-----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, I5AKpj6JL+o6HxWTETeGm/ju0rHzQ2DZBL9E2lC9x3KDAhE9sK6Wdj5SF2tF5pk8 Rn0FQTlnsTVc9FRwAiXqrw== 0000891554-98-001431.txt : 19981116 0000891554-98-001431.hdr.sgml : 19981116 ACCESSION NUMBER: 0000891554-98-001431 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 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: 98746320 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 QUARTERLY REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 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 (IRS Employer of incorporation or organization) Identification No.) 1505 - 1060 ALBERNI STREET, VANCOUVER B.C. CANADA V6E 4K2 (Address of principle 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 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: 10,870,384 shares of Common Stock were outstanding as of June 30, 1998. Transitional Small Business Disclosure Format (check one); YES [ ] NO [X] AURORA GOLD CORPORATION Statements contained in the quarterly report that are not historical facts are forward-looking statements as that term is defined in the Private securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from the estimated results. Such risks and uncertainties are detailed in filings with the Securities and Exchange Commission. PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS PAGE ---- Balance Sheet 3 Statement of Operations and Accumulated Deficit 4 Statement of Stockholders' Equity 5 Statement of Cash Flows 6 Notes to Financial Statements 7 2
- --------------------------------------------------------------------------------------- Aurora Gold Corporation Balance Sheet (Expressed in U.S. Dollars) September 30, September 30, 1998 1997 For the Periods Ended (Unaudited) (Unaudited) - --------------------------------------------------------------------------------------- Assets Current Cash and cash equivalents $ 935 $ 304,209 Non-trade accounts receivable 20,000 -- ------------------------------- 20,935 304,209 Fixed assets -- 18,625 Mineral properties and exploration expenditures 229,135 20,474 Organizational costs 5,010 7,484 ------------------------------- $ 255,080 $ 350,792 - --------------------------------------------------------------------------------------- Liabilities and Stockholders' Surplus (Deficiency) Liabilities Current Accounts payable $ 33,758 $ 50,140 Notes payable -- -- ------------------------------- 33,758 50,140 ------------------------------- Stockholders' deficiency, Share Capital Authorized 50,000,000 common shares, par value $0.001 Issued 10,924,484 (1997 - 10,670,384) 10,924 10,670 Paid in capital 1,375,811 1,088,869 Deficit (1,165,413) (798,887) ------------------------------- 221,322 300,652 ------------------------------- $ 255,080 $ 350,792 - ---------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 3
- ---------------------------------------------------------------------------------------- Aurora Gold Corporation Statements of Operations and Accumulated Deficit (Expressed in U.S. Dollars) September 30, September 30, 1998 1997 For the Nine Month Periods Ended (Unaudited) (Unaudited) - ---------------------------------------------------------------------------------------- Administration expenses Amortization $ 6,112 $ 4,938 Transfer agents, listing and filing fees 11,063 22,671 Shareholder relations, advertising and promotions 27,103 62,311 Salaries and wages 55,757 30,062 General and administrative 10,226 16,678 Professional fees (legal and accounting) 28,755 52,070 Consultants 13,237 58,980 Rent and other 9,287 13,703 Travel 13,078 14,451 Property development and examinations 47,887 29,240 Telephone and communications 10,154 8,584 ------------------------------------- Loss before other items 232,659 313,688 Other income (expenses) Interest income 2,634 14,295 Interest expense and foreign exchange (4,200) (2,373) ------------------------------------- (1,566) 11,922 Net loss for the period before write-off of mineral properties 234,225 301,766 Write-off of mineral properties -- 135,913 ------------------------------------- Net loss for the period 234,225 437,679 Accumulated deficit, beginning of period 931,188 361,208 ------------------------------------- Accumulated deficit, end of period $ 1,165,413 $ 798,887 - ---------------------------------------------------------------------------------------- Loss per Share - basic and diluted $ (0.02) $ (0.04) - ---------------------------------------------------------------------------------------- Weighted average common shares outstanding 10,774,657 10,463,766 - ----------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 4
- ----------------------------------------------------------------------------------------- Aurora Gold Corporation Statements of Cash Flows (Expressed in U.S. Dollars) September 30, September 30, 1998 1997 For the Nine Month Periods Ended (Unaudited) (Unaudited) - ----------------------------------------------------------------------------------------- Cash provided (used) by: Operating activities Net loss for the period $(234,225) $(437,679) Adjustments to reconcile net loss to net cash used in operating activities Amortization 6,112 4,938 ------------------------------ (228,113) (432,741) Changes in assets and liabilities Decrease in accounts payable (35,108) (138,477) Decrease (Increase) in accounts receivable (7,674) 1,364 ------------------------------ (270,895) (569,854) ------------------------------ Financing activities Proceeds from the issuance of common stock 250,000 795,158 Issuance of common stock for debt 37,196 -- Notes payable -- (50,000) ------------------------------ 287,196 745,158 ------------------------------ Investing activities Purchase of fixed assets -- (15,395) Proceeds from sale of fixed assets 14,449 -- Mineral properties (152,736) 73,651 ------------------------------ (158,287) 58,256 ------------------------------ Increase (decrease) in cash for the period (121,986) 233,560 Cash, beginning of period 122,921 70,649 ------------------------------ Cash, end of period $ 935 $ 304,209 - -----------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 5
- ---------------------------------------------------------------------------------------------------------------------------------- Aurora Gold Corporation Statements of Stockholder's Equity (Expressed in U.S. Dollars) (Unaudited) For the nine months ended September 30, 1998 - ---------------------------------------------------------------------------------------------------------------------------------- Common Stock Additional Total -------------------------------- Paid-In Accumulated Stockholder's Shares Amount Capital Deficit Equity ---------------------------------------------------------------------------------------------- Issued for debt 11,461,150 $ 11,461 $ -- $ -- $ 11,461 ---------------------------------------------------------------------------------------------- Balance, January 1, 1996 11,461,150 11,461 -- -- 11,461 Adjustment for reverse stock split (7,640,766) (7,641) 7,641 -- -- Issuance of common stock For cash 5,800,000 5,800 334,120 -- 339,920 For mineral properties 300,000 300 2,700 -- 3,000 Net loss for the year (361,208) (361,208) ---------------------------------------------------------------------------------------------- Balance, December 31, 1996 9,920,384 9,920 344,461 (361,208) (6,827) Issuance of common stock For cash 750,000 750 744,408 -- 745,158 Net loss for the year (569,980) (569,980) ---------------------------------------------------------------------------------------------- Balance, December 31, 1997 10,670,384 10,670 1,088,869 (931,188) 168,351 Issuance of common stock For cash 200,000 200 249,800 -- 250,000 For debt settlement 54,100 54 37,142 -- 37,196 Net loss for the period (234,225) (234,225) ---------------------------------------------------------------------------------------------- Balance, September 30, 1998 10,924,484 $ 10,924 $ 1,375,811 $(1,165,413) $ 221,322 - ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements. 6 1. Nature of Business and Going Concern The Corporation was formed on October 10, 1995 under the laws of the State of Delaware as Chef's Acquisition Corp. and is a development stage company. On May 20, 1996, the Corporation changed its name to Aurora Gold Corporation. The Company is in the business of developing mineral properties. In the opinion of management, the accompanying unaudited interim financial statements contain all the material adjustments consisting only of normal recurring adjustments necessary to present fairly the financial position, the results of operations and the cash flows of the Company for the interim period. Users of financial information produced for the interim periods are encouraged to refer to the notes contained in the Annual Report when viewing interim financial results. The results for the nine-month period ended September 30, 1998 are not necessarily indicative of the result to be expected for the year. 2. Fixed Assets 1998 Cost: Furniture $ 5,229 Computer equipment 11,554 Office equipment 8,017 -------- 24,800 Less accumulated Depreciation 10,351 -------- Net book value $ 14,449 ======== In September 1998, the fixed assets were sold for their book value to a director of the Company. 3. Mineral Properties and Exploration Expenditures Guatemala Mineral claims Acquisition costs $ 30,499 Exploration expenditures 198,636 --------- $ 229,135 ========= 4. Organizational costs Cost $ 11,511 Accumulated amortization 6,501 --------- $ 5,010 ========= 7 5. Stockholder's Surplus (Deficiency) Common Stock Shares Amount ------------ ------------ Balance, December 31, 1997 10,670,384 $ 10,670 Issuance of common stock For cash 200,000 200 For debt settlement 54,100 54 ------------ ------------ 10,924,484 $ 10,924 ------------ ------------ Additional paid in Capital Balance, December 31, 1997 $ 1,088,869 Issuance of common stock For cash 249,800 For debt settlement 37,142 ------------ $ 1,375,811 ------------ Accumulated Deficit Balance, December 31, 1997 $ (931,188) Net loss for the period (234,225) ------------ $ (1,165,413) ------------ Total shareholders' Equity $ 221,322 ------------ 6. Related Party transactions (a) Included in accounts payable is $ 2,279 (December 31, 1997 - $45,532) due to directors and a corporation controlled by a director in respect of salaries, consulting fees and reimbursement for operating expenses. On September 29, 1998 $37,142 in payables to a director was settled through the issue of 54,100 shares at a cost of $0.6875 per share. (b) During the period ended September 30, 1998 consulting fees, salaries and wages of $ 51,538 (December 31, 1997 -$97,276) were paid or are payable to directors or corporations controlled by directors. 7. Loss Per Share Loss per share was computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding during the period. At September 30, 1998 10,774,657 (September 30, 1997 - 10,463,766). 8. Non-Cash Transactions (a) Organizational costs of $11,461 were paid by former directors during 1995; these former directors received 3,820,383 shares in respect of these expenses. (b) During 1996, the Company issued 300,000 shares at $0.01 as part of the acquisition cost of a mineral property. (c) During 1997, the Company wrote off its Northwest Territories Mineral Properties in the amount of $21,810 and wrote off its Cape Bretton Mineral Properties in the amount of $113,786. 8 The above non-cash transactions have not been included in the Statement of Cash Flows. 9. Commitments The Company entered into a management contract with the President of the Company in 1997. The contract requires the Company to pay management fees totaling $5,000 per month together with an annual performance bonus. The contract can be terminated by either party with three months notice. This management contract was terminated on January 1, 1998. 10. Subsequent Events On October 15th 1998, the Company secured a loan facility for $50,000. This loan facility is in the form of a Promissory Note and bears interest at the Citibank (New York City, USA) prime rate plus one percent. The loan is repayable within fourteen days of receipt of a written demand from the lender for repayment of the Facility. ITEM 2. MANAGEMENT'S' DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A. General The Company is a mineral exploration company based in Vancouver, Canada engaged in the exploration of base and precious metals worldwide. The Company was incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp." and is a development stage company. The Company had limited operations for the year ended December 31, 1995. Since commencement of its exploration operations in 1996, the Company has undertaken a review of potential world mining properties with the objective of acquisitions, exploration and development. In addition to Guatemala, primary regions under investigation by the Company include Argentina, Canada, Egypt, Mexico, United States of America, West Africa and South Africa. The management of the Company has developed the following exploration objectives, the acquisition of properties with large scale potential, to minimize capital costs on leases or concessions, the acquisition of properties adjacent or in close proximity to recent discoveries of large scale mineral reserves, to be the first-in staking where possible, secured repatriation on mineral rights and royalties and to establish joint ventures and/or partnerships with established companies that possess the resources to complete mine development. All of the Company's properties are in the preliminary exploration stage without any presently known body of ore. B. Financing In Fiscal 1997, the Company raised $750,000 through the issuance of 750,000 common shares at a price of $1.00 per share versus $355,000 in Fiscal 1996. In May 1998, the Company raised $250,000 through the issuance of 200,000 common shares at a price of $1.25 per share. 9 C. Financial Information Nine Months Ended September 30, 1998 versus Nine Months Ended September 30, 1997 Net loss for the nine months ended September 30, 1998 decreased by $203,454 over the nine months ended September 30, 1997, due primarily to: (1) The Company's write off of certain mineral properties in the amount of $135,913 in the nine months ended September 30, 1997. (2) Stockholder and public relations expenses decreased by $35,208 ($27,103 - nine months ended September 30, 1998, $62,311 - nine months ended September 30, 1997). (3) Legal and accounting fees decreased by $23,315 ($28,755 - nine months ended September 30, 1998, $52,070 - nine months ended September 30, 1997). (4) Consulting fees decreased by $45,743 ($13,237 - nine months ended September 30, 1998, $58,980 - nine months ended September 30, 1997). (5) Property development and examination expenses increased by $18,647 ($47,887 - nine months ended September 30, 1998, $29,240 - nine months ended September 30, 1997). D. Financial Condition As of September 30, 1998 the Company had cash and cash equivalents of $935. The Company does not have sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 1999 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. The company presently does not have sufficient financial resources to undertake all of its currently planned exploration and development programs. The further exploration and the potential development of any ore deposits found on the Company's exploration license depends upon the Company's ability to obtain financing through any or all of the joint venturing of properties, debt financing, equity financing or other means. There is no assurance that the Company will be successful in obtaining the required financing. Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in such properties and reduce or terminate its operations. The Company has no understanding or agreements with any person regarding such additional funding requirements. The Company's auditor has indicated in its 1997 Annual Report that "the Company has incurred a loss from operations and lacks current liquidity which raises substantial doubt about its ability to pay current liabilities, and therefore continue as a going concern." Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists on any property. While the Company may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its 10 properties, there is no assurance that any such activity will generate funds that will be available for operations. 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 or will be made Year 2000 compliant prior to January 1, 1999. The Company's analysis and program is directed by its or others with whom it transacts business, internal IT personnel. The total amount of the payments made to date and to be made hereafter to such independent consultant are not expected to be material. 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 intends to continue its analysis of whether its non-IT systems require any Year 2000 remediation. 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 not to date formulated a contingency plan to deal with the potential non-compliance of vendors and customers, but will be considering whether such a plan would be feasible. F. Forward Looking Statements The Form 10-QSB includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward looking statements". Forward-looking statements are based on expectations, estimated and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. These include, but are not limited to, the risks of mining industry (for example, operational risks of exploring for, developing and producing crude oil and natural gas, risks and uncertainties involving geology of mineral deposits, the uncertainty of reserve estimates and 11 estimates relating to production volumes, cost and expense projections, potential cost overruns and health, safety and environmental risks), risks relating to the Company's properties (for example, lack of operating history and transportation), fluctuations in mineral prices and exchange rates and uncertainties resulting from potential delays or changes in plans with respect to exploration or development projects or capital expenditures. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. 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 and Use of Proceeds Not Applicable ITEM 3. Defaults Upon Senior Securities Not Applicable ITEM 4. Submission of Matters to a Vote of Security Holders Not Applicable ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: None. (b) Reports on Form 8-K None. 12 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: November 5, 1998 BY: /s/ David Jenkins ----------------------- David Jenkins Director and President Date: November 5, 1998 BY: /s/ John A.A. James ----------------------- John A.A. James Director and Vice-President 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 935 0 0 0 0 935 0 0 255,080 33,758 0 0 0 10,924 210,398 255,080 0 2,634 0 0 232,659 0 4,200 (234,225) 0 (234,225) 0 0 0 (234,225) (0.02) (0.02)
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