ) | - | |||||||
Changes
in operating assets and liabilities:
|
||||||||||||
-
(increase) in receivables
|
(206,978 | ) | - | - | ||||||||
-
(increase) decrease in prepaid expenses and other assets
|
(40,131 | ) | (19,190 | ) | 21,638 | |||||||
-
increase (decrease) in accounts payable and
accrued expenses
|
1,188,455 | 20,076 | (277,451 | ) | ||||||||
Net cash used in operating
activities
|
(10,427,001 | ) | (649,028 | ) | (2,998,924 | ) | ||||||
Cash
flows from investing activities
|
||||||||||||
Purchase
of equipment
|
(187,548 | ) | (250 | ) | (21,992 | ) | ||||||
Proceeds
on disposal of equipment
|
16,761 | 2,312 | - | |||||||||
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 | ) | 2,062 | (21,992 | ) | |||||||
Cash
flows from financing activities
|
||||||||||||
Proceeds
from common stock, less issuance costs
|
8,842,339 | - | 1,800,000 | |||||||||
Loan
proceeds from related party
|
289,000 | - | 250,000 | |||||||||
Proceeds
from convertible notes and loans
|
1,469,252 | 687,260 | 500,000 | |||||||||
Net proceeds from (payments on) advances payable
-related party
|
- | (161,441 | ) | 161,441 | ||||||||
Net cash provided by financing
activities
|
10,600,591 | 525,819 | 2,711,441 | |||||||||
Effect of exchange rate changes on
cash
|
165,350 | 133,749 | 35,293 | |||||||||
Increase
(decrease) in cash and cash equivalents
|
16,511 | 12,602 | (274,182 | ) | ||||||||
Cash, beginning of year
|
- | 3,909 | 278,091 | |||||||||
Cash, end of year
|
$ | 16,511 | $ | 16,511 | $ | 3,909 |
The
accompanying notes are an integral part of these consolidated financial
statements
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
|
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 (see Note
3). 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 $649,028 from operating activities
in 2008. 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
|
These
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America 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.
|
(b)
|
Accounting
Estimates
|
The
preparation of financial statements in conformity with accounting principles
generally accepted 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.
|
(c)
|
Cash
Equivalents
|
Cash
equivalents comprise certain highly liquid instruments with a maturity of three
months or less when purchased. The Company did not have any cash
equivalents at December 31, 2008 and 2007. No amounts were paid for income taxes
or interest in 2008 or 2007.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
2.
|
Significant
Accounting Policies (continued)
|
|
(d)
|
Equipment
|
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
|
Office
equipment, furniture and fixtures
|
2
to 10 years
|
|
(e)
|
Mineral
Properties and Exploration Expenses
|
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 December 31, 2008
and 2007, 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.
|
(f)
|
Share-Based
Payment
|
The
Company accounts for share-based payments under the fair value method of
accounting for stock-based compensation consistent with Statement of Financial
Accounting Standards (“SFAS”) No. 123 (R) (SFAS 123 (R)), Share-based
Payment.
Under the
fair value recognition provisions of this statement, stock-based compensation
cost is measured at the grant date based on the fair value of the award and is
recognized as expense on a straight-line basis over the requisite service
period, which is generally the vesting period.
|
(g)
|
Interest
Expense
|
Interest
expense was approximately $109,660 in 2008 (2007 - $77,477)
respectively.
|
(h)
|
Foreign
Currency Translations and
Transactions
|
The
Company's reporting currency is the U.S. Dollar. Aurora Gold
Mineracao Ltda is a foreign operation and its functional currency is the
Brazilian Real (Real). Certain contractual obligations in these consolidated
financial statements are stated in Brazilian Reals. The Brazilian Real to U.S.
dollar exchange rate at December 31, 2008 was U.S. $0.42700 to 1
Real.
The
Company translates foreign assets and liabilities of its subsidiaries, other
than those denominated in U.S. dollars, at the rate of exchange at the balance
sheet date. Revenues and expenses are translated at the average rate of exchange
throughout the year. Gains or losses from these translations are reported as a
separate component of other comprehensive income (loss) until all or a part of
the investment in the subsidiaries is sold or liquidated. The translation
adjustments do not recognize the effect of income tax because the Company
expects to reinvest the amounts indefinitely in operations.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
2.
|
Significant
Accounting
Policies (continued)
|
|
(h)
|
Foreign
Currency Translations and Transactions
(continued)
|
Transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the local functional currency are included
in foreign exchange (gain) loss in the consolidated statements of
operations.
|
(i)
|
Concentration
of Credit Risk
|
The
Company places its cash with high credit quality financial institutions in
Canada and Brazil. The Company did not have funds deposited in banks beyond the
insured limits as of December 31, 2008 and 2007.
|
(j)
|
Long-Lived
Assets Impairment
|
Long-lived
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable, in accordance with
SFAS No. 144 (SFAS 144), Accounting for the Impairment or
Disposal of Long-Lived Assets. An impairment loss would be
recognized when the carrying amount of an asset exceeds the estimated
undiscounted future cash flows expected to result from the use of the asset and
its eventual disposition.
The
amount of the impairment loss to be recorded is calculated by the excess of the
asset's carrying value over its fair value. Fair value is generally
determined using a discounted cash flow analysis. The Company has not recognized
any impairment losses through December 31, 2008.
|
(k)
|
Comprehensive
income
|
The
Company has adopted SFAS No. 130 (SFAS 130), Reporting Comprehensive
Income, which establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. The Company is
disclosing this information on its Consolidated Statement of Stockholders’
Equity (Deficiency). Comprehensive income comprises equity except those
resulting from investments by owners and distributions to owners. Accumulated
other comprehensive income consists entirely of foreign currency translation
adjustments at December 31, 2008 and 2007.
|
(l)
|
Fair
Value of Financial Instruments and
Risks
|
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, advances payable – related party, loans
payable and loan payable - related party 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.
Management is of the opinion that the Company is not exposed to significant
interest or credit risks arising from these financial instruments.
The
Company operates outside of the United States of America (primarily in Brazil)
and is exposed to foreign currency risk due to the fluctuation between the
currency in which the Company operates in and the U.S. dollar.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
2. Significant
Accounting Policies (continued)
|
(m)
|
Income
Taxes
|
The
Company has adopted SFAS No. 109 (SFAS 109), Accounting for Income Taxes,
which requires the Company to recognize deferred tax liabilities and assets for
the expected future tax consequences of events that have been recognized in the
Company's financial statements or tax returns using the liability
method. Under this method, deferred tax liabilities and assets are
determined based on the differences between the financial statement carry
amounts and tax bases of assets and liabilities using enacted tax rates in
effect in the years in which the differences are expected to
reverse.
In July
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
interpretation No. 48 (“FIN No. 48”). This interpretation clarifies
the accounting for uncertainty in income taxes recognized in a company’s
financial statements in accordance with SFAS No. 109. This
interpretation prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken in a
tax return. It also provides guidance on derecognition,
classification, interest and penalties, accounting in interim periods,
disclosure and transition.
FIN No.
48 is effective for fiscal years beginning after December 15,
2006. The adoption of this interpretation did not have a material
impact on the Company’s results of operations or financial
position. As such, the Company has not recorded any liabilities for
uncertain tax positions or any related interest and penalties. The
Company’s tax returns are open to audit for the years ending December 31, 2003
to 2008.
|
(n)
|
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 2008 and 2007
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 2008 and 2007 and the convertible notes payable
(convertible into 1,726,750 common shares at December 31, 2008) in
2008.
|
(o)
|
New
Accounting Pronouncements
|
In
December 2007, the Emerging Issues Task Force of the FASB issued EITF Issue
No. 07-1, Accounting for
Collaborative Arrangements (“EITF 07-1”), which is effective for
fiscal years beginning after December 15, 2008. EITF 07-1 provides
income statement classification and related disclosure guidance for participants
in a collaborative arrangement. The Company does not expect the adoption of
EITF 07-1 to have a material impact on its financial results.
In December 2007, the FASB issued
SFAS No. 160, Noncontrolling
Interests in Consolidated Financial Statements — an amendment of Accounting
Research Bulletin No. 51 (“FAS 160”), which amends
Accounting Research Bulletin No. 51 to establish accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. FAS 160 is effective for the Company’s
fiscal year beginning January 1, 2009. The Company does not expect
the adoption of FAS 160 to have a material impact on its financial
results.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
2.
|
Significant
Accounting
Policies (continued)
|
|
(o)
|
New
Accounting Pronouncements
(continued)
|
In
December 2007, the FASB issued SFAS No. 141R, Business Combinations
(“FAS 141R”), which establishes principles and requirements for recognizing
and measuring identifiable assets and goodwill acquired, liabilities assumed,
and any noncontrolling interest in an acquisition, at their fair value as of the
acquisition date. FAS 141R is effective for business combinations for which
the acquisition date is on or after the beginning of the first annual reporting
period beginning on or after December 15, 2008. This standard will change
the Company’s accounting treatment for business combinations on a prospective
basis.
|
(p)
|
Reclassifications
|
Certain
reclassifications have been made to the 2007 consolidated financial statements
to conform to the current year presentation.
|
3.
|
Mineral
Properties and Exploration Expenses
|
British
Columbia, Canada – Kumealon Property
In
February 1999, the Company acquired, by staking, a 741 acre limestone property
located on the north shore of Kumealon Inlet, southeast of Prince Rupert,
British Columbia, Canada. A finder’s fee of 25,000 shares of common
stock of the Company was issued in connection with these claims.
In fiscal
year 2000, there were no proven mineral reserves discovered and the Company
continuously operated with a working capital deficiency. These
conditions raised substantial doubt regarding the recovering of the capitalized
acquisition cost. Therefore, pursuant to guidance established in SFAS No. 121,
"Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to
be Disposed of", the Company wrote off the capitalized acquisition cost of
$23,630 to operations. The Company's ownership interest in this property is
still in good standing.
Gold
properties in the Municipality of Itaituba, in the Tapajos gold province of the
State of Para, Brazil
Between
December 21, 2005 and May 26, 2006 the Company signed four Memorandum of
Understanding (“MOU”) covering the Piranhas, Branca de Neve, Bigode and Santa
Lúcia properties in the Municipality of Itaituba, Tapajos gold province, State
of Para, Brazil. During the first quarter of 2007, the Company signed an MOU on
the Comandante Araras property.
The MOUs
provide the Company with a review period, ranging from two months to six months,
to access the mineral potential of the properties.
Between
January 1, 2006 and March 31, 2006 the Company signed five option agreements
covering the Novo Porto, Ouro Mil, Santa Isabel, São Domingos and São João
mineral exploration licenses located in the Municipality of Itaituba, in the
Tapajos gold province of the State of Para, Brazil. The Company relinquished its
options on the Porto Novo and Ouro Mil properties in 2006 and the Santa Isabel
property in 2007.
Memorandum of
Understandings:
The
Piranhas MOU provided the Company with a 180 day review period to access the
gold potential of the property. If the Company decided to proceed with acquiring
a 100 percent interest in the title to the mineral rights then the Company would
give notice to the vendors of its intention to acquire title to the mineral
rights at least five days prior to the expiration of the aforementioned period.
The Company would then enter into an option agreement with the property vendors
for the Assignment and transfer of the mineral rights.
|
The
terms of the Piranhas option agreement, as specified in the MOU, allowed
the Company to perform geological surveys and assessment work necessary to
ascertain the existence of possible mineral deposits which may be
economically mined and to earn a 100% interest in the Piranhas project
mineral rights via structured cash payments. The total option
agreement payments for the license were structured as follows: June 30,
2006 – USD $30,000 (paid); July 21, 2006 – USD $70,000 (paid and cancelled
Block 1); July 21, 2007 – USD $120,000 (advanced R$10,000 in September
2007 and subsequently relinquished the option); July 21, 2008 – USD
$180,000; July 21, 2009 – USD $1,600,000 for a total of USD $2,000,000.
The vendor would have a 1.5% Net Smelter Royalty. The option agreement
could be terminated at any time upon written notice to the vendor and the
Company would be free of any and all payment commitments yet to be
due.
|
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
3.
|
Mineral
Properties and Exploration Expenses
(continued)
|
Gold
properties in the Municipality of Itaituba, in the Tapajos gold province of the
State of Para, Brazil (continued)
|
In
December 2007, the Company decided not to follow-up the preliminary
exploration program on the Piranhas property and decided not to exercise
the option to acquire the property and no further payments are
due.
|
The
Branca de Neve MOU provided the Company with a 180 day review period to access
the gold potential of the property. If the Company decided to proceed with
acquiring a 100 percent interest in the title to the mineral rights then the
Company would give notice to the vendors of its intention to acquire title to
the mineral rights at least five days prior to the expiration of the
aforementioned period. The Company would then enter into an option agreement
with the property vendor for the assignment and transfer of the mineral
rights.
The terms
of the Branca de Neve option agreement, as specified in the MOU, allowed the
Company to perform geological surveys and assessment work necessary to ascertain
the existence of possible mineral deposits which may be economically mined and
to earn a 100% interest in the Branca de Neve property mineral rights via
structured cash payments. The total option agreement payments for the
license were structured as follows: April 28,
|
2006
– R$35,000 (Reals – Brazilian currency - Paid); October 25, 2006 –
R$35,000 (paid); April 25, 2007 – R$35,000 (paid R$5,000) cancelled option
agreement and no further payments are due; October 25, 2007 – R$35,000;
April 25, 2008 – R$35,000; October 25, 2008 – R$35,000; April 25, 2009 –
R$35,000; April 25, 2009 – R$500,000 for a total of R$745,000. The vendor
would have a 0.75% Net Smelter Royalty. The Royalty payment could be
purchased at any time upon written notice to the vendor and payment of
R$500,000. The option agreement could be terminated at any time upon
written notice to the vendor and the Company would be free of any and all
payment commitments yet to be due.
|
In 2007,
the Company decided not to follow-up the preliminary exploration program on the
Branca de Neve property and decided not to exercise the option to acquire the
property and no further payments are due.
The
Bigode MOU provides the Company with a 180 day review period to access the gold
potential of the property. If the Company decides to proceed with acquiring a
100 percent interest in the title to the mineral rights then the Company would
give notice to the vendors of its intention to acquire title to the mineral
rights at least five days prior to the expiration of the aforementioned period.
The Company would then enter into an option agreement with the property vendors
for the assignment and transfer of the mineral rights.
The terms
of the Bigode option agreement, as specified in the MOU, allow the Company to
perform geological surveys and assessment work necessary to ascertain the
existence of possible mineral deposits which may be economically mined and to
earn a 100% interest in the Bigode property mineral rights via structured cash
payments. The total option agreement payments for the license are
structured as follows: October 30, 2006 – USD$60,000 (paid); October 30, 2007 –
USD$53,118 (paid); January 30, 2008 – USD$40,000 (paid); October 30, 2008 –
USD$90,000 (not paid - cancelled option agreement and no further payments are
due); October 30, 2009 – USD$100,000; October 30, 2010 –USD$1,000,000 for a
total of USD $1,343,118. The vendor would have a 0.75% Net Smelter Royalty. The
Royalty payment could be purchased at any time upon written notice to the vendor
and payment of USD$500,000. The option agreement could be terminated at any time
upon written notice to the vendor and the Company would be free of any and all
payment commitments yet to be due.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
3.
|
Mineral
Properties and Exploration Expenses
(continued)
|
Gold
Properties in the Municipality of Itaituba, in the Tapajos gold province of the
State of Para, Brazil (continued)
The Santa
Lúcia MOU provided the Company with a 90 day review period to access the gold
potential of the property. If the Company decided to proceed with acquiring a
100 percent interest in the title to the mineral rights then the Company would
give notice to the vendors of its intention to acquire title to the mineral
rights at least five days prior to the expiration of the aforementioned period.
The Company would then enter into an option agreement with the property vendors
for the assignment and transfer of the mineral rights.
The
terms of the Santa Lúcia option agreement, as specified in the MOU, allowed the
Company to perform geological surveys and assessment work necessary to ascertain
the existence of possible mineral deposits which may be economically mined and
to earn a 100% interest in the Santa Lúcia property mineral rights via
structured cash payments. The total option agreement payments for the
license were structured as follows: September 1, 2006 – USD $20,000 (paid and
cancelled agreement and no further payments are due); March 1, 2007 – USD
$50,000; March 1, 2008 – USD $60,000 (not paid - cancelled option agreement and
no further payments are due); March 1, 2009 – USD $70,000; September 1, 2009 –
USD $500,000 for a total of USD $700,000. The vendor would have a 1.5% Net
Smelter Royalty. The Royalty payment could be purchased at any time upon written
notice to the vendor and payment in Reals (Brazilian currency) of the equivalent
of USD $1,000,000. The option agreement could be terminated at any time upon
written notice to the vendor and the Company would be free of any and all
payment commitments yet to be due.
The
Comandante Araras option agreement allows the Company to perform geological
surveys and assessment work necessary to ascertain the existence of possible
mineral deposits which may be economically mined and to earn a 100% interest in
the Comandante Araras property mineral rights via structured cash
payments. The total option agreement payments for the license are
structured as follows: November 1, 2006 R$20,000 (paid); November 15, 2006 –
R$40,000 (paid); December 15, 2006 R$40,000 (paid); May 18, 2007 - R$15,000
(paid); May 29, 2007 -
R$50,000 (paid); July 15, 2008 - USD $60,000 (paid by Samba Minerals Limited as
part of the agreement with them discussed in note 4); July 15, 2009 - USD
$70,000; July 15, 2010 – USD $500,000 for a total of R$165,000 and USD $630,000.
The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be
purchased at any time upon written notice to the vendor and payment in Reals
(Brazilian currency) of the equivalent of USD $1,000,000. The option agreement
can be terminated at any time upon written notice to the vendor and the Company
will be free of any and all payment commitments yet to be
due.
Option
Agreements:
The Santa
Isabel option agreement allowed the Company to perform geological surveys and
assessment work necessary to ascertain the existence of possible mineral
deposits which may be economically mined and to earn a 100% interest in the
Santa Isabel property mineral rights via structured cash
payments. The total option agreement payments for the license were
structured as follows: February 7, 2006 – USD $25,000 (paid); July 21, 2006 –
USD $60,000 (paid) and cancelled the option agreement; July 21, 2007 – USD
$80,000; July 21, 2008 – USD $100,000; July 21, 2009 – USD $1,500,000 for a
total of USD $1,765,000. The vendor would have a 1.5% Net Smelter Royalty. The
Royalty payment could be purchased at any time upon written notice to the vendor
and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000.
The option agreement could be terminated at any time upon written notice to the
vendor and the Company would be free of any and all payment commitments yet to
be due.
The São
Domingos option agreement allows the Company to perform geological surveys and
assessment work necessary to ascertain the existence of possible mineral
deposits which may be economically mined and to earn a 100% interest in the São
Domingos property mineral rights via structured cash payments. The
total option agreement payments for the license are structured as follows:
February 7, 2006 – USD $40,500 (paid); July 30,
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
3.
|
Mineral
Properties and Exploration Expenses
(continued)
|
|
Gold
Properties in the Municipality of Itaituba, in the Tapajos gold province
of the State of Para, Brazil
(continued)
|
2006 –
USD $67,500 (paid); July 30, 2007 - USD $112,500 (payment will be made as soon
as the Vendor converts the license into an exploration license and transfers
title to Aurora Gold and is not owed or accrued as a liability until that time);
July 30, 2008 – USD $139,500(payment will be made as soon as the Vendor converts
the license into an exploration license and transfers title to Aurora Gold and
is not owed or accrued as a liability until that time); December 30, 2008 – USD
$675,000 (payment will be made as soon as the Vendor converts the license into
an exploration license and transfers title to Aurora Gold and is not owed or
accrued as a liability until that time)for a total of USD $1,035,000. The vendor
will have a 2.0% Net Smelter Royalty. The Royalty payment can be purchased at
any time upon written notice to the vendor and payment in Reals (Brazilian
currency) of the equivalent of USD $500,000.
The
option agreement can be terminated at any time upon written notice to the vendor
and the Company will be free of any and all payment commitments yet to be
due.
|
The
São João option agreement allows the Company to perform geological surveys
and assessment work necessary to ascertain the existence of possible
mineral deposits which may be economically mined and to earn a 100%
interest in the São João property mineral rights via structured cash
payments. The total option agreement payments for the license
are structured as follows: April 12, 2006 – USD $20,000 (paid); September
12, 2006 – USD $25,000 (paid); September 12, 2007 – USD $60,000 (paid);
September 12, 2008 – USD $80,000 (paid by Samba Minerals Limited as part
of the agreement with them discussed in note 4); September 12, 2009 – USD
$1,250,000 for a total of USD $1,435,000. The vendor will have a 1.5% Net
Smelter Royalty. The Royalty payment can be purchased at any time upon
written notice to the vendor and payment in Reals (Brazilian currency) of
the equivalent of USD $1,000,000. The option agreement can be terminated
at any time upon written notice to the vendor and the Company will be free
of any and all payment commitments yet to be
due.
|
|
4.
|
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 a
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 a
80% participation interest in the relevant property to Samba and enter into a
formal joint venture agreement to govern 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 December 31, 2008 and thus no
joint venture has been formed as of that date.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
5.
|
Equipment
|
December 31, 2008
|
December 31, 2007
|
|||||||
Vehicles
|
$ | 64,265 | $ | 85,094 | ||||
Office
equipment
|
52,459 | 65,731 | ||||||
Furniture and fixtures
|
15,742 | 20,845 | ||||||
132,466 | 171,670 | |||||||
Accumulated depreciation
|
(43,493 | ) | (37,127 | ) | ||||
|
$ | 88,973 | $ | 134,543 |
The
majority of equipment held at December 31, 2008 and 2007 is located in
Brazil.
|
6.
|
Notes
and Loans Payable
|
The
Company has two notes payable of $518,025 ($750,000 Australian dollars) at
December 31, 2008, 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 a loan payable of $250,000 at December 31, 2008 and 2007, that bears
interest at 6% per annum, is due on demand and is unsecured.
The
Company had a loan payable to a related party of $250,000 at December 31, 2007,
that bears interest at 6% per annum, is due on demand and is unsecured. The
entity to which the loan is payable is no longer a related party at December 31,
2008, and thus the loan is included in loans payable on the consolidated balance
sheet at December 31, 2008.
|
7.
|
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.
On August
6, 2007, the Company issued five-year options to employees and directors to
purchase 2,300,000 common shares. The options are exercisable at any time
from the grant date up to and including the 6th day of August 2012. The
aggregate fair value of these options at the date of grant of $454,295 was
estimated using the Black-Scholes option pricing model and was expensed in full
on the date of grant as the options were immediately vested.
The fair
value of options at the date of grant is determined under the Black-Scholes
option-pricing model. During the year ended December 31, 2007, the
following assumptions were used:
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
7.
|
Stock
Options (continued)
|
Assumptions
|
|
Risk-free interest rate
|
4.52%
|
Annual rate of dividends
|
-
|
Historical volatility
|
144%
|
Expected life
|
2.5
years
|
The
grant-date fair value of option awards was $0.20 per share during the year ended
December 31, 2007.
The
risk-free interest rate is based on the U.S. Treasury yield curve in effect
at the time of grant. The Company does not anticipate declaring dividends in the
foreseeable future. Volatility is based on historical data. The expected life of
an option was determined based on the average of the contractual life and
vesting period of the options.
The
following is a summary of stock option activity for the years ended December 31,
2008 and 2007, and the status of stock options outstanding at December 31,
2008:
Shares
|
Exercise
price
|
Remaining
Contractual
Life (yrs)
|
Aggregate
Intrinsic
value
|
|||||||||||||
Outstanding
at January 1, 2007
|
- | $ | - | - | $ | - | ||||||||||
Granted
|
2,300,000 | 0.26 | ||||||||||||||
Outstanding
and exercisable at December 31, 2008 and 2007
|
2,300,000 | $ | 0.26 | 3.6 | $ | 436,770 |
The aggregate intrinsic value in the
table above 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 2008 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 December 31,
2008.
There
were no stock options granted during 2008.
8.
|
Related
Party Transactions
|
Related
party transactions not disclosed elsewhere in these consolidated financial
statements:
|
a.
|
During
the fiscal year 2008, consulting fees of $134,558 (2007 – $236,651) were
paid to directors of the Company and its subsidiary. The transactions were
recorded at the exchange amount, being the value established and agreed to
by the related parties.
|
|
b.
|
The
advances payable - related party at December 31, 2007 was due to a
director of the Company’s subsidiary and was non interest bearing and due
upon demand.
|
|
c.
|
Included
in accounts payable - related parties at December 31, 2007 is $28,444
payable to directors of the Company and its subsidiary for consulting fees
and various expenses incurred on behalf of the
Company.
|
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
9.
|
Non-Cash
Investing and Financing Activities
|
In
December 2008, 2,603,333 shares of common stock of the Company were issued to
settle debts of $156,200. Of the 2,603,333 common shares issued, 1,488,533
common shares were issued to a director in payment of his services valued at
$75,108 and expenses valued at $14,204.
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.
In July
2007, 2,000,000 common shares were issued at $0.25 per share to settle loans of
$500,000. In August 2007, the Company issued 250,000 common shares at $0.20 per
share in payment of services performed by an individual valued at
$50,000.
|
10.
|
Income
Taxes
|
|
a.
|
The
Company and its subsidiary operate in several tax jurisdictions, and its
income is subject to various rates of taxation. The Company has net losses
for tax purposes in the United States and Brazil totaling approximately
$5,833,000 and $6,504,000, respectively, which may be applied against
future taxable income. Accordingly, there is no tax expense for
the years ended December 31, 2008 and 2007. The potential tax
benefits arising from these losses have not been recorded in the
consolidated financial statements as a full valuation allowance has been
recorded against them. The Company evaluates its valuation allowance
requirements on an annual basis based on projected future
operations. When circumstances change and this causes a change
in management's judgment about the realizability of deferred tax assets,
the impact of the change on the valuation allowance is reflected in
current operations.
|
The right
to claim the losses in the United States expire as follows:
2011
|
$ | 231,000 | ||
2012
|
564,000 | |||
2018
|
331,000 | |||
2019
|
795,000 | |||
2020
|
550,000 | |||
2022
|
138,000 | |||
2023
|
90,000 | |||
2024
|
222,000 | |||
2025
|
457,000 | |||
2026
|
1,094,000 | |||
2027
|
800,000 | |||
2028
|
561,000 | |||
$ | 5,833,000 |
Tax loss
carryforwards in Brazil have no expiration dates and are available to offset up
to 30% of annual income before tax in any year.
AURORA
GOLD CORPORATION
Notes to
the consolidated financial statements
December
31, 2008 and 2007
|
10.
|
Income
Taxes (continued)
|
|
b.
|
The
tax effects of temporary difference that give rise to the Company's net
deferred tax asset are as follows:
|
2008
|
2007
|
|||||||
Tax
loss carryforwards
|
$ | 4,195,000 | $ | 3,960,000 | ||||
Valuation
allowance
|
(4,291,000 | ) | (4,114,000 | ) | ||||
Stock
compensation expense
|
154,000 | 154,000 | ||||||
Foreign
exchange gain related to outstanding notes payable
|
(58,000 | ) | - | |||||
|
$ | - | $ | - |
|
c.
|
The
reconciliation of income tax computed at the federal statutory rate to
income tax expense is as follows:
|
2008
|
2007
|
|||||||
Tax
at statutory rate
|
$ | (177,000 | ) | $ | (1,108,000 | ) | ||
Change
in valuation allowance for deferred tax asset
|
177,000 | 1,108,000 | ||||||
Income
tax expense
|
$ | - | $ | - |
|
11.
|
Subsequent
Events
|
|
a.
|
In September 2009,
convertible notes payable and related accrued interest aggregating US
$739,151.69 (AUD $850,479.45) were settled through the issuance of
5,000,000 shares of common stock of the Company
.
|
|
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.
|
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
ITEM
13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Our
estimated expenses in connection with the issuance and distribution of the
securities being registered are:
Securities
and exchange commission filing fee
|
$ | 364 | ||
Accounting
fees and expenses
|
7,500 | |||
Legal
fees and expenses
|
25,000 | |||
Transfer
agent and fees
|
500 | |||
Printing
and mailing expenses
|
500 | |||
Miscellaneous
offering expenses
|
2,000 | |||
Total
|
$ | 35,864 |
No
portion of the expenses associated with this offering will be borne by the
selling stockholders.
Item
14. Indemnification of Directors And Officers
Section
145 (“Section 145”) of the Delaware General Corporation Law, as amended (the
“DGCL”), permits indemnification of directors, officers, agents and controlling
persons of a corporation under certain conditions and subject to certain
limitations. Section 145 empowers a corporation to indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director,
officer or agent of the corporation or another enterprise if serving at the
request of the corporation. Depending on the character of the proceeding, a
corporation may indemnify against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding if the person indemnified
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. In the case of an action by or in the right of the
corporation, no indemnification may be made with respect to any claim, issue or
matter as to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine that despite the
adjudication of liability such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Section 145
further provides that to the extent a present or former director or officer of a
corporation has been successful in the defense of any action, suit or proceeding
referred to above or in the defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection
therewith.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers or persons controlling us pursuant to the
foregoing provisions, or otherwise, we have been advised that in the opinion of
the Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable.
Item
15. Recent Sales Of Unregistered Securities
During
the past three years, we have offered and sold the following shares of common
stock which were not registered under the Securities Act of 1933, as
amended.
In March
2007, 500,000 common shares were issued at $0.50 per share for net cash proceeds
of $250,000. The shares were issued to individuals and companies who
reside outside the United States of America (in accordance with the exemption
from registration requirements afforded by Regulation S as promulgated
thereunder).
In July
2007, 5,000,000 common shares were issued at $0.25 per share for net cash
proceeds of $1,250,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
In August
2007, 250,000 common shares were issued at $0.20 per share in settlement of
debts of $50,000. The shares were issued to an individual who resides outside
the United States of America (in accordance with the exemption from registration
requirements afforded by Regulation S as promulgated thereunder).
In
September 2007, 4,000,000 common shares were issued at $0.20 per share for net
cash proceeds of $800,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
In July
2008, 250,000 shares were issued as a finder’s fee at $0.10 per share. The
shares were issued to individuals and companies who reside outside the United
States of America (in accordance with the exemption from registration
requirements afforded by Regulation S as promulgated thereunder).
In
December 2008, 2,603,333 shares were issued in connection with debt settlements
in December 2008 at $0.06 per share. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
In
September 2009, 3,000,000 common shares were issued at $0.10 per share for net
cash proceeds of $300,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
In
September 2009, convertible notes payable and related accrued interest
aggregating $739,152 (AUD $850,479) were settled through the issuance of
5,000,000 shares of common stock of the Company at $0.15 per share. The shares
were issued to individuals and companies who reside outside the United States of
America (in accordance with the exemption from registration requirements
afforded by Regulation S as promulgated thereunder).
In
November 2009, 100,000 shares were issued in connection with debt settlements at
$0.18 per share. The shares were issued to individuals and companies who reside
outside the United States of America (in accordance with the exemption from
registration requirements afforded by Regulation S as promulgated
thereunder).
In
November 2009, 150,000 shares were issued in connection with debt settlements at
$0.24 per share. The shares were issued to individuals and companies who reside
outside the United States of America (in accordance with the exemption from
registration requirements afforded by Regulation S as promulgated
thereunder).
In
December 2009, 1,666,667 common shares were issued at $0.30 per share for net
cash proceeds of $500,000. The shares were issued to individuals and
companies who reside outside the United States of America (in accordance with
the exemption from registration requirements afforded by Regulation S as
promulgated thereunder).
Item
16. Exhibits And Financial Statement Schedules
The following Exhibits are attached hereto:
Exhibit Description
Of Exhibit And Filing Reference Number
|
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).
|
|
4.1
|
Form
of Subscription Agreement*
|
|
4.2
|
Debt
Settlement Agreement with Samba Minerals
Limited*
|
|
4.3
|
Form
of Debt Settlement Agreement with Axino AG, Heroe Investments Inc, Jolanda
Investments Ltd, Gemeinhardt GmbH, Lars Pearl and WS Marketing
GmbH*
|
|
5.1
|
Opinion
of Sierchio & Company, LLP**
|
|
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).
|
|
23.1
|
Consent
of Sierchio & Company, LLP (included in Exhibit 5.1)
**
|
|
23.2
|
Consent
of Peterson Sullivan LLP *
|
|
99.1
|
Corporate
Governance Principles incorporated by reference to the Form 10-KSB filed
on March 25, 2004 (SEC File No.
000-24393-04689262).
|
--------
* Filed
Herewith
** To Be
Filed by Amendment.
Item
17. Undertakings
The
undersigned registrant hereby undertakes:
(1) To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to
include any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended;
(ii) to
reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement; and
(iii) to
include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to
such information in the registration statement;
(2) That,
for the purpose of determining any liability under the Securities Act of 1933,
as amended, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
(4) For
purposes of determining liability under the Securities Act of 1933 to any
purchaser:
(i) If
the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule
424(b) as part of a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than prospectuses filed in
reliance on Rule 430A, shall be deemed to be part of and included in the
registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration or made in a document incorporated
or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any
statement that was made in the registration statement or prospectus that was
part of the registration statement or made in any such document immediately
prior to such date of first use.
(5) That
for the purpose of determining liability of the registrant under the Securities
Act of 1933 to any purchaser in the initial distribution of the
securities:
The
undersigned registrant undertakes that in a primary offering of securities of
the undersigned registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser:
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 24 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
Signatures
In
accordance with the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for the filing of this Pre-effective Form S-1 and authorized this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized on February 5, 2010.
Aurora
Gold Corporation
By:
/s/Lars
Pearl
Name: Lars
Pearl
Title: Chief
Executive Officer and President, Chief Financial Officer, Principal Executive
Officer, Principal Financial Officer and Principal Accounting
Officer
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed below by the following persons in the capacities and on the
dates indicated.
/s/ Lars Pearl
|
Dated:
February 5, 2010
|
Name:
Lars
Pearl
Title:
Chief Executive Officer and President,
Chief
Financial Officer Principal Executive Officer,
Principal
Financial Officer and Principal Accounting Officer
Michael Montgomery,
Director
By: /s/ Michael
Montgomery
|
Dated:
February 5, 2010
|
In
accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated:
Power
of Attorney
Each
person whose signature appears below constitutes and appoints A. Cameron
Richardson, his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all Amendments (including
post-effective Amendments) to
this Registration Statement, and to file
the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power
and authority to do and perform each and every act and
thing requisite and necessary to be done in and about
the premises, as fully to all intents
and purposes as he might or could do in
person, hereby ratifying and
confirming all that
said attorneys-in-fact and agents or
his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Michael Montgomery,
Director
By: /s/ Michael
Montgomery
|
Dated:
February 5, 2010
|
Aurora
Gold Corporation
Registration
Statement on Form S-1
File
No 333-
Index
to 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). *
|
|
Form
of Subscription Agreement*
|
|
Debt
Settlement Agreement with Samba Minerals
Limited*
|
|
Form
of Debt Settlement Agreement with Axino AG, Heroe Investments Inc, Jolanda
Investments Ltd, Gemeinhardt GmbH, Lars Pearl and WS Marketing
GmbH*
|
|
5.1
|
Opinion
of Sierchio & Company, LLP**
|
|
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).
*.
|
|
23.1
|
Consent
of Sierchio & Company, LLP (included in Exhibit 5.1)
**
|
|
Consent
of Peterson Sullivan LLP *
|
|
99.1
|
Corporate
Governance Principles incorporated by reference to the Form 10-KSB filed
on March 25, 2004 (SEC File No. 000-24393-04689262).
*
|
II 11