-----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, DWoE5tIEjNWp9kIEIYqBZIhQL+NpifqW61lTaQSHhNypJOZZ8Z7o+oDfAuO9vc9u o7jgJLASAJLgsp113M6urQ== 0001015402-01-503487.txt : 20020410 0001015402-01-503487.hdr.sgml : 20020410 ACCESSION NUMBER: 0001015402-01-503487 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AURORA GOLD CORP CENTRAL INDEX KEY: 0001037049 STANDARD INDUSTRIAL CLASSIFICATION: METAL MINING [1000] IRS NUMBER: 133945947 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24393 FILM NUMBER: 1788716 BUSINESS ADDRESS: STREET 1: SUITE 2000 - 1066 WEST HASTINGS STREET STREET 2: VANCOUVER BC CANADA CITY: V6E 3X2 STATE: A1 ZIP: 00000 BUSINESS PHONE: 6046018217 MAIL ADDRESS: STREET 1: SUITE 2000 - 1066 WEST HASTINGS STREET STREET 2: VANCOUVER BC CANADA CITY: V6E 3X2 STATE: A1 ZIP: 00000 10QSB 1 doc1.txt 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 September 30, 2001 ------------------ [ ] 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 (IRS Employer Identification No.) incorporation or organization) P.O. Box 3711 STN Terminal, 349 West Georgia Street, - --------------------------------------------------- Vancouver B.C. Canada V6B 3Z1 - ----------------------------- (Address of principal executive offices) (604) 687-4432 - -------------- (Issuer's Telephone Number) 1066 West Hastings Street, Suite 2000, Vancouver, B.C., Canada V6E 3X2 - ---------------------------------------------------------------------- (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: 13,642,616 shares of Common Stock ---------- were outstanding as of September 30, 2001. -------------------- 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. INDEX Page No. PART I. Financial Information Item 1. Financial Statements Consolidated Balance Sheets -- 3 September 30, 2001 and December 31, 2000 Consolidated Statements of Operations -- 4 Nine-Months Ended September 30, 2001 Consolidated Statements of Cash Flows -- 5 Nine-Months Ended September 30, 2001 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 PART II. Other Information Item 1. Legal Proceedings 14 Item 2. Changes in Securities 14 Item 3. Defaults Upon Senior Securities 14 Item 4. Submission of Matters to A Vote of Security Holders 14 Item 5. Other Information 14 Item 6. Exhibits and Reports on Form 8-K 14 Signatures 15 2
- ----------------------------------------------------------------------------------------- AURORA GOLD CORPORATION & SUBSIDIARIES (An exploration stage enterprise) Consolidated Balance Sheet 30, 2001 (Expressed in U.S. Dollars) September 30 December 31 (Unaudited) 2001 2000 - ----------------------------------------------------------------------------------------- ASSETS Current Cash $ 551 $ 1,685 Receivables 1,316 300 Loan receivable - 226,778 Investments 133,057 - - ----------------------------------------------------------------------------------------- Total current assets 134,924 228,763 Fixed assets 21,996 25,991 Mineral property costs - - -------------- ------------- $ 156,920 $ 254,754 - ----------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' (DEFICIENCY) Liabilities Current Accounts payable and accrued liabilities $ 26,226 $ 306,238 Loans payable 323,938 326,267 - ----------------------------------------------------------------------------------------- Total Liabilities 350,164 632,505 - ----------------------------------------------------------------------------------------- Stockholders' Deficiency, Share Capital Authorized 50,000,000 common shares, with par value $0.001each Issued 13,642,616 (2000 - 12,873,943) common shares 13,643 12,874 Additional paid-in capital 3,861,733 3,271,163 Advances for stock subscriptions - - Accumulated (deficit) (3,994,699) (3,661,788) Accumulated other comprehensive (loss), unrealized (loss) on securities available for sale (73,921) - - ----------------------------------------------------------------------------------------- Stockholders' (deficiency) (193,244) (377,751) - ----------------------------------------------------------------------------------------- Total liabilities and stockholders' (deficiency) $ 156,920 $ 254,754 - -----------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements 3
- -------------------------------------------------------------------------------------------------- AURORA GOLD CORPORATION & SUBSIDIARIES (An exploration stage enterprise) October 10 Consolidated Statement of Operations 1995 Nine months Nine months (Expressed in U.S. Dollars) (inception) to ended ended (Unaudited) September 30 September 30 September 30 2001 -------------- -------------- (cumulative) 2001 2000 - -------------------------------------------------------------------------------------------------- General and administrative expenses Depreciation and amortization $ 30,449 $ 3,995 $ 3,333 Interest, bank charges and foreign exchange 39,824 663 806 Administrative and general, net of recoveries 602,881 8,312 127,558 Professional fees - accounting and legal 333,582 2,672 51,023 Salaries and consulting fees 852,458 51,328 143,489 ------------------------------------------------ 1,859,194 66,970 326,209 Exploration expenses 1,408,698 6,569 57,509 Write off of mineral property costs 172,981 - - - -------------------------------------------------------------------------------------------------- 3,440,873 73,539 383,718 Less: Other income (loss) Interest income 22,336 192 318 Operating loss of Spun-off operations (576,162) (259,564) - - -------------------------------------------------------------------------------------------------- Net (loss) for the period (3,994,699) (332,911) (383,400) - -------------------------------------------------------------------------------------------------- Loss per share $ (0.02) $ (0.03) - -------------------------------------------------------------------------------------------------- Weighted average number of common shares outstanding - basic and diluted 13,353,731 11,956,962 - --------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements 4
- ------------------------------------------------------------------------------------------------- AURORA GOLD CORPORATION & SUBSIDIARIES (An exploration stage enterprise) October 10 1995 Nine months Nine months Consolidated Statement of Cash Flows (inception) to ended Ended (Expressed in U.S. Dollars) September 30 September 30 September 30 (Unaudited) 2001 -------------- -------------- (cumulative) 2001 2000 - ------------------------------------------------------------------------------------------------- Cash flows from (used in) operating activities Net (loss) for the period $ (3,994,699) $ (332,911) $ (383,400) Adjustments to reconcile net loss to net cash used in operating activities -depreciation and amortization 30,449 3,995 3,333 -compensation on stock options 720,500 - - -expenses satisfied with common stock 407,501 115,301 42,809 -write off of mineral properties 172,981 - - -adjustment for spin-off of subsidiaries 792,536 476,038 - - ------------------------------------------------------------------------------------------------- (1,870,732) 262,423 (337,258) Changes in assets and liabilities -decrease (increase) in receivables (1,316) 225,762 (300) -increase (decrease) in accounts payable 350,164 (282,341) 378,018 - ------------------------------------------------------------------------------------------------- (1,521,884) 205,844 40,460 - ------------------------------------------------------------------------------------------------- Cash flows from (used in) investing activities Purchase of fixed assets (55,383) - (30,582) Proceeds on disposal of fixed assets 14,449 - - Available-for-sale securities (206,978) (206,978) - Mineral property costs (172,981) - (11,500) Incorporation costs (11,511) - - - ------------------------------------------------------------------------------------------------- (432,404) (206,978) (42,082) - ------------------------------------------------------------------------------------------------- Cash flows from (used in) financing activities Proceeds from issuance of common Stock and stock subscription receipts 1,954,839 - 4,050 - ------------------------------------------------------------------------------------------------- 1,954,839 - 4,050 - ------------------------------------------------------------------------------------------------- Increase (decrease) in cash for the period 551 (1,134) 2,428 Cash and cash equivalents, beginning of period - 1,685 2,109 - ------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 551 $ 551 $ 4,537 - -------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements 5 Notes to Interim Consolidated Financial Statements (Unaudited) -------------------------------------------------------------------- 1. Nature of Business and Continuance of Operations 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 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 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. The Company has not generated any operating revenues to date. 2. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-QSB and Article 10 of Regulation S-X and include the accounts of the Company and its wholly-owned subsidiaries Aurora Gold S.A., Aurora Metals (BVI) Limited and Deltango Gold Limited. All inter-company transactions and balances have been eliminated. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine-month month period ended September 30, 2001 are not necessarily indicative of the results that may be expected for the year ended December 31, 2001. The balance sheet at December 31, 2000 has been derived from the audited financial statements at that date. The consolidated financial statements and footnotes thereto included in the Aurora Gold Corporation Annual Report on Form 10-KSB for the year ended December 31, 2000 should be reviewed in connection with these condensed consolidated financial statements. 2. Significant Accounting Policies (a) 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 and assumptions. (b) Fixed Assets Depreciation is based on the estimated useful lives of the assets and is computed using the straight-line method. Fixed assets are recorded at cost. Depreciation is provided over the following useful lives: 6 Computer equipment 2 years Telecommunication equipment 5 years Office equipment 5 years (c) 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 September 30, 2001 and December 31, 2000, the Company did not have proven 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 Costs related to site restoration programs are accrued over the life of the project. (d) 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. (e) Advertising Expenses The Company expenses advertising costs as incurred. There were no advertising expenses incurred by the Company for the periods ended September 30, 2001 and December 31, 2000. (f) Long-Lived Assets Impairment Certain long-term assets of the Company are reviewed when changes in circumstances require as to whether their carrying value has become impaired, pursuant to guidance established in Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of". Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. (g) Accounting for Derivative Instruments and Hedging Activities 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 derivative contracts as either assets or liabilities in 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 7 to the hedged risk or (ii) the 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 derivative contracts either to hedge existing risks or for speculative purposes. The Company does not anticipate that the adoption of the statement will have a significant impact on its financial statements. (h) Income Taxes The Company has adopted Statement of Financial Accounting Standards ("SFAS") No. 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. (i) Loss Per Share Loss per share is computed using the weighted average number of shares outstanding during the year. Effective for the year ended December 31, 1997, the Company adopted SFAS No. 128, "Earnings Per Share". Diluted loss per share is equivalent to basic loss per share. 4 Fixed Assets ------------------------------------------------------------------ September December 30, 2001 31, 2000 ------------------------------------------------------------------ Computer equipment $ 15,125 $ 15,125 Telecommunication equipment 1,875 1,875 Office equipment 13,583 13,583 ------------------------------------------------------------------ 30,583 30,583 Accumulated depreciation and amortization (8,587) (4,592) ------------------------------------------------------------------ $ 21,996 $ 25,991 ================================================================== 5. Mineral Properties and Exploration Expenses A summary of cumulative exploration expenditures is as follows:
- ------------------------------------------------------------------------------------------------------- Accumulated Accumulated Balance Balance December 31 Cost September 2000 Additions Write Off Recovery Spin off 30, 2001 - ------------------------------------------------------------------------------------------------------- Property exploration Expenditures: Canada - Cape Breton 96,186 - - - - 96,186 Canada - Kumealon 3,196 880 - - - 4,076 Canada - Yukon owned 443,118 - - - (443,118) - by Deltango Gold Ltd., Spin-off Guatemala 255,034 4,689 - - - 259,723 Tunisia, owned by Aurora Metals (BVI) Limited, Spin-off - - - - - - United States - Totem Talc 51,201 - - - - 51,201 8 Project assessment and exploration expenditures 553,394 1,000 - - - 554,394 - ------------------------------------------------------------------------------------------------------- Total $ 1,402,129 $ 6,569 $ - $ - $(443,118) $ 965,580 ======================================================================================================= A summary of property acquisition costs is as follows: - ------------------------------------------------------------------------------------------------------- Accumulated Accumulated Balance Balance December 31 Cost September 1999 Additions Write Off Recovery Spin off 30, 2001 - ------------------------------------------------------------------------------------------------------- Property acquisition expenditures: Canada - Kumealon $ 23,630 $ - $ (23,630) $ - $ - $ - Guatemala 103,941 - (103,941) - - - Tunisia, owned by Aurora Metals (BVI) Limited, Spin-off 15,000 - - - (15,000) - United States - Totem Talc 6,000 - (6,000) - - - - ------------------------------------------------------------------------------------------------------- Total $ 148,571 $ - $ (133,571) $ - $ (15,000) $ - ======================================================================================================= A summary of cumulative exploration expenditures is as follows: Property exploration Expenditures: Canada - Cape Breton 96,186 - - - - 96,186 Canada - Kumealon 2,286 910 - - - 3,196 Canada - Yukon 407,319 113,400 - (77,601) - 443,118 Guatemala 248,241 6,793 - - - 255,034 Tunisia, owned by Aurora Metals (BVI) Limited, Spin-off 93,362 156,356 - - (249,718) - United States - Totem Talc 51,201 - - - - 51,201 Project assessment and exploration expenditures 487,842 65,552 - - - 553,394 - ------------------------------------------------------------------------------------------------------- Total $ 1,386,437 $ 343,011 $ - $ (77,601) $(249,718) $ 1,402,129 =======================================================================================================
6. Loans Payable Loans payable are unsecured, non-interest bearing and due on demand. 7. Spin-off of Deltango Gold Limited On April 2, 2001 the Company completed the spin-off of its wholly owned subsidiary Deltango Gold Limited ("Deltango"). Deltango was spun off to the management of Deltango for $0 consideration. Deltango's management will assume all current ($217,332) and future debt and liabilities of Deltango Gold Limited. 9 The Consolidated Financial Statements for the nine-month period ended September 30, 2001 have been prepared to reflect the spin-off of Deltango at book value. Accordingly, expenses and cash flows of the spun off Deltango have been segregated in the Consolidated Statements of Operations and Cash Flows for the nine-month period ended September 30, 2001. The historical carrying amount of the net deficiency transferred to Deltango on the spin-off date has been recorded as additional paid-in capital of $476,038. The $259,564 of loan owed to the Company by Deltango was written down to $0. The effect of the transfer is reflected in the Consolidated Balance Sheet. Following is the summarized financial information for the Spun-off operations:
- ---------------------------------------------------------------------------------- Cumulative from From January 1 February 12, 1999 2001 (inception of Deltango) to April 2 to April 2, 2001 2001 - ---------------------------------------------------------------------------------- General and administrative expenses $ 32,920 $ - Exploration expenses 443,118 - - ---------------------------------------------------------------------------------- Operating Loss $ 476,038 $ - - ---------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------- April 2, 2001 - ---------------------------------------------------------------------------------- Total assets $ 858 Total liabilities (476,896) - ---------------------------------------------------------------------------------- Net deficiency of Deltango Gold Limited $ (476,038) - ----------------------------------------------------------------------------------
8. Outstanding Options At September 30, 2001 and December 31, 2000 the Company had No options outstanding. 9. Related Party Transactions Related party transactions not disclosed elsewhere in these financial statements include: a) Included in accounts payable is $590 (2000 - $213,647) due to directors, a former director and a company controlled by a director in respect of salaries, consulting fees and reimbursement for expenses. b) During the nine-month period ended September 30, 2001, salaries and consulting fees of $51,328 (2000 - $207,200) were paid or are payable to directors, a former director and a company controlled by 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. 10. Non-Cash Investing and Financing Activities In April 2001, the Company settled $115,301 of debts with the issuance of 768,673 shares of common stock at $0.15 per share. Indebtedness of directors totaling $30,301 was settled with the issuance of 202,007 shares of common stock. The carrying value of the indebtedness approximated the fair value of the common shares issued. 10 11. Reclassifications Certain reclassifications of prior-year balances have been made to conform to current year classifications. - -------------------------------------------------------------------------------- ITEM 2. MANAGEMENT'S' DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (A) General The Company is a mineral exploration company based in Vancouver, Canada and is engaged in the exploration for precious metals. The Company was incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp.". On August 20, 1996 the Company changed its name to Aurora Gold Corporation and is an exploration stage enterprise. This document contains numerous forward-looking statements relating to the Company's business. The United States Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. Operating, exploration and financial data, and other statements in this document are based on information the company believes reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, changes that could result from the Company's future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, and risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. The Company disclaims any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise. 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 nine-month period ended September 30, 2001 On January 29, 2001 Aurora Metals (BVI) Limited signed a Subscription Agreement with Billiton E&D 3 B.V. and an Option Agreement with Billiton UK Resources B.V., both subsidiaries of Billiton plc ("Billiton"), for funding of exploration for zinc on the Hammala and Kebbouch District Exploration Permits in Northern Tunisia, North Africa. Closing occurred on February 8, 2001. Under the terms of the agreements: (i) Billiton, through its subsidiary, Billiton E&D 3 B.V., made a private placement in Aurora Metals (BVI) Limited of $600,000 by purchasing 857,143 newly issued Units at a price of $0.70 with each Unit comprising of a common share and a purchase warrant, exercisable for a period of one year at $0.85, which if exercised would result in further proceeds of $728,571; (ii) Aurora Metals (BVI) Limited undertook to spend $475,000 of the private placement on exploration on Hammala Exploration Permit and the ten other Exploration Permits in the Kebbouch District owned by Aurora Metals (BVI) Limited; (iii) after the proceeds of the initial private placement are expended, Billiton, through its subsidiary, can elect to exercise a First Option whereby it can earn a 51% interest in the Property by spending $1.0 million over the ensuing two years; (iv) following the exercise of the First Option and satisfaction of the earn-in, Aurora Metals (BVI) Limited and Billiton UK Resources B.V. will form a Joint Venture and will pro rata fund further expenditures on exploration of the Property; (v) prior to the expenditure under the Joint Venture Phase reaching $2.0 million, Billiton, through its subsidiary, can elect to exercise a Second Option to earn a further 19%, i.e. to reach a total of 70%, by providing financing for all further work including, but not limited to, Pre-feasibility and Feasibility studies, engineering, mine development and construction through to commercial production. Aurora Metal (BVI) Limited's pro rata share of these costs will be repaid from Aurora Metal (BVI) Limited's share of cash flow; and (vi) Aurora Metals (BVI) Limited will be the Operator from the outset and will also undertake regional geological investigations in the country. On March 9, 2001 the Company completed the spin-off of its wholly owned subsidiary Aurora Metals (BVI) Limited when it distributed 12,873,943 shares of Aurora Metals (BVI) Limited to the Company's shareholders of 11 record on June 15, 2000 as a stock dividend. Upon completion of the spin-off the Company returned 126,057 (13,000,000 - 12,873,943) shares of Aurora Metals (BVI) Limited common stock back to Aurora Metals (BVI) Limited's treasury for cancellation. The 13,000,000 shares of common stock of Aurora Metals (BVI) Limited represented the entire outstanding and issued common stock of Aurora Metals (BVI) Limited. As a result of the distribution of Aurora Metals (BVI) Limited shares to the shareholders of the Company, Aurora Metals (BVI) Limited is no longer a subsidiary of the Company. On March 9, 2001 Aurora Metals (BVI) Limited had 13,731,086 common shares outstanding and 857,143 share purchase warrants outstanding as a result of the issuance of 857,143 common shares to Billiton E&D 3 B.V., in a private placement that closed on February 8, 2001. The Company's Consolidated Financial Statements for the year ended December 31, 2000 reflected the spin-off of Aurora Metals (BVI) Limited at book value. Accordingly, expenses and cash flows of the spun-off Aurora Metals (BVI) Limited were segregated in the Consolidated Statements of Operations and Cash Flows for the year ended December 31, 2000. The historical carrying amount of the net deficiency transferred to Aurora Metals (BVI) Limited on the spin-off date (net of initial investment of $100) were recorded as additional paid-in capital of $316,498 at December 31, 2000. Included in the net deficiency transferred at September 15, 2000 was a $226,778 of loan owed to the Company by Aurora Metals (BVI) Limited. On April 2, the Company completed the spin-off of its wholly owned subsidiary Deltango Gold Limited. Deltango Gold Limited was spun-off to the management of Deltango Gold Limited for $0 consideration. Deltango Gold Limited's management will assume all current ($217,332) and future debt and liabilities of Deltango Gold Limited. The $259,564 of loan owed to the Company by Deltango Gold Limited was written down to $0. On May 4, 2001 Mr. David Jenkins resigned from the Board of Directors and as President of the Company to pursue other interests. On May 4, 2001 Mr. Cameron Richardson was appointed to the Board of Directors of the Corporation and President of the Company. In July 2001 Aurora Metals (BVI) Limited settled $206,978 of indebtedness to the Company with the issue of 295,683 shares of common stock of Aurora Metals (BVI) Limited at a deemed value of $0.70 per share. (C) EXPLORATION AND DEVELOPMENT The Company conducts exploration activities from its headquarters in Vancouver, Canada. The Company owns or controls unpatented mining claims, and mineral exploration concessions, in British Columbia Canada; and Guatemala. The Company's strategy is to concentrate its investigations into: (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. The Company is currently concentrating its exploration activities in Canada and Guatemala. The Company is also examining other exploration properties in Mexico, North Africa and the United States of America. Exploration expenses on the British Columbia Kumealon limestone prospect totalled $880 during the nine-months ended September 30, 2001 (fiscal 2000 - $910). Exploration expenses in Guatemala during the nine-months ended September 30, 2001 totalled $4,689 (fiscal 2000 - $6,793). The Company's exploration work program in 2001 will entail surface mapping of geology, sampling of soils on a grid basis to delineate geochemical anomalies, stream sediment sampling and geophysical surveying. The data assembled from this work will be used to determine whether: (i) further exploration is warranted; or (ii) whether certain mineral exploration concession licenses and mineral reconnaissance license should be surrendered. All of the Company's properties are in the exploration stages 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 the Company's mineral exploration and development activities will result in any discoveries of commercially viable bodies of mineralization. The long-term profitability of the 12 Company's operations will be, in part, directly related to the cost and success of its exploration programs, which may be affected by a number of factors. (D) Financial Information Nine-Months Ended September 30, 2001 versus Nine-Months Ended September 30, 2000 Net Loss: For the nine-months ended September 30, 2001 the Company recorded a loss of $332,911 or $0.02 per share, compared to a loss of $383,400 or $0.03 per share in 2000. Revenues: The Company had no operating revenues for the nine-month period ended September 30, 2001 (2000 - $0). Costs and Expenses: General and administrative expenses - For the nine-months ended September 30, 2001 the Company recorded general and administrative expenses of $8,312 compared to $127,558 in 2000. $113,000 of the September 30, 2000 expenses relate to project research, development and travel. Professional fees - accounting and legal - For the nine-months ended September 30, 2001 the Company recorded legal fees of $1,266 compared to $39,867 in 2000. $23,400 of the $39,867 September 30, 2000 legal fees relate to Tunisia and the establishment of Aurora Metals (BVI) Ltd. For the nine-months ended September 30, 2001 the Company recorded accounting fees of $1,406 compared to $11,156 in 2000. Exploration expenditures - For the nine-months ended September 30, 2001 the Company recorded exploration expenses of $6,569, compared to $57,509 in 2000. The following is a breakdown of the exploration expenses by property: - Canada, Kumealon property $880 (fiscal 2000 - $910), Guatemala $4,689 (fiscal 2000 - $6,793), and Project assessment and exploration expenditures of $1,000 (fiscal 2000 - $75,187). (E) Financial Condition and liquidity At September 30, 2001, the Company had cash of $551 (2000 - $4,537) and working capital deficiency of $215,240 (2000 working capital deficiency - $587,265) respectively. Total liabilities as of September 30, 2001 were $350,164 (2000 - $592,102) a decrease of $241,938. Net cash used in operating activities in the nine-month period ended September 30, 2001 was $205,844 compared to $40,460 in the nine-month period ended September 30, 2000. Net cash used in investing activities in the nine-month period ended September 30, 2001 consisted of additions to mineral properties $0 (2000 - $11,500) and additions to fixed assets $0 (2000 - $30,582). The Company does not have sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 2001 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. 13 The Company has not declared or paid a cash dividend on its shares since incorporation and does not anticipate doing so in the foreseeable future. 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 During the nine-months ended September 30, 2001, the Company settled $115,301 of debts with the issuance of 768,673 shares of common stock at $0.15 per share. 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. * 10.11 January 29, 2001 Subscription Agreement between Aurora Metals (BVI) Limited and Billiton E&D 3 B.V.* 10.12 January 29, 2001 Option Agreement between Aurora Metals (BVI) Limited and Billiton UK Resources B.V.* - -------- 14 * Previously Filed (b) Reports on Form 8-K 1. Change in registrant's certifying accounts (filed May 16, 2000) * 2. Disposition of assets (filed September 2, 2000) * * Previously Filed SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. Date: November 12, 2001 BY: /s/ Cameron Richardson ----------------- ---------------------- Cameron Richardson Director and President Date: November 12, 2001 BY: /s/ John A.A. James ----------------- ------------------- John A.A. James Director and Vice-President 15 -----END PRIVACY-ENHANCED MESSAGE-----