-----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, Gpnzdb40fnIXzIw08+OU9rVbMUwqDDlLYy5Z5LGtFjPiEkdbXYWnF8N8DiHUP9we Pces+0CPKTC0BXhMg5aQSw== 0001140361-05-008601.txt : 20051025 0001140361-05-008601.hdr.sgml : 20051025 20051025153907 ACCESSION NUMBER: 0001140361-05-008601 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051025 DATE AS OF CHANGE: 20051025 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: 051154397 BUSINESS ADDRESS: STREET 1: PO BOX 3711 STN TERMINAL STREET 2: 349 WEST GEORGIA STREET, VANCOUVER CITY: BC CANADA V6B 3Z1 STATE: A1 ZIP: 00000 BUSINESS PHONE: 604-687-4432 MAIL ADDRESS: STREET 1: PO BOX 3711 STN TERMINAL STREET 2: 349 WEST GEORGIA STREET, VANCOUVER CITY: BC CANADA V6B 3Z1 STATE: A1 ZIP: 00000 10QSB 1 body.txt AURORA GOLD CORPORATION 10-QSB 09-30-2005 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, 2005 ------------------ [_] 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 (IRS Employer or organization) Identification No.) 30 Ledgar Road, Balcatta, WA 6021 Australia - ------------------------------------------- (Address of principal executive offices) (+61 8) 9240-2836 - ----------------- (Issuer's Telephone Number) 238 West 4th Street, Suite 2, North Vancouver, B.C., Canada V7M 1H7 - ------------------------------------------------------------------- (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 past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES [_] NO [X] 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: 36,193,522 shares of Common Stock were outstanding as of September 30, 2005. 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 Balance Sheets -- 3 September 30, 2005 and December 31, 2004 (audited) Statements of Operations -- 4 Nine-months Ended September 30, 2005 Statements of Cash Flows -- 5 Nine-months Ended September 30, 2005 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3. Controls and Procedures 13 PART II. Other Information Item 1. Legal Proceedings 13 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 13 Item 3. Defaults Upon Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14
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AURORA GOLD CORPORATION (An exploration stage enterprise) Balance Sheets September 30, 2005 and December 31, 2004 (audited) (Expressed in U.S. Dollars) September 30 December 31 (Unaudited) 2005 2004 - --------------------------------------------------------------------------------------------- ASSETS Current assets Cash $ 527,791 $ 1,275 Accounts receivables 127,712 200 - --------------------------------------------------------------------------------------------- Total current assets 566,747 1,475 Equipment 993 3,937 - --------------------------------------------------------------------------------------------- Total assets $ 656,496 $ 5,412 ============================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued liabilities $ 110,435 $ 29,354 Accounts payable - related party - 121,942 Loan payable - related party - 39,000 - --------------------------------------------------------------------------------------------- Total liabilities 110,435 190,296 ============================================================================================= Stockholders' Equity (Deficiency) Share capital Authorized: 50,000,000 common shares, with par value $0.001each Issued: 36,193,522 (December 31, 2004 - 19,534,431) common shares 36,193 19,534 Additional paid-in capital 4,580,662 3,786,321 Accumulated (deficit) (4,070,794) (3,990,739) - --------------------------------------------------------------------------------------------- Stockholders' equity (deficiency) 546,061 (184,884) - --------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity (deficiency) $ 656,496 $ 5,412 ============================================================================================= The accompanying notes are an integral part of these financial statements
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AURORA GOLD CORPORATION (An exploration stage enterprise) Cumulative Statements of Operations October 10 Three months Three months Nine months Nine months (Expressed in U.S. Dollars) 1995 (inception) Ended Ended Ended Ended (Unaudited) to September 30 September 30 September 30 September 30 September 30 2005 2005 2004 2005 2004 - ------------------------------------------------------------------------------------------------------------------------------ General and administrative expenses Administrative and general $ 705,432 $ 3,691 $ 202 $ 13,366 $ 12,604 Depreciation and amortization 53,960 771 930 2,944 2,737 Imputed interest on loan payable - related party 1,560 - - - - Interest, bank charges and foreign exchange loss (gain) 43,774 723 33 667 586 Professional fees - accounting and legal 371,100 4,186 3,355 5,303 5,310 Property search and negotiation 190,441 1,137 17,219 5,040 30,601 Salaries and consulting fees 944,776 679 - 30,679 - - ------------------------------------------------------------------------------------------------------------------------------ 2,311,043 11,187 21,739 57,999 51,838 Exploration expenses 1,557,171 92,679 - 94,715 1,969 Writeoff of mineral property costs 172,981 - - - - - ------------------------------------------------------------------------------------------------------------------------------ 4,041,195 103,866 21,739 152,714 53,807 - ------------------------------------------------------------------------------------------------------------------------------ Other income (loss) Gain on disposition of subsidiary 216,474 - - - - Interest income 22,353 - - - - Finders fees 80,928 17,338 - 80,928 - (Loss) on sale of investments (32,756) - - (8,269) - Operating (loss) of Spun-off operations (316,598) - - - - - ------------------------------------------------------------------------------------------------------------------------------ (29,599) 17,338 - 72,659 - - ------------------------------------------------------------------------------------------------------------------------------ Net (loss) for the period (4,070,794) (86,528) (21,739) (80,055) (53,807) ============================================================================================================================== Earnings (loss) per share - basic and diluted $ (0.00) $ (0.00) $ (0.00) $ (0.00) ============================================================================================================================== Weighted average number of common shares outstanding - basic and diluted 24,222,432 19,523,808 24,222,432 19,523,808 ============================================================================================================================== The accompanying notes are an integral part of these financial statements
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AURORA GOLD CORPORATION (An exploration stage enterprise) Cumulative Statements of Cash Flows October 10 Nine Months Nine Months (Expressed in U.S. Dollars) 1995 (inception) Ended Ended (Unaudited) to September 30 September 30 September 30 2005 2005 2004 - ----------------------------------------------------------------------------------------------------------------- Cash flows from (used in) operating activities Net income (loss) for the period $ (4,070,794) $ (80,055) $ (53,807) Adjustments to reconcile net loss to net cash used in operating activities: -depreciation and amortization 53,960 2,944 2,737 -compensation on stock options 720,500 - - -expenses satisfied with common stock 690,292 161,000 - -imputed interest on loan payable - related party 1,560 - - -writeoff of mineral property costs 172,981 - - -adjustment for spin-off of Aurora Metals (BVI) Limited 316,498 - - -realized (gain) loss on sale of marketable securities 32,756 8,269 - Changes in assets and liabilities: -(increase) decrease in available-for-sale securities (57,635) (57,635) - -(increase) decrease in receivables (334,690) (127,512) 1,996 -increase (decrease) in accounts payable 528,592 (40,861) 15,689 - ----------------------------------------------------------------------------------------------------------------- Net cash flow used in operating activities (1,945,980) (133,850) (33,385) - ----------------------------------------------------------------------------------------------------------------- Cash flows from (used in) investing activities Purchase of equipment (57,891) - (2,508) Proceeds on disposal of equipment 14,449 - - Proceeds from disposition of marketable securities 49,366 49,366 - Acquisition of mineral property costs (172,981) - - Payment for incorporation cost (11,511) - - - ----------------------------------------------------------------------------------------------------------------- Net cash flow used in investing activities (178,568) 49,366 (2,508) - ----------------------------------------------------------------------------------------------------------------- Cash flows from financing activities Proceeds from issuance of common stock less issuance costs 2,652,339 650,000 - Loan proceeds (repayments) from related party - (39,000) 22,500 - ----------------------------------------------------------------------------------------------------------------- Net cash flow provided by financing activities 2,652,339 611,000 22,500 - ----------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 527,791 526,516 (13,393) Cash and cash equivalents, beginning of period - 1,275 15,327 - ----------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 527,791 $ 527,791 $ 1,934 ================================================================================================================= 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 unaudited interim financial statements have been prepared in accordance with United States generally accepted accounting principles ("US GAAP") 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 interim condensed financial statements have been prepared in United States dollars and in accordance with US GAAP for interim financial information and with the instructions for Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all the information and disclosures required by US GAAP for annual financial statements. The accounting policies used in the preparation of the accompanying unaudited interim financial statements are the same as those described in our audited financial statements and notes thereto for the year ended December 31, 2004. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results for the periods presented have been reflected in these financial statements. These unaudited interim financial statements should be read in conjunction with the audited annual financial statements and the notes thereto for the year ended December 31, 2004. Operating results for the three month and nine month periods ended September 30, 2005 are not necessarily indicative of the results that may be expected for the year ended December 31, 2005. The balance sheet at December 31, 2004 has been derived from the audited financial statements at that date. 3. Significant Accounting Policies (a) Accounting Estimates The preparation of financial statements in conformity with US GAAP 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. 6 (b) Equipment 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:
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, 2005 and December 31, 2004, 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 has adopted the fair value method of accounting for stock-based compensation as recommended by the Statement of Financial Accounting Standards No. 123 (SFAS 123), Accounting for Stock-based Compensation. The Company did not grant any stock options during the period. (e) Advertising Expenses The Company expenses advertising costs as incurred. The Company did not incur any advertising expenses for the nine months ended September 30, 2005 and the year ended December 31, 2004. (f) Long-Lived Assets Impairment Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in accordance with the Statement of Financial Accounting Standards No. 144 (SFAS 144), Accounting for the Impairment or Disposal of Long-Lived Assets. An impairment loss would be recognized when the carrying amount of an asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The amount of the impairment loss to be recorded is calculated by the excess of the asset's carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis. (g) Accounting for Derivative Instruments and Hedging Activities The Company has adopted the Statement of Financial Accounting Standards No. 133 (SFAS 133) Accounting for Derivative Instruments and Hedging Activities, which 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 7 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. 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 the Statement of Financial Accounting Standards No. 109 (SFAS 109), Accounting for income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the differences between the financial statement carry amounts and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. (i) Loss Per Share Earnings (loss) per share is computed using the weighted average number of shares outstanding during the year. The Company has adopted Statement of Financial Accounting Standards No. 128 (SFAS 128), Earnings Per Share. Diluted loss per share is equivalent to basic loss per share because there is no potential dilutive securities. 4 Fixed Assets
------------------------------------------------------------------------ September 30 December 31 2005 2004 ------------------------------------------------------------------------ Computer equipment $ 2,508 $ 2,508 Telecommunication equipment 1,875 1,875 Office equipment 13,583 13,583 ------------------------------------------------------------------------ 17,966 17,966 Accumulated depreciation and amortization (16,973) (14,029) ------------------------------------------------------------------------ $ 993 $ 3,937 ========================================================================
5 Common shares outstanding As at September 30, 2005, the Corporation's authorized capital stock consists of 50,000,000 common shares with a par value of $0.001 per share. There were 36,193,522 common shares issued and outstanding at September 30, 2005 (December 31, 2004 - 19,534,431). 6. Stock Options Outstanding At September 30, 2005 and December 31, 2004 the Company had no options outstanding. 7. Related Party Transactions Related party transactions not disclosed elsewhere in these financial statements include: During the nine month period ended September 30, 2005, salaries and consulting fees of $30,679 (2004 - $0) were paid or are payable to directors. 8 Except as otherwise noted, these transactions are recorded at the exchange amount, being the value established and agreed to by the related parties. 8. 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 This portion of the Quarterly Report provides management's discussion and analysis of the financial condition and results of operations to enable a reader to assess material changes in financial condition and results of operations as at and for the three and nine month periods ended September 30, 2005, in comparison to the corresponding prior-year periods. This MD&A has been prepared as of October 24, 2005. This MD&A is intended to supplement and complement the unaudited interim consolidated financial statements and notes thereto, prepared in accordance with US GAAP, for the three and nine month periods ended September 30, 2005 (collectively, the "Financial Statements"), which are included in this Quarterly Report. The reader is encouraged to review the Financial Statements in conjunction with your review of this MD&A. This MD&A should be read in conjunction with both the annual audited financial statements for the two years ended December 31, 2004 and the related annual MD&A included in the December 31, 2004 Form 10-KSB on file with the US Securities and Exchange Commission. Certain notes to the Financial Statements are specifically referred to in this MD&A and such notes are incorporated by reference herein. All dollar amounts in this MD&A are in US dollars, unless otherwise specified. For the purposes of preparing this MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Aurora Gold Corporation's shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision, or if it would significantly alter the total mix of information available to investors. Materiality is evaluated by reference to all relevant circumstances, including potential market sensitivity. This document contains numerous forward-looking statements relating to 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. (B) Significant developments during the nine month period ended September 30, 2005 and Subsequent Events During 2005 we have been evaluating our property holdings in order to determine whether to implement exploration programs on our existing properties or to acquire interests in new properties. To date, in 2005 we have conveyed our interests in our Matupa Gold Project to Crescent Resources Corp. Under the terms of the Agreement, Crescent agreed to pay Aurora (a) US $100,000; (b) issue 300,000 common shares of Crescent to us and (c) pay US $20,000 of the direct out-of-pocket costs we incurred in connection with the 9 Matupa Gold Project. As of October 7, 2005 all cash payments and shares have been received from Crescent and all finder's fees due on the Matupa Agreement have been paid to a private United Kingdom citizen. Additionally, in March 2005 we dropped our options with Full Medal Minerals Ltd. to acquire an interest in three mineral exploration properties, the Lucky Shot Property in the Palmer Recording District, the Gunsite Property in the Talkeetna Recording District and the Zackly Property in the Talkeetna Recording District, all located in the State of Alaska, United States. On July 13, 2005 the Company completed a Private Placement of 13,000,000 common shares priced at USD $0.05 per share for a total consideration of USD $650,000 to non-affiliated offshore investors pursuant to the exemption from registration requirements of the Securities Act of 1933 as amended afforded by Regulation S as promulgated by the Act. The private placement was offered between June 15, 2005 and July 13, 2005. Following the closing of this private placement, the Company has 36,193,522 common shares issued and outstanding. On October 12, 2005 the Company announced that it had entered into an option agreement over the Novo Porto project area, Tapajos gold province in the south westerly part of Para state, Brazil. The option agreement covers two exploration licenses, Santa Clara and Novo Porto and covers an area of approximately 34,000 hectares. The option agreement allows the Company to earn a 100% interest in the two exploration licenses via cash payments and leaving the vendors with a 2% NSR. The total option agreement payments for the two licenses are structured as follows: November 15, 2005 - USD $25,000; May 15, 2006 - USD $75,000; May 15, 2007 - USD $100,000 and May 15, 2008 - USD $150,000. The Company may withdraw from the option agreement at any time. Should the Company decide to pursue either or both exploration licenses after May 15, 2009 then a final payment of USD $1,850,000 per license for a total of USD $ 3,700,000 would be paid. The total payment for one license is USD $2,200,000 and for the two licenses is USD $4,050,000. (C) Exploration and Development The Company is a mineral exploration company with its administrative office based in Vancouver, Canada and its technical office based in Balcatta, Western Australia and is engaged in the exploration for base, industrial and precious metals. The Company owns or controls two exploration licences in Brazil and unpatented mining claims in British Columbia, Canada. The Company has commenced a reconnaissance exploration program on the Novo Porto Project, Brazil, consisting of a rock chip and outcrop-sampling program together with a close spaced soil geochemistry program to delineate anomalous targets for follow up drill testing. The Company's Novo Porto exploration programs will be targeting large tonnage, low to medium grade gold deposits. We expect initial results from the sampling and geochemistry program within the next 2 months. The Company is currently concentrating its exploration activities in Brazil. The Company is also examining data relating to the potential acquisition of other exploration properties in Latin America, and South America. For the nine months ended September 30, 2005 the Company recorded exploration expenses of $94,715 compared to $1,969 in fiscal 2004. The following is a breakdown of the exploration expenses by property: United States, Alaska $0 (2004 - $0); Brazil $112,679 less cost recovery of $20,000 (2004 - $0) and Canada, Kumealon property $2,036 (2004 - $1,969). The Company's properties are in the exploration stage only and are without a known body of Mineral Reserves. Development of the properties will follow only if satisfactory exploration results are obtained. Mineral exploration and development involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. There is no assurance that 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 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. 10 (D) Results of Operations (a) Nine Months Ended September 30, 2005 (Fiscal 2005) versus Nine Months Ended September 30, 2004 (Fiscal 2004) The Company issued 13,000,000 common shares (2004 - 100,000) for cash of $650,000 (2004 - $25,000) and issued 3,659,091 (fiscal 2004 - 0) shares to settle debts of $161,000 (fiscal 2004 - $0). The Company had no operating revenues for the nine month period ended September 30, 2005 (fiscal 2004 - $0). For the nine months ended September 30, 2005 the Company recorded a net loss of $80,055 or $0.00 per share, compared to a net loss of $53,807 ($0.00 per share) in 2004. General and administrative expenses - For the nine month period ended September 30, 2005 the Company recorded general and administrative expenses of $57,999 (fiscal 2004 - $51,838). The fiscal 2005 amount includes, professional fees - accounting $404 (fiscal 2004 - $3,079) and legal $4,899 (fiscal 2004 - $2,231). Exploration expenditures - For the nine month period ended September 30, 2005 the Company recorded exploration expenses of $94,715 compared to $1,969 in fiscal 2004. The following is a breakdown of the exploration expenses by property: United States, Alaska $0 (2004 - $0); Brazil $112,679 less cost recovery of $20,000 (2004 - $0) and Canada, Kumealon property $2,036 (2004 - $1,969); Amortization expenditures - For the nine month period ended September 30, 2005 the Company recorded depreciation costs of $2,944 (fiscal 2004 - $2,737). (b) Nine Months Ended September 30, 2004 (Fiscal 2004) versus Nine Months Ended September 30, 2003 (Fiscal 2003) The Company issued 100,000 common shares for cash of $25,000 (2003 - 0) and issued 0 (fiscal 2003 - 746,750) shares to settle debts of $0 (fiscal 2003 - $37,336). The Company had no operating revenues for the nine month period ended September 30, 2004 (fiscal 2003 - $0). For the nine months ended September 30, 2004 the Company recorded a loss of $53,807 or $0.00 per share, compared to a loss of $13,290 ($0.00 per share) in 2003. General and administrative expenses - For the nine month period ended September 30, 2004 the Company recorded general and administrative expenses of $51,838 (fiscal 2003 - $11,700). The fiscal 2004 amount includes, professional fees - accounting $3,079 (fiscal 2003 - $1,703) and legal $2,231 (fiscal 2003 - $0). Exploration expenditures - For the nine month period ended September 30, 2004 the Company recorded exploration expenses of $1,969, compared to $1,595 in fiscal 2003. The following is a breakdown of the exploration expenses by property: - Canada, Kumealon property $1,969 (fiscal 2003 - $1,595); Amortization expenditures - For the nine month period ended September 30, 2004 the Company recorded depreciation costs of $2,737 (fiscal 2003 - $2,319). (E) Capital Resources and Liquidity At September 30, 2005 the Company had cash of $527,791 (2004 - $1,934) and a working capital of $545,068 (fiscal 2004 working capital deficiency - $21,354) respectively. Total liabilities as of September 30, 2005 were $110,435 (fiscal 2004 - $23,488), an increase of $86,947. During the nine month period ended September 30, 2005 the Company issued 13,000,000 common shares (2004 - 100,000) for cash of $650,000 (fiscal 2004 - 11 $25,000) and issued 3,659,091 (fiscal 2004 - 0) shares to settle debts of $161,000 (fiscal 2004 - $0). During the nine month period ended September 30, 2005 investing activities consisted of additions to mineral properties $0 (fiscal 2004 - $0) and additions to fixed assets $0 (fiscal 2004 - $2,508). For the nine month period ended September 30, 2005 the Company recorded net loss of $80,055 ($0.00 per share), compared to a net loss of $53,807 ($0.00 per share) in 2004 and a loss of $13,290 ($0.00 per share) in 2003. The Company has sufficient working capital to (i) pay its administrative and general operating expenses through December 31, 2005 and (ii) to conduct its preliminary exploration programs. However, 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. 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. 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. (F) Plans for the Years 2005 and 2006 During the next 12 months the Company intends to raise additional funds through equity offerings and/or debt borrowing to meet its administrative/general operating expenses, conduct preliminary exploration programs on the Novo Porto property in Brazil and the Kumealon limestone property in British Columbia Canada and examine data relating to the potential acquisition or joint venturing of additional mineral properties in either the exploration or development stage in Latin America and South America. Additional employees will be hired on a consulting basis as required by the exploration projects. The Company's exploration work programs in 2005 on the Novo Porto property in Brazil and the Kumealon limestone property in British Columbia Canada 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 these work programs will be used to determine whether: (i) further exploration and diamond core drilling is warranted and if so the sites for initial holes; or (ii) whether certain exploration licenses or claim blocks should be surrendered. (G) Application of Critical Accounting Policies The accounting policies and methods we utilize in the preparation of our consolidated financial statements determine how we report our financial condition and results of operations and may require the management of the Company to make estimates or rely on assumptions about matters that are inherently uncertain. The Company's accounting policies are described in note 2 to its December 31, 2004 financial statements. The Company's accounting policies relating to depreciation and amortization of property, plant and equipment are critical accounting policies that are subject to estimates and assumptions regarding future activities. See note 3(c) Significant Accounting Policies - Mineral Properties and Exploration Expenses in the notes to the Interim Financial Statements for the Company's policy on exploration costs and expenses. US GAAP require the Company to consider at the end of each accounting period whether or not there has been an impairment of the capitalized property, plant and equipment. This assessment is based on whether factors that may indicate the need for a write-down are present. If the Company determines there has been an impairment, then the Company would be required to write-down the recorded value of its property, plant and equipment costs which would reduce the Company's earnings and net assets. (H) Off-balance Sheet Arrangements and Contractual Obligations The Company does not have any off-balance sheet arrangements or contractual obligations that are likely to have or are reasonably likely to have a material current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in the Company's financial statements. 12 (I) Market Risk Disclosures The Company has not entered into derivative contracts either to hedge existing risks or for speculative purposes. ITEM 3. Controls and Procedures The principal executive and principal financial officers of the Company have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report (evaluation date) and have concluded that the disclosure controls and procedures are adequate and effective based upon their evaluation as of the evaluation date. There were no significant changes in our controls or in other factors that could significantly affect these internal controls subsequent to the date of the most recent evaluation. 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 The Company issued 13,000,000 common shares (2004 - 100,000) for cash of $650,000 (2004 - $25,000) and issued 3,659,091 (fiscal 2004 - 0) shares to settle debts of $161,000 (fiscal 2004 - $0). 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:
3.1.1 Certificate of Incorporation* 3.1.2 Certificate of Amendment to the Certificate of Incorporation* 3.1.3 Certificate of Restoration and Renewal of Certificate of Incorporation* 3.2.1 By-laws* 3.2.2 Amended and Restated By-laws* 13.1 Form 10-KSB for the Year Ended December 31, 2004* 13.2 Form 10-QSB for the Quarter ended March 31, 2005* 13.3 Form 10-QSB for the Quarter ended June 30, 2005* 16. Letter on change of certifying accountant* 31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 13 32.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley Act of 2002 99.1 Corporate Governance Principles*
- -------- * Previously Filed (b) Reports on Form 8-K
8-K filed March 21, 2005 Item 1.01 Entry into a Material Definitive Agreement * 8-K filed March 24, 2005 Item 1.02 Termination of a Material Definitive Agreement * 8-K filed June 16, 2005 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers * 8-K filed July 5, 2005 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers * 8-K filed July 13, 2005 Item 3.02 Unregistered Sales of Equity Securities * 8-K filed October 13, 2005 Item 1.01 Entry into a Material Definitive Agreement *
- -------------------------------------------------------------------------------- SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Aurora Gold Corporation ----------------------- Registrant Date: October 24, 2005 BY: /s/Cameron Richardson ---------------- --------------------- Cameron Richardson Director and President Date: October 24, 2005 BY: /s/Antonino Cacace ---------------- ------------------ Antonino Cacace Director 14 EX-31.1 2 ex31_1.txt EXHIBIT 31.1 Exhibit 31.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, A. Cameron Richardson, certify that: 1. I have reviewed this interim report on Form 10-QSB of Aurora Gold Corporation; 2. Based on my knowledge, this interim report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this interim report; 3. Based on my knowledge, the financial statements, and other financial information included in this interim report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this interim report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this interim report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this interim report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data and information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: October 24, 2005 BY: /s/ A. Cameron Richardson --------------- ------------------------- A. Cameron Richardson President and Chief Financial Officer EX-32.1 3 ex32_1.txt EXHIBIT 32.1 Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 I, A. Cameron Richardson, President and Chief Financial Officer of Aurora Gold Corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Quarterly Report on Form 10-QSB of the Company for the period ended September 30, 2005 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: October 24, 2005 BY: /s/ A. Cameron Richardson ---------------- ------------------------- A. Cameron Richardson President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----