-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VKONgEoxXxat4T6jxPJ2PLqdlAiwPAjEjvh9ugQ/zBcY6JasEGWbdGmzOTZ12cPZ GKQsU2Ee3mifLvWtiQAgQQ== 0000891554-00-001221.txt : 20000504 0000891554-00-001221.hdr.sgml : 20000504 ACCESSION NUMBER: 0000891554-00-001221 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA GOLD CORP CENTRAL INDEX KEY: 0001037049 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 133945947 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-24393 FILM NUMBER: 618011 BUSINESS ADDRESS: STREET 1: 1505 1060 ALBERNI ST CITY: VANCOUVER BC CAN V6E STATE: A1 MAIL ADDRESS: STREET 1: 1505-1060 ALBERNI STREET STREET 2: VANCOUVER BC CANADA V6E 4K2 10QSB 1 FORM 10-QSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 [_] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT For the transition period from _ _ _ _ _ _ _ _ _ _ to _ _ _ _ _ _ _ _ _ _ Commission file number 0-24393 AURORA GOLD CORPORATION (Exact name of small business issuer as specified in its charter)
Delaware 13-3945947 (State or other jurisdiction of incorporation or (IRS Employer Identification No.) organization)
1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2 (Address of principal executive offices) (604) 687-4432 (Issuer's Telephone Number) - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check, whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Exchange Act after the distribution of securities under a plan confirmed by court. YES [_] NO [_] APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 12,430,651 shares of Common Stock were outstanding as of March 31, 2000. Transitional Small Business Disclosure Format (check one); YES [_] NO [X] AURORA GOLD CORPORATION This quarterly report contains statements that plan for or anticipate the future and are not historical facts. In this Report these forward looking statements are generally identified by words such as "anticipate", "plan", "believe", "expect", "estimate", and the like. Because forward looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in Part 1 - Financial Information - Item 1. "Financial Statements", Item 2. "Management's Discussion and Analysis or Plan of Operation". The Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for such statements, may not apply to this Report. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE ---- Balance Sheet 3 Statements of Changes in Stockholder's Equity (Deficit) 4-5 Statements of Operations 6 Statement of Cash Flows 7 Summary of Significant Accounting Policies 8-9 Notes to the Financial Statements 10-12 2
- ------------------------------------------------------------------------------------------------------------------- Aurora Gold Corporation Consolidated Balance Sheet (Expressed in U.S. Dollars) (Unaudited, Prepared by Management) March 31, December 31 2000 1999 - ------------------------------------------------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 3,115 $ 2,109 Plant and equipment, net 21,145 -- Mineral property costs 160,071 148,571 ----------------------------------- $ 184,331 $ 150,680 =================================================================================================================== Liabilities and Stockholders' Surplus (Deficiency) Current Accounts payable $ 19,920 $ 160,855 Notes payable 201,474 53,228 ----------------------------------- 221,394 214,083 Stockholders' deficiency, Share Capital Authorized 50,000,000 common shares, par value $0.001 Issued 12,430,651 (1998 - 11,181,494) common shares 12,430 11,461 Additional paid-in capital 2,943,250 2,484,219 Advances for stock subscriptions -- 425,000 Accumulated deficit (2,992,743) (2,984,083) ----------------------------------- (37,063) (63,403) ----------------------------------- $ 184,331 $ 150,680 ===================================================================================================================
The accompanying summary of significant accounting policies and notes form an integral part of these financial statements 3
- ------------------------------------------------------------------------------------------------------------------------------------ Aurora Gold Corporation Consolidated Statements of Changes in Stockholder's Equity (Deficit) (Expressed in U.S. Dollars) (Unaudited. Prepared by Management) For the three months ended March 31, 2000 and for the years ended December 31, 1999 and 1998 - ------------------------------------------------------------------------------------------------------------------------------------ Deficit Acumulated Common Stock Additional Advances during the Total ------------------------- Paid-In for Stock development Stockholder's Shares Amount Capital Subscriptions stage Equity -------------------------------------------------------------------------------------- Balance, January 1, 1998 10,670,389 $ 10,670 $ 1,088,869 $ -- $ (977,088) $ 122,451 Issuance of common stock For cash in May 1998 at $1.25 per share 200,000 200 249,800 -- -- 250,000 For cash in November 1998 at $0.698 per share 71,667 72 53,678 -- -- 53,750 For settlement of indebtedness - November 1998 54,100 54 37,140 -- -- 37,194 For cash in December 1998 at $0.750 per share 143,333 143 107,357 -- -- 107,500 For settlement of indebtedness - December 1998 42,005 42 31,461 -- -- 31,503 Grant of options to employees and directors -- -- 518,900 -- -- 518,900 Grant of options to Consultants -- -- 172,100 -- -- 172,100 Net loss for the year (1,151,604) (1,151,604) -------------------------------------------------------------------------------------- Balance, December 31, 1998 11,181,494 11,182 2,259,304 -- (2,128,692) 141,794 Issuance of common stock For settlement of indebtedness - January 1999 50,000 50 42,140 -- -- 42,190 For settlement of indebtedness - February 1999 8,615 9 6,991 -- -- 7,000 For finders fee - February 1999 25,000 25 20,287 -- -- 20,312 For cash - March 1999 at $0.656 per share 22,871 23 14,977 -- -- 15,000 For settlement of indebtedness - March 1999 31,510 31 22,620 -- -- 22,651 For settlement of indebtedness - August 1999 141,161 141 88,400 -- -- 88,541 Grant option to consultants December 1999 -- -- 29,500 -- -- 29,500 Cash advanced on stock subscriptions -- -- -- 425,000 -- 425,000 Net loss for the period (855,391) (855,391) -------------------------------------------------------------------------------------- Balance, December 31, 1999 11,460,651 11,461 2,484,219 425,000 (2,984,083) (63,403) Issuance of common stock For settlement of indebtedness (January 2000) 70,000 70 34,930 -- -- 35,000 For cash - March 2000 at $.500 per share 350,000 350 174,650 (175,000) -- -- For cash - March 2000 at $.455 per share 550,000 550 249,450 (250,000) -- -- Net loss for the period (8,660) (8,660) -------------------------------------------------------------------------------------- Balance, March 31, 2000 12,430,651 $ 12,431 $ 2,943,249 $ -- $(2,992,743) (37,063) ====================================================================================================================================
The accompanying summary of significant accounting policies and notes form an integral part of these financial statements 4
- ---------------------------------------------------------------------------------------------------------- Aurora Gold Corporation Consolidated Statements of Operations (Expressed in U.S. Dollars) (Unaudited, Prepared by Management) October 10 1995 Three-months ended (inception) to March 31 March 31, --------------------------------- 2000 2000 1999 (cumulative) (Unaudited) (Unaudited) - ----------------------------------------------------------------------------------------------------------- General and administrative expenses Depreciation and amortization $ 22,686 $ 824 $ 576 Interest, bank charges and foreign exchange 36,756 362 190 Administrative and general, net of recoveries 474,658 4,550 (23,004) Professional fees - accounting and legal 338,164 18,946 1,900 Salaries and consulting fees 749,647 17,463 24,947 -------------------------------------------------------- 1,621,911 42,145 4,609 Less interest income 21,602 72 378 -------------------------------------------------------- 1,600,309 42,073 4,231 Exploration expenses 1,353,024 (33,413) 115,231 Write off of mineral property costs 39,410 -- -- -------------------------------------------------------- Net loss for the period $ 2,992,743 $ 8,660 $ 119,462 =========================================================================================================== Loss per share Basis and diluted $ 0.00 $ 0.01 ================================== Weighted average common shares outstanding Basic and diluted 11,519,324 11,219,696 ===========================================================================================================
The accompanying summary of significant accounting policies and notes form an integral part of these financial statements 6
- ------------------------------------------------------------------------------------------------------------------------------------ Aurora Gold Corporation Consolidated Statements of Cash Flows (Expressed in U.S. Dollars) October 10 (Unaudited, Prepared by Management) 1995 Three-months ended (inception) to March 31 March 31, --------------------------------- 2000 2000 1999 (cumulative) (Audited) (Audited) - ------------------------------------------------------------------------------------------------------------------------------------ Cash provided (used) by: Cash flows from operating activities Net loss for the period $(2,992,743) $ (8,660) $ (119,462) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 22,686 824 576 Write off of mineral properties 39,410 -- -- Compensation on stock options 720,500 -- -- Expenses satisfied with common stock 284,391 35,000 85,502 Changes in assets and liabilities Decrease (increase) in accounts receivable -- -- (9,182) Increase (decrease) in accounts payable 19,920 (140,935) 6,346 ------------------------------------------------------ (1,905,836) (113,771) (36,220) ------------------------------------------------------ Investing activities Purchase of fixed assets (46,769) (21,969) -- Mineral property costs (199,481) (11,500) (23,629) Proceeds on disposal of fixed assets 14,449 -- -- Incorporation costs (11,511) -- -- ------------------------------------------------------ (243,312) (33,469) (23,629) ------------------------------------------------------ Financing activities Proceeds from issuance of common stock and stock subscription receipts 1,950,789 -- -- Repayment of notes and advances (300,000) -- -- Proceeds from notes and advances payable 501,474 148,246 -- ------------------------------------------------------ 2,152,263 148,246 -- ------------------------------------------------------ Increase (decrease) in cash for the period 3,115 1,006 (59,849) Cash, beginning of period -- 2,109 68,326 ------------------------------------------------------ Cash, end of period $ 3,115 $ 3,115 $ 8,477 ====================================================================================================================================
The accompanying summary of significant accounting policies and notes form an integral part of these financial statements 7 Notes to Interim Consolidated Financial Statements (Unaudited) Summary of Significant Accounting Policies Basis of Consolidation These consolidated financial statements are stated in US dollars and have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of the Company and its wholly-owned subsidiaries Aurora Gold, S.A., Aurora Gold (BVI) Ltd. and Deltango Gold Limited. In March 2000 the Company divested its interests in Deltango Gold Limited. All intercompany transactions and balances have been eliminated. Mineral Properties and Exploration Expenses Exploration costs are charged to operations as incurred as are normal development costs until such time that proven reserves are discovered. At such time that proven reserves are established, the Company will capitalize all costs to the extent that future cash flow from mineral reserves equals or exceeds the costs deferred. At March 31, 2000 and December 31, 1999 and 1998, the Company did not have proven mineral reserves. Costs of initial acquisition of mineral rights and concessions are capitalized until the properties are abandoned or the right expires. Exploration activities conducted jointly with others are reflected at the Company's proportionate interest in such activities. Foreign Currency Transactions Foreign currency accounts are translated into U.S. dollars as follows: At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the year-end, monetary assets and liabilities are translated into U.S. dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. Organization Costs The Company initially capitalized all costs directly incurred in its formation. To comply with the American Institute of Certified Public Accountants Statement of Position 98-5 "Reporting on Costs of Start-Up Activities", the remaining balance was written off to depreciation expense during 1999. Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles 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. Fair value of Financial Instruments The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable and accrued liabilities. Fair values were assumed to approximate carrying values for these financial instruments, except where 8 noted, since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. Management is of the opinion that the Company is not exposed to significant interest, credit, or currency risks arising from these financial instruments. Income Taxes The Company follows the provisions of Statement of Financial Accounting Standards ("SFAS") No. 109, 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 difference between the financial statement carrying amounts and tax bases of assets and liabilities using enacted rates in effect in the years in which the differences are expected to reverse. Loss Per Share Loss per share is computed in accordance with SFAS No. 128, "Earnings Per Share". Basic loss per share is calculated by dividing the net loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution of securities that could share in earnings of an entity. In loss periods, dilutive common equivalent shares are excluded, as the effect would be anti-dilutive. Basic and diluted earnings per share are the same for the periods presented. Stock Based Compensation The Company applies Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees", and related interpretations in accounting for stock option plans. Under APB No. 25, compensation cost is recognized for stock options granted at prices below the market price of the underlying common stock on the date of grant. SFAS No. 123, "Accounting for Stock-Based Compensation", requires the Company to provide pro-forma information regarding net income as if compensation cost for the Company's stock option plan had been determined in accordance with the fair value based method prescribed in SFAS No. 123. New Accounting Pronouncements In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. SFAS No. 133 requires companies to recognize all derivatives contracts as either assets or liabilities on the balance sheet and to measure them at fair value. If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 2000. Historically, the Company has not entered into derivatives contracts either to hedge existing risks or for speculative purposes. Accordingly, the Company does not expect adoption of the new standards on January 1, 2001 to affect its financial statements. Reclassifications Certain comparative amounts have been restated to conform with the current period's financial statement presentation. 9 Notes to the Consolidated Financial Statements 1. Nature of Business and Going Concern 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 has not yet determined whether its properties contain mineral reserves that may be economically recoverable. These 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 continued operations of the Company and the recoverability of mineral property costs is dependent upon the existence of economically recoverable mineral reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development and upon future profitable production. The Company has incurred recurring operating losses and requires additional funds to meet its obligations and maintain its operations. Management's plans in this regard are to raise equity financing as required. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might result from this uncertainty. 2. Mineral Properties and Exploration Expenses
Accumulated Accumulated Accumulated Balance Balance Balance December 31 December 31 March 31 1998 Additions 1999 Additions 2000 --------------------------------------------------------------------------------- Property acquisition Expenditures Canada - Kumealon $ -- $ 23,630 $ 23,630 $ -- $ 23,630 Guatemala 88,441 15,500 103,941 -- 103,941 Tunisia -- 15,000 15,000 11,500 26,500 United States - Totem Talc 1,000 5,000 6,000 -- 6,000 --------------------------------------------------------------------------------- 89,441 59,130 148,571 11,500 160,071 --------------------------------------------------------------------------------- Property exploration expenditures Canada - Cape Breton 96,186 -- 96,186 -- 96,186 Canada - Kumealon -- 2,286 2,286 910 3,196 Canada - Yukon -- 407,319 407,319 (72,137) 335,182 Guatemala 194,644 53,597 248,241 1,993 250,234 Tunisia -- 93,362 93,362 31,724 125,086 United States - Totem Talc 11,418 39,783 51,201 -- 51,201 Project assessment and exploration expenditures 397,221 90,621 487,842 4,097 491,939 --------------------------------------------------------------------------------- 699,469 686,968 1,386,437 (33,413) 1,353,024 --------------------------------------------------------------------------------- $ 788,910 $ 746,098 $ 1,535,008 (21,913) 1,513,095 =================================================================================
10 3. Fixed Assets
March 31, 2000 March 31, 1999 ---------------------------------------------------------- Accumulated Accumulated Cost Depreciation Cost Depreciation ---------------------------------------------------------- Furniture $ 9,125 $ 342 $ -- $ -- Computer equipment 10,968 411 -- -- Office equipment 1,875 70 -- -- ----------------------------------------------------------- 21,968 823 -- -- ----------------------------------------------------------- Cost less accumulated depreciation 21,145 $ -- ===========================================================
4. Organization Costs March 31, 2000 March 31, 1999 ---------------------------------- Cost $ 11,511 $ 11,511 Less accumulated amortization (11,511) (7,480) -------------------------------- $ -- $ 4,031 ================================ The cumulative effect of the adoption of SOP 98-5 in 1999 resulted in a write off of $4,607. This amount is included in depreciation and amortization on the Statement of Operations due to its insignificance. 5. Loans Payable Loans payable are unsecured, non-interest bearing and due on demand. 6. Related Party Transactions Related party transactions not disclosed elsewhere in these financial statements include: a) Included in accounts payable is $16,300 (1999 - $0) due to directors and a company controlled by a director in respect of salaries, consulting fees and reimbursement for expenses. b) During the quarter, salaries and consulting fees of $31,300 (1999 - $94,150) were paid or are payable to directors or companies controlled by directors. c) In January 2000, fixed assets of $15,000 were purchased for their book value from a director. Except as otherwise noted, these transactions are recorded at the exchange amount, being the value established and agreed to by the related parties. 11 7. Non Cash Investing and Financing Activities In 2000 and 1999, the Company settled various debts with the issuance of shares of common stock as follows: 2000 Conversion Month of Settlement Indebtedness Price Shares ---------------------------------------------------------------------- January $35,000 $0.50 70,000 ------------------------------------------ $35,000 70,000 ========================================== 8. Outstanding Options At March 31, 2000 the Company had 1,405,000 options outstanding. Number Exercise Price Expiry -------------------------------------------------------- 505,000 $0.01 June 2003 450,000 $0.75 September 2003 200,000 $0.75 December 2003 50,000 $0.72 March 2004 200,000 $0.69 August 2004 --------- 1,405,000 ========= - -------------------------------------------------------------------------------- ITEM 2. MANAGEMENT'S' DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (A) General Aurora Gold Corporation (the "Company" or "Aurora") was 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, it redirected its 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 resource properties. The Company changed its name to Aurora Gold Corporation on August 20, 1996 to more fully reflect its business activities. The Company is engaged in the location, acquisition, exploration and, if warranted, development of mineral resource properties. All of the mineral properties in which the Company has an interest or a right to acquire an interest in are currently in the exploration stage. None of the properties have a known body of Mineral Reserves. The Company's primary objective is to explore for gold, silver, base metals and industrial minerals and, if warranted, to develop those existing mineral properties. Its secondary objective is to locate, evaluate, and acquire other mineral properties, and to finance their exploration and development either through equity financing, by way of joint venture or option agreements or through a combination of both. Currently, the Company's activities are centered in Canada, Guatemala, Tunisia and the United States of America. 12 None of the Company's properties contain any known Mineral reserves. The Company's common stock is traded on the NASD's OTC Bulletin Board. (B) Significant developments during the first quarter of 2000 During the first quarter of 2000 the Company settled $35,000 of debt with the issue of 70,000 common shares at $0.50 per share. In February 2000 the Company filed applications for ten (10) additional exploration permits for zinc-lead mineralization in the Kebbouch district of northern Tunisia. The permits were filed with and accepted by the Directeur General L'Office National des Mines. The new permit areas are contiguous with the Hammala property and will increase the area under Aurora's control to 42 square kilometers. The Hammala property, which Aurora holds under option, and these additional permit areas in the Kebbouch district, will be foremost in the Company's exploration plans for 2000. In March 2000 the Company signed a letter of intent with Billiton UK Resources B.V. ("Billiton") for funding of exploration on the Hammala property. The letter of intent will lead to an agreement under which Billiton will make an initial private placement of $600,000 at a unit price of $0.70. Each unit will comprise a common share with a purchase warrant exercisable for one year, at $0.85, for further proceeds of $728,571. After the initial private placement is spent, Billiton can elect to take a First Option wherein it can earn 51% in the Hammala property by spending a further $1.0 million over two years. Following the First Option period, a Joint Venture Phase of further exploration of the Hammala property, with expenditure of $2.0 million, will be funded pro rata by Billiton and Aurora. Prior to the end of the Joint Venture Phase, Billiton can elect to exercise a Second Option to earn a further 19%, i.e., to reach a total of 70%, by financing all further work, including Pre-feasibility and Feasibility Studies, engineering, mine development and construction through to commercial production. Aurora's pro rata share of these costs will be repaid from Aurora's share of cash flow. Aurora will be the Operator from the outset and, subject to certain limitations, will also carry out regional exploration for zinc in Tunisia for Billiton, with Billiton having a right of first refusal to enter into further exploration agreements In April, the March letter of intent between Aurora Gold Corporation and Billiton UK Resources B.V., which specified that an agreement was to be completed by April 14, 2000, was revised and the deadline for the agreement was extended until May 31, 2000. The area for exploration for zinc in the Kebbouch District in Tunisia, North Africa was also extended and will now include Hammala and the ten (10) other contiguous exploration permits for which Aurora filed applications in January 2000 and which were later accepted by the Directeur General L'Office National des Mines. In March 2000 Aurora divested its interest in four (4) exploration properties in the Yukon Territory, Canada. The properties are owned by Deltango Gold Limited ("Deltango"), a Yukon registered corporation and former Aurora subsidiary. In April 2000 Aurora converted its costs incurred to-date on Deltango's four (4) exploration properties located in the Yukon Territory Canada into a convertible debenture. The debenture may be converted into seed shares, or common shares of Deltango depending on the time of conversion. Concurrently, Deltango has established plans to raise additional seed capital through the issuance of new shares to private investors. Subject to meeting certain regulatory requirements, Deltango will also seek a listing on a Canadian exchange in 2000, providing liquidity for Aurora's shareholding. 13 Aurora's decision to relinquish the Yukon gold exploration asset was based, in part, on the recognition of the Company's recent success with its base metal exploration activities in Tunisia, and its subsequent announcement of a letter of intent with Billiton U.K. Resources B.V. (C) Financial Information Three Months Ended March 31, 2000 versus Three Months Ended March 31, 1999 For the three months ended March 31, 2000 the Company recorded a loss of $8,660 or $0.00 per share, compared to a loss of $119,462 or $0.01 per share in 1999. General and administrative expenses - For the three months ended March 31, 2000 the Company recorded general and administrative expenses of $4,550, compared to a credit of $23,004 in 1999. The 1999 credit is due to the allocation and recovery of 1998 administrative costs from four other junior resource companies. Professional fees - accounting and legal - For the three months ended March 31, 2000 the Company recorded legal fees of $14,000, compared to $2,000 in 1999. Exploration expenditures - For the three months ended March 31, 2000 the Company recorded exploration expenses of Credit $33,413, compared to $115,231 in 1999. The following is a breakdown of the exploration expenses by property: - Canada, Kumealon property $910 (1999 - $2,286), Canada - Yukon properties Credit $72,137 (1999 - $0), Guatemala $1,993 (1999 - $45,340), Tunisia $31,724 (1999 - $19,878), United States, totem Talc property $0 (1999 - 19,302), and Project assessment and exploration expenditures of $4,097 (1999 - 28,425). In March 2000 Aurora divested its interest in four (4) exploration properties in the Yukon Territory, Canada owned by Deltango Gold Limited. $72,702 in payables relating to the Yukon properties was transferred to Deltango Gold Limited in March 2000. (D) Financial Condition and liquidity At March 31, 2000, the Company had cash of $3,115 (1999 - $8,477) and working capital deficiency of $218,279 (1999 working capital deficiency - $9,267) respectively. Total liabilities as of March 31, 2000 were $221,394 as compared to $26,926 on March 31, 1999, an increase of $194,468. During 2000 financing activities consisted of the following, proceeds from notes and advances payable $148,246 (1999 - $0). In Fiscal 2000 investing activities consisted of additions to mineral properties $11,500 (1999 - $23,629) and additions to fixed assets $21,969 (1999 - $0). For the three months ended March 31, 2000 the Company recorded a loss of $8,660, or $0.00 per share, compared to a loss of $119,462 ($0.01 per share) in 1999. The Company does not have sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 2000 and (ii) to conduct its preliminary exploration programs. Without cash flow from operations, it may need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to implement additional exploration programs on its properties. Failure to obtain such additional financing may result in a reduction of the Company's interest in certain properties or an actual foreclosure of its interest. The Company has no agreements or understandings with any person as to such additional financing. None of the Company's properties has commenced commercial production and the Company has no history of earnings or cash flow from its operations. While the Company 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. 14 The Company has not declared or paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. (E) Year 2000 issues The "Year 2000 problem", as it has come to be known, refers to the fact that many computer programs use only the last two digits to refer to a year, and therefore recognize a year that begins with "20" as instead beginning with "19". For example, the year 2000 would be read as being the year 1900. If not corrected, this problem could cause many computer applications to fail or create erroneous results. The Company has modified and tested all the critical applications of its information technology ("IT"), the result of which is that all such critical applications are now Year 2000 compliant. The Company believes that virtually all of the non-critical applications of its IT are Year 2000 compliant. The Company is using independent consultants to oversee the Year 2000 project as well, as to perform certain remediation efforts. In addition, progress on the Year 2000 project is also monitored by senior management, and reported to the Board of Directors. The total amount of the payments made to date and to be made hereafter to such independent consultant are not expected to be material. New equipment and software was installed during the third and fourth quarters of 1999. Based on the Company's analysis to date, the Company believes that its material non-IT systems are either Year 2000 compliant, or do not need to be made Year 2000 compliant in order to continue to function in substantially the same manner in the Year 2000. The Company's Year 2000 compliance work has not caused, nor does the Company expect that it will cause, a deferral on the part of the Company of any material IT or non-IT projects. However, there can be no assurance that any of the Company's vendors or others, with whom it transacts business, will be Year 2000 compliant prior to such date. The company is unable to predict the ultimate affect that the Year 2000 problem may have upon the Company, in that there is no way to predict the impact that the problem will have nation-wide or world-wide and how the Company will in turn be affected, and, in addition, the company cannot predict the number and nature of its vendors and customers who will fail to become Year 2000 compliant prior to January 1, 2000. Significant Year 2000 difficulties on the part of vendors or customers could have a material adverse impact upon the Company. The Company intends to monitor the progress of its vendors and customers in becoming Year 2000 compliant. The Company has formulated a contingency plan to deal with the potential non-compliance of vendors and customers. As of April 21, 2000 the Company has not experienced any year 2000 problems nor has any of the Company's vendors or others with whom it transacts business. PART 11. OTHER INFORMATION ITEM 1. Legal Proceedings The Company is not party to any litigation, and has no knowledge of any pending or threatened litigation against it. ITEM 2. Changes in Securities Not Applicable 15 ITEM 3. Defaults Upon Senior Securities Not Applicable ITEM 4. Submission of Matters to a Vote of Security Holders Not Applicable ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: 3.1 Certificate of Incorporation* 3.2 Certificate of Amendment to the Certificate of Incorporation* 3.3 Certificate of Restoration and Renewal of Certificate of Incorporation* 3.4 Amended and Restated By-laws* 10.1 Agreement dated July 18, 1997 between The Company and Minera Motagua, S.A.* 10.2 Agreement dated August 16, 1997 between the Company and Minera Motagua, S.A.* 10.3 Agreement dated November 3, 1997 between the Company and Minera Motagua, S.A.* 10.4 Agreement dated July 28, 1998 between the Company and Minera Motagua, S.A.* 10.5 Agreement dated August 24, 1998 with Jorge Mario Rios Munoz. * 10.6 Agreement dated November 18, 1998 between the Company and United Catalyst, Inc. and Getchell Gold Corporation. * 10.7 Agreement dated February 23, 1999 between the Company and Gregory G. Crowe. * 10.8 Option Agreements dated as shown between the Company and High Marsh Holdings Ltd. * 10.8.1 Hamman Zriba/Jebel Guebli October 15, 1999 * 10.8.2 Koudiat Sidii October 15, 1999 * 10.8.3 Ouled Moussa (bou Jabeur Est) October 15, 1999 * 10.8.4 Hammala January 20, 2000 * 10.8.5 El Mohguer (Garn Halfaya) January 20, 2000 * 10.8.6 Jebel Oum Edeboua (Garn Halfaya) January 20, 2000 * 10.9 Joint Venture Agreement between the Company and Patagonia Gold Corporation * 10.10 Letter of Intent between the Company and Billiton UK Resources B.V. * 27.1 Financial Data Schedule 16 - -------- * Previously Filed (b) Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. Date: April 28, 2000 BY: /s/ David Jenkins -------------- ----------------- David Jenkins Director and President Date: April 28, 2000 BY: /s/ John A.A. James -------------- ------------------- John A.A. James Director and Vice-President EX-27 2 FDS --
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 3,115 0 0 0 0 21,145 160,071 0 184,331 221,394 0 0 0 12,430 (49,493) 184,331 0 0 0 0 8,660 0 0 (8,660) 0 (8,660) 0 0 0 (8,660) (0.00) (0.00)
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