-----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, ESIIP885CA6TkkTbh4QS9xDT3epfZ+8UA7nbEpiRXcJix02y0KyzMxRAFxMiy8rW 0iCwVK2bjMzPd6UJdqcUDA== 0001140361-05-011035.txt : 20051216 0001140361-05-011035.hdr.sgml : 20051216 20051216141123 ACCESSION NUMBER: 0001140361-05-011035 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20051216 DATE AS OF CHANGE: 20051216 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: SB-2 SEC ACT: 1933 Act SEC FILE NUMBER: 333-130379 FILM NUMBER: 051269300 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 SB-2 1 body.txt AURORA GOLD SB-2 12-16-2005 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 2005 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AURORA GOLD CORPORATION (Name of small business issuer in its charter) DELAWARE 1040 13-3945947 - ---------------------------- ---------------------------- ------------------- (State or Other Jurisdiction (Primary Standard Industrial (IRS Employer of Organization Classification Code) Identification No.) A. CAMERON RICHARDSON 30 LEDGAR ROAD, BALCATTA, WA 238 WEST 4TH AVENUE 6021 AUSTRALIA SUITE 2 NORTH VANCOUVER, BRITISH COLUMBIA TELEPHONE: (+61 8) 9240-2836 CANADA V7M 1H7 FACSIMILE: (+61 8) 9240-2406 TELEPHONE: (604) 687-4432 FACSIMILE: (604) 687-4709 ------------------------------ ---------------------------------- (Address and telephone of (Name, address and telephone registrant's executive office) number of agent for service) Copies of all communications and notices to: JOSEPH SIERCHIO, ESQ. SIERCHIO GRECO & GRECO, LLP 720 FIFTH AVENUE NEW YORK, NEW YORK 10019 TELEPHONE: (212) 246-3030 FACSIMILE: (212) 246-2225 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement. If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act") check the following box. [X] If this Form is filed to register additional securities for an offering under Rule 462(b) of the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed under Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed under Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made under Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE - ------------------------------------------------------------------------------------------------ SECURITIES TO BE NUMBER OF PROPOSED PROPOSED REGISTRATION FEE REGISTERED SHARES REGISTERED MAXIMUM MAXIMUM (1) (2) OFFERING PRICE OFFERING PRICE (3) PER SHARE (3) - ------------------ ------------------ ---------------- ------------------- ----------------- Shares of Common Stock Par Value 13,000,000 $ 0.68 $ 8,840,000 $ 945.88 $0.001 per Share - ------------------------------------------------------------------------------------------------
(1) The 13,000,000 shares were issued in connection with a private placement of a total of 13,000,000 completed by the registrant in July of 2005. (2) All of the 13,000,000 shares being registered are offered by the selling stockholder. Accordingly, this registration statement includes an indeterminate number of additional shares of common stock issuable for no additional consideration pursuant to any stock dividend, stock split, recapitalization or other similar transaction effected without the receipt of consideration, which results in an increase in the number of outstanding shares of our common stock. In the event of a stock split, stock dividend or similar transaction involving our common stock, in order to prevent dilution, the number of shares registered shall be automatically increased to cover the additional shares in accordance with Rule 416(a) under the Securities Act of 1933. (3) Estimated solely for the purpose of computing the registration fee pursuant to Rule 457(c) under the Securities Act of 1933; the closing sale price of our stock on December 6, 2005, as quoted on the National Association of Securities Dealers, Inc.'s Over the Counter Bulletin Board was $0.68. It is not known how many shares will be purchased under this registration statement or at what price shares will be purchased. REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING UNDER SAID SECTION 8(A), MAY DETERMINE. -ii- SUBJECT TO COMPLETION, DATED DECEMBER 16, 2005 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALES IS NOT PERMITTED. THIS REGISTRATION STATEMENT WAS FILED WITH THE US SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 2005. THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER AND SALE IS NOT PERMITTED. PROSPECTUS AURORA GOLD CORPORATION 13,000,000 SHARES COMMON STOCK This prospectus relates to the resale by certain of our stockholders named in this prospectus (the "SELLING STOCKHOLDERS") of up to 13,000,000 shares of our common stock. We will not receive any proceeds from the sales by the Selling Stockholders. The Selling Stockholders may sell common stock from time to time in the principal market on which the stock is traded at the prevailing market price or in negotiated transactions. The shares may be sold directly or through agents or broker-dealers acting as agents on behalf of the Selling Stockholders. The Selling Stockholders may engage brokers, dealers or agents, who may receive commissions or discounts from the Selling Stockholders. We will pay substantially all the expenses incident to the registration of the shares; however, we will not pay for sales commissions and other expenses applicable to the sale of the shares. Our shares are listed on the OTC Bulletin Board under the symbol "ARXG." On December 6, 2005, the closing sales price for our common stock on the OTC Bulletin Board was U.S. $0.68 per share. THE PURCHASE OF THE SECURITIES OFFERED THROUGH THIS PROSPECTUS INVOLVES A HIGH DEGREE OF RISK. SEE SECTION ENTITLED "RISK FACTORS" BEGINNING ON PAGE 6. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS _____________, 2006 -1-
TABLE OF CONTENTS Page PROSPECTUS SUMMARY 3 RISK FACTORS 6 FORWARD-LOOKING STATEMENTS 12 USE OF PROCEEDS 13 MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 14 LEGAL PROCEEDINGS 14 MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION BUSINESS 15 MANAGEMENT 26 EXECUTIVE COMPENSATION 28 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 30 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 31 SELLING STOCKHOLDERS 33 DESCRIPTION OF OUR CAPITAL STOCK 34 DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES 36 EXPERTS 36 WHERE YOU CAN FIND ADDITIONAL INFORMATION 36 FINANCIAL STATEMENTS F1
__________________________________ YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR ANY SUPPLEMENT HERETO. WE HAVE NOT, AND THE SELLING STOCKHOLDERS HAVE NOT, AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU WITH DIFFERENT INFORMATION YOU SHOULD NOT RELY ON IT. WE ARE NOT, AND THE SELLING STOCKHOLDERS ARE NOT, MAKING AN OFFER TO SELL THE COMMON STOCK IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT COVER OF THIS PROSPECTUS REGARDLESS OF THE DATE OF DELIVERY OF THIS PROSPECTUS OR ANY SUPPLEMENT HERETO, OR THE SALE OF COMMON STOCK. OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE. WE OBTAINED STATISTICAL DATA AND CERTAIN OTHER INDUSTRY FORECASTS USED THROUGHOUT THIS PROSPECTUS FROM MARKET RESEARCH, PUBLICLY AVAILABLE INFORMATION AND INDUSTRY PUBLICATIONS. INDUSTRY PUBLICATIONS GENERALLY STATE THAT THEY OBTAIN THEIR INFORMATION FROM SOURCES THAT THEY BELIEVE TO BE RELIABLE, BUT THEY DO NOT GUARANTEE THE ACCURACY AND COMPLETENESS OF THE INFORMATION. SIMILARLY, WHILE WE BELIEVE THAT THE STATISTICAL AND INDUSTRY DATA AND FORECASTS AND MARKET RESEARCH USED HEREIN ARE RELIABLE, WE HAVE NOT INDEPENDENTLY VERIFIED SUCH DATA. WE HAVE NOT SOUGHT THE CONSENT OF THE SOURCES TO REFER TO THEIR REPORTS OR ARTICLES IN THIS PROSPECTUS. -2- PROSPECTUS SUMMARY This summary contains material information about us and the offering which is described in detail elsewhere in the prospectus. Since it may not include all of the information you may consider important or relevant to your investment decision, you should read the entire prospectus carefully, including the more detailed information regarding our company, the risks of purchasing our common stock discussed under "Risk Factors" on page 6, and our financial statements and the accompanying notes. Unless the context otherwise requires, the terms "we," "our," "us," the "Company" and "Aurora Gold" refer to Aurora Gold Corporation, a Delaware corporation, and not to the Selling Stockholders. OUR BUSINESS We were incorporated under the laws of the State of Delaware on October 10, 1995, under the name "CHEFS ACQUISITION CORP." Initially formed for the purpose of engaging in the food preparation business, we redirected our business efforts in late 1995 following a change of control, which occurred on October 30, 1995, to the acquisition, exploration and, if warranted, the development of mineral resource properties. We changed our name to "AURORA GOLD CORPORATION" on August 20, 1996 to more fully reflect our resource exploration business activities. Our general business strategy is to acquire mineral properties either directly or through the acquisition of operating entities. Our continued operations and the recoverability of mineral property costs is dependent upon the existence of economically recoverable mineral reserves, confirmation of our interest in the underlying properties, our ability to obtain necessary financing to complete the development and upon future profitable production. Since 1996 we have acquired and disposed of a number of properties. We have not been successful in any of our exploration efforts to establish reserves on any of the properties that we owned or in which we had an interest. We currently have interest in three properties none of which contain any reserves. Please refer to "DESCRIPTION OF PROPERTIES." We have no revenues, have achieved losses since inception, have been issued a going concern opinion by our auditors and rely upon the sale of our securities to fund operations. We will not generate revenues even if any of our exploration programs indicate that a mineral deposit may exist on our properties. Accordingly, we will dependent on future additional financing in order to maintain our operations and continue our exploration activities. Our technical office is located at 30 Ledgar Road, Balcatta, WA 6021 Australia. The telephone number is (+61 8) 9240-2836. We conduct our exploration and property acquisition activities through the Balcatta office. We maintain an office located at 238 West 4th Street, Suite 2, North Vancouver, B.C., Canada V7M 1H7 for accounting and book keeping purposes. The -3- telephone number is (604) 687-4432 and the facsimile number is (604) 687-4709. THE OFFERING On July 13, 2005 we concluded a private placement of 13,000,000 shares of our common stock, at a price of $0.05 per share or $650,000 in the aggregate; all of the shares were acquired by the Selling Stockholders, none of whom are residents of the United States or Canada. The shares were issued to the Selling Stockholders pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, afforded by Regulation S as promulgated by the U.S. Securities and Exchange Commission. As a condition to the consummation of the private placement, we agreed to register the shares that are the subject of this prospectus and to maintain such registration effective for a period of two years following the date of this prospectus. Although we have agreed to the costs and expenses related to the preparation and filing of this prospects, which we estimate will be approximately $35,000 we will receive none of the proceeds from the sale of the shares by the Selling Stockholders. The Selling Stockholders are offering an aggregate of 13,000,000 shares. The Selling Stockholders holders will determine if, when, and how they will sell the common stock offered in this prospectus. PLEASE REFER TO "PLAN OF DISTRIBUTION." The offering will conclude upon the earlier to occur of: - The sale of all of the 13,000,000 shares of common stock being offered; - The second anniversary date of the effective date of this prospectus; or - The earlier termination of the registration statement covering the shares being offered. At November 30, 2005 we had 36,218,522 shares issued and outstanding, inclusive of the shares being offered by the Selling Stockholders. Our common stock is currently quoted on the NASD's Over the Counter Bulletin Board under the symbol "ARXG." There is only a limited trading market for our common stock. PLEASE REFER TO "RISK FACTORS" AND TO "MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS." SELECTED FINANCIAL DATA The following summary statement of operations and summary balance sheet data are derived from our financial statements for the years ended December 31, 2004 and 2003, and for the nine month period ended September 30, 2005, that were filed with the U.S. Securities and Exchange Commission on our Annual Reports Form 10-KSB or Form 10-QSB as applicable. This information should be read in conjunction with the audited consolidated financial statements and the related notes appearing elsewhere in this prospectus. -4-
BALANCE SHEETS September December December 30, 2005 31, 2004 31, 2003 (Unaudited) (Audited) (Audited) Cash $ 527,791 $ 1,275 $ 15,327 Total Assets $ 656,496 $ 5,412 $ 22,618 Total Liabilities $ 110,435 $ 190,296 $ 7,799 Total Stockholders' Equity $ 546,061 $ (184,884) $ 14,819 (Deficit) $(4,070,794) $(3,990,739) $(3,766,976)
STATEMENTS OF OPERATION Nine From Months October 10, Ended Year Ended December 1995(inception) September December 31, to September 30, 30, 2005 31, 2004 2003 2005 (Unaudited) (Audited) (Audited) (Unaudited) Revenue $ - $ - $ - $ - Other Income (Loss) $ 72,659 $ - $ - $ (29,599) Expenses $ 152,714 $ 223,763 $ (96,404) $ (4,041,195) Net Loss for the Period $ (80,055) $ (223,763) $ (96,404) $ (4,070,794)
-5- RISK FACTORS You should carefully consider the risks described below before purchasing our shares of our common stock. Our most significant risks and uncertainties are described below; if any of the following risks actually occur, our business, financial condition, or results or operations could be materially adversely affected, the trading of our common stock could decline, and you may lose all or part of your investment therein. You should acquire shares of our common stock only if you can afford to lose your entire investment. RISKS RELATED TO OUR BUSINESS, PROPERTY AND INDUSTRY WE ARE AN EXPLORATION STAGE COMPANY WITH NO HISTORY OF OPERATIONS, WHICH HAS INCURRED SUBSTANTIAL LOSSES AND, THEREFORE, THERE IS A STRONG LIKELIHOOD THAT WE MAY FAIL. Due to the fact that we have not commenced any business operations, we have no operating history upon which to evaluate the likelihood that our business will be successful. We have never earned any revenues. In addition, we have incurred net losses of approximately $4,070,794 for the period from our inception (October 10, 1995) through September 30, 2005 and, based upon current plan of operation, we expect that we will incur losses for the foreseeable future. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such companies. We are subject to all of the risks inherent to a new business enterprise, such as established bank relationships, limited capital resources, lack of manpower, and possible cost overruns. Potential investors must also weigh the likelihood of success in light of any problems, complications, and delays that may be encountered with the exploration of our properties. BECAUSE WE DO NOT HAVE ANY REVENUES, WE EXPECT TO INCUR OPERATING LOSSES FOR THE FORESEEABLE FUTURE. Our independent auditors have added an explanatory paragraph to their audit opinion issued in connection with the financial statements for the years ended December 31, 2004 and 2003 relative to our ability to continue as a going concern. Our ability to obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We have never earned revenues and we have never been profitable. Prior to completing exploration on the mineral property, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. If we are unable to generate financing to continue the exploration of our properties, we will fail and you will lose your entire investment in this offering. -6- NONE OF THE PROPERTIES IN WHICH WE HAVE AN INTEREST OR THE RIGHT TO EARN AN INTEREST HAVE ANY KNOWN RESERVES. We currently have an interest or the right to earn an interest in three properties, none of which have any known reserves. To date, e have engaged in only limited preliminary exploration activities on the properties. Accordingly, we do have sufficient information upon which to assess the ultimate success of our exploration efforts. If we do not establish reserves we may be required to curtail or suspend our operations, in which case the market value of our common stock may decline and you may lose all or a portion of your investment. BECAUSE OF THE SPECULATIVE NATURE OF EXPLORATION OF MINERAL PROPERTIES, THERE IS A SUBSTANTIAL RISK THAT OUR BUSINESS WILL FAIL. The search for valuable minerals as a business is extremely risky. We can provide investors with no assurance that the exploration of any of the properties in which we have or may acquire an interest will uncover commercially exploitable mineral reserves. It is likely that such properties will not contain any reserves and, in all likelihood, any funds spent on exploration will probably be lost. In addition, problems such as unusual or unexpected geological formations or other variable conditions are involved in exploration and, often result in unsuccessful exploration efforts. In addition, due to our limited capital and resources, we are limited in the amount of exploration work we can do. As a result, our already low probability of successfully locating mineral reserves will be reduced significantly further. Therefore, we may not find a commercial mineable ore deposit prior to exhausting our funds. Furthermore, exploration costs may be higher than anticipated, in which case, the risk of utilizing all of our funds prior to locating any ore deposits shall be greatly increased. Factors that could cause exploration costs to increase are: adverse conditions, difficult terrain and shortages of qualified personnel. WE ARE SUBJECT TO ALL THE RISKS INHERENT TO THE MINING INDUSTRY, WHICH MAY HAVE AN ADVERSE AFFECT ON OUR BUSINESS OPERATIONS. We are subject to the numerous risks and hazards inherent to the mining industry including, without limitation, the following: - mining activities are subject to substantial operating hazard some of which are not insurable or may not be insured due to economic considerations; - the availability of water, which is essential to milling operations; - interruptions caused by adverse weather conditions; - unforeseen limited sources of supplies may resulted in shortages of material and equipment such as dynamite, earth moving equipment like bull dozers, backhoes and drilling equipment, fuel supplies, assaying and milling facilities, and availability of experienced manpower. The prices and availability of such equipment, facilities, -7- supplies and manpower may change and have an adverse effect on our operations, causing us to suspend operations or cease our activities completely. BECAUSE WE HAVE NOT COMMENCED PRELIMINARY EXPLORATION OF OUR PROPERTIES, WE FACE A HIGH RISK OF BUSINESS FAILURE AND THIS COULD RESULT IN A TOTAL LOSS OF YOUR INVESTMENT. We have not begun the initial stages of exploration of our properties, and thus have no way to evaluate the likelihood whether we will be able to operate our business successfully. To date, we have been involved primarily in organizational activities, acquiring interests in properties and in conducting preliminary exploration of properties. We have not earned any revenues and have not achieved profitability as of the date of this prospectus. Potential investors should be aware of the difficulties normally encountered by new mineral exploration companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration and additional costs and expenses that may exceed current estimates. We have no history upon which to base any assumption as to the likelihood that our business will prove successful, or that we will generate any operating revenues or ever achieve profitable operations. If we are unsuccessful in addressing these risks, our business will likely fail and you will lose your entire investment in this offering. IT IS POSSIBLE THAT OUR TITLE FOR THE PROPERTIES IN WHICH WE HAVE AN INTEREST WILL BE CHALLENGED BY THIRD PARTIES. We have not obtained title insurance for our property. It is possible that the title to the properties in which we have our interest will be challenged or impugned. If such claims are successful, we may loose our interest in such properties. OUR FAILURE TO COMPETE WITH OUR COMPETITORS IN THE MINERAL EXPLORATION INDUSTRY FOR FINANCING, ATTRACTING MINING CLAIMS, AND FOR QUALIFIED MANAGERIAL AND TECHNICAL EMPLOYEES WILL CAUSE OUR BUSINESS OPERATIONS TO SLOW DOWN OR BE SUSPENDED. Our competition includes large established mineral exploration companies with substantial capabilities and with greater financial and technical resources than we have. As a result of this competition, we may be unable to acquire additional attractive mining claims or financing on terms we consider acceptable. We may also compete with other mineral exploration companies in the recruitment and retention of qualified managerial and technical employees. If we are unable to successfully compete for financing or for qualified employees, our exploration programs may be slowed down or suspended. WE WILL HAVE TO SUSPEND OUR EXPLORATION PLANS IF WE DO NOT HAVE ACCESS TO ALL OF THE SUPPLIES AND MATERIALS WE NEED. Competition and unforeseen limited sources of supplies in the industry could result in occasional spot shortages of supplies such as dynamite, and equipment such as bulldozers and excavators that we might need to conduct exploration. We have not attempted to locate or -8- negotiate with any suppliers of products, equipment or materials. We will attempt to locate products, equipment and materials after this offering is complete. If we cannot find the products and equipment we need, we will have to suspend our exploration plans until we find the products and equipment we need. OUR OPERATIONS ARE SUBJECT TO ENVIRONMENTAL REGULATIONS THE COMPLIANCE WITH WHICH MAY ADVERSELY AFFECT OUR CAPITAL LIQUIDITY. All phases of our operations in Brazil and Canada, where the properties are located, will be subject to environmental regulations. Environmental legislation in Brazil and Canada is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. It is possible that future changes in environmental regulation will adversely affect our operations as compliance will be more burdensome and costly. Because we have not allocated any money for reclamation of the mining claim, we may be subject to fines if the mining claim is not restored to its original condition upon termination of our activities. We have not allocated any funds for reclamation of the mining claim. As such, if we terminate our operations and do not restore the mining claim to its original condition we could be subject to fines under the applicable mining laws of Brazil and Canada. AS WE ARE AN EXPLORATION STAGE COMPANY WITH LIMITED ASSETS, WE MAY NOT HAVE THE FUNDS REQUIRED TO FULLY IMPLEMENT OUR BUSINESS PLAN. Substantial expenditures are required to conduct exploration activities and to establish ore reserves through drilling. Even if our results of exploration are encouraging, we will require additional funds to complete our exploration activities. It is possible that we will be unable to obtain additional financing. Failure to obtain such financing would preclude us from continuing our exploration activities. Moreover, we may, in the future, be unable to meet our share of costs incurred under agreements to which we are a party and we may have our interests in the properties subject to such agreements reduced as a result. Furthermore, if other parties to such agreements do not meet their share of such costs, we may be unable to finance the costs required to complete the recommended programs. BECAUSE WE ARE SMALL AND DO NOT HAVE MUCH CAPITAL, WE MAY HAVE TO LIMIT OUR EXPLORATION ACTIVITY WHICH MAY RESULT IN A LOSS OF YOUR INVESTMENT. Because we are small and do not have much capital, we must limit our exploration activity. As such we may not be able to complete an exploration program that is as thorough as we would like. In that event, an existing ore body may go undiscovered. Without an ore body, we cannot generate revenues and you will lose your investment. -9- OUR EXECUTIVE OFFICERS DEVOTE AND WILL CONTINUE TO DEVOTE ONLY A LIMITED AMOUNT OF TIME TO OUR BUSINESS ACTIVITIES. Mr. Richardson, our president, chief executive officer and chief financial officer is engaged in other business activities and devotes only a limited amount of his time (approximately 10%) to our business. As we expand our activities, a need for full time management may arise. In such an event, should Mr. Richardson be unwilling to dedicate more of his time to our business or fail to hire additional personnel, our business and results of operations would suffer a material adverse effect. OUR DIRECTORS MAY FACE CONFLICTS OF INTEREST IN CONNECTION WITH OUR PARTICIPATION IN CERTAIN VENTURES BECAUSE THEY ARE DIRECTORS OF OTHER MINERAL RESOURCE COMPANIES. Messrs. Richardson, Cacace and Eckhof, who serve as our directors, may also be directors of other companies (including resource exploration companies) and, if those other companies participate in ventures in which we may participate, our directors may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. It is possible that due to our directors' conflicting interests, we may be precluded from participating in certain projects that we might otherwise have participated in, or we may obtain less favorable terms on certain projects than we might have obtained if our directors were not also directors of other participating mineral resources companies. In an effort to balance their conflicting interests, our directors may approve terms equally favorable to all of their companies as opposed to negotiating terms more favorable to us but adverse to their other companies. Additionally, it is possible that we may not be afforded certain opportunities to participate in particular projects because those projects are assigned to our directors' other companies for which the directors may deem the projects to have a greater benefit. CONCENTRATION OF OWNERSHIP AMONG OUR DIRECTORS, EXECUTIVE OFFICERS, AND PRINCIPAL STOCKHOLDERS MAY PREVENT NEW INVESTORS FROM INFLUENCING SIGNIFICANT CORPORATE DECISIONS. As of November 30, 2005, our directors, executive officers, holders of more than 5% of our common stock, and their affiliates, in the aggregate, beneficially own 24,354,971 common shares, representing approximately 67.2% of our issued and outstanding common stock. As a result, these stockholders, subject to any fiduciary duties owed to our other stockholders under Delaware law, will be able to exercise a controlling influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, and will have significant control over our management and policies. Some of these persons or entities may have interests that are different from yours. For example, these stockholders may support proposals and actions with which you may disagree or which are not in your interests. The concentration of ownership could delay or prevent a change in control of our company or otherwise discourage a potential acquirer from attempting to obtain control of our company, which in turn could reduce the price of our common stock. In addition, these stockholders, some of whom have representatives sitting on our board of directors, could use their voting influence to maintain our existing management and directors in office, delay or prevent changes of control of our company, or support or reject other management and board proposals that are subject to -10- stockholder approval, such as amendments to our employee stock plans and approvals of significant financing transactions. OUR FUTURE PERFORMANCE IS DEPENDENT ON OUR ABILITY TO RETAIN KEY PERSONNEL, LOSS OF WHICH WOULD ADVERSELY AFFECT OUR SUCCESS AND GROWTH. Our performance is substantially dependent on performance of our senior management. In particular, our success depends on the continued efforts of Mr. Richardson and Mr. Eckhof. The loss of their services could have a material adverse effect on our business, results of operations and financial condition as our potential future revenues would most likely dramatically decline and our costs of operations would rise. We do not have employment agreements in place with any of our officers or our key employees, nor do we have key person insurance covering our employee. THE VALUE AND TRANSFERABILITY OF OUR SHARES MAY BE ADVERSELY IMPACTED BY THE LIMITED TRADING MARKET FOR OUR SHARES. There is current only a limited trading market for our common stock on the NASD's over the counter bulletin board. This may make it more difficult for you to sell your stock if you so desire. OUR COMMON STOCK IS A PENNY STOCK AND BECAUSE "PENNY STOCK" RULES WILL APPLY, YOU MAY FIND IT DIFFICULT TO SELL THE SHARES OF OUR COMMON STOCK YOU ACQUIRED IN THIS OFFERING. Our common stock is a "penny stock" as that term is defined under Rule 3a51-1 of the Securities Exchange Act of 1934. Generally, a "penny stock" is a common stock that is not listed on a national securities exchange and trades for less than $5.00 a share. Prices often are not available to buyers and sellers and the market may be very limited. Penny stocks in start-up companies are among the riskiest equity investments. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the Securities and Exchange Commission. The document provides information about penny stocks and the nature and level of risks involved in investing in the penny stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser's written agreement to the purchase. Consequently, the rule may affect the ability of broker-dealers to sell our securities and also may affect the ability of purchasers of our stock to sell their shares in the secondary market. It may also cause fewer broker dealers to make a market in our stock. Many brokers choose not to participate in penny stock transactions. Because of the penny stock rules, there is less trading activity in penny stock and you are likely to have difficulty selling your shares. In addition to the "penny stock" rules promulgated by the Securities and Exchange Commission, the NASD has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is -11- suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the NASD believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The NASD requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares. SALES OF A SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK INTO THE PUBLIC MARKET BY THE SELLING STOCKHOLDERS MAY RESULT IN SIGNIFICANT DOWNWARD PRESSURE ON THE PRICE OF OUR COMMON STOCK AND COULD AFFECT THE ABILITY OF OUR STOCKHOLDERS TO REALIZE ANY CURRENT TRADING PRICE OF OUR COMMON STOCK. Sales of a substantial number of shares of our common stock in the public market could cause a reduction in the market price of our common stock, when and if such market develops. When this registration statement is declared effective, the Selling Stockholders may be reselling up to approximately 36% of the issued and outstanding shares of our common stock. As a result of such registration statement, a substantial number of our shares of common stock which have been issued may be available for immediate resale when and if a market develops for our common stock, which could have an adverse effect on the price of our common stock. As a result of any such decreases in price of our common stock, purchasers who acquire shares from the Selling Stockholders may lose some or all of their investment. Any significant downward pressure on the price of our common stock as the Selling Stockholders sell the shares of our common stock could encourage short sales by the Selling Stockholders or others. Any such short sales could place further downward pressure on the price of our common stock. FUTURE SALES OF SHARES BY US MAY REDUCE THE VALUE OF OUR STOCK. If required, we will seek to raise additional capital through the sale of our common stock. Future sales of shares by us could cause the market price of our common stock to decline and may result in further dilution of the value of the shares owned by our stockholders. FORWARD-LOOKING STATEMENTS This prospectus contains statements that plan for or anticipate the future, called "forward-looking statements." In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of those terms and other comparable terminology. These forward-looking statements include statements about: -12- - our market opportunity; - our strategies; - competition; - expected activities and expenditures as we pursue our business plan; and - the adequacy of our available cash resources. These statements appear in a number of places in this prospectus and include statements regarding our intent, belief or current expectations, those of our directors or officers with respect to, among other things: (i) trends affecting our financial condition or results of operations, (ii) our business and growth strategies, and (iii) our financing plans. Although we believe that the expectations reflected in the forward-looking statement are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The accompanying information contained in this prospectus, including the information discussed under the headings "Risk Factors," "Plan of Operations" and "Description of Business and Property" identify important factors that could adversely affect actual results and performance. All forward-looking statements attributable to us are expressly qualified in their entirety by the cautionary statement appearing above. USE OF PROCEEDS This prospectus relates to shares of our common stock that may be offered and sold from time to time by the Selling Stockholders. Although we will pay the costs and expenses incurred in connection with the preparation and filing of this prospectus, we will receive no proceeds from the sale of shares of common stock in this offering. -13- MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS Our common stock is quoted for trading on the OTC Bulletin Board under the symbol "ARXG" since December 5, 1996. The following table sets forth the high and low bid prices for the Common Stock for the calendar quarters indicated as reported by the NASD OTC Bulletin Board for the last two years. These prices represent quotations between dealers without adjustment for retail markup, markdown or commission and may not represent actual transactions.
------------------------------------------------------ FIRST SECOND THIRD FOURTH -------- -------- -------- ----------- QUARTER QUARTER QUARTER QUARTER(1) ----------- -------- -------- -------- ----------- 2005 - High $ 0.23 $ 0.12 $ 0.83 $ 0.73 ----------- -------- -------- -------- ----------- 2005 - Low $ 0.09 $ 0.06 $ 0.06 $ 0.47 ----------- -------- -------- -------- ----------- 2004 - High $ 0.51 $ 0.38 $ 0.31 $ 0.26 ----------- -------- -------- -------- ----------- 2004 - Low $ 0.20 $ 0.24 $ 0.17 $ 0.15 ----------- -------- -------- -------- ----------- 2003 - High $ 0.12 $ 0.12 $ 0.08 $ 0.40 ----------- -------- -------- -------- ----------- 2003 - Low $ 0.03 $ 0.05 $ 0.01 $ 0.01 ------------------------------------------------------
(1) Through December 6, 2005. On December 6, 2005, the closing price of our common stock as reported on the over the counter bulletin board was $0.68. As of November 30, 2005, we had 733 stockholders of record. There are no shares reserved for issuance under any equity based compensation plan. DIVIDEND POLICY We have never paid cash dividends on our capital stock and do not anticipate paying any cash dividends in the foreseeable future, but intend to retain our capital resources for reinvestment in our business. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements and other factors as the board of directors deems relevant. Our board of directors has the right to authorize the issuance of preferred stock, without further stockholder approval, the holders of which may have preferences over the holders of the common stock as to payment of dividends. LEGAL PROCEEDINGS We are not a party to any material legal proceedings and there are no material legal proceedings pending with respect to our property. We are not aware of any legal proceedings contemplated by any governmental authorities involving either us or our property. None of our directors, officers or affiliates is an adverse party in any legal proceedings involving us, or has an interest in any proceeding which is adverse to us. -14- MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS GENERAL We are a mineral exploration company. We maintain a technical and property acquisition office in Balcatta, WA, Australia; we also maintain an office in Vancouver, Canada; we are engaged in the exploration for precious metals. We were incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp." On August 20, 1996 we changed our name to Aurora Gold Corporation and is an exploration stage enterprise. This Prospectus contains numerous forward-looking statements relating to our business. 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 our 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. Our general business strategy is to acquire mineral properties either directly or through the acquisition of operating entities. Our continued operations and the recoverability of mineral property costs is dependent upon the existence of economically recoverable mineral reserves, confirmation of our interest in the underlying properties, our ability to obtain necessary financing to complete the development and upon future profitable production. Since 1966 we have acquired and disposed of a number of properties. We have not been successful in any of our exploration efforts to establish reserves on any of the properties that we owned or in which we had an interest. During 2005 we have been evaluating our property holdings in order to determine whether to implement exploration programs on our existing properties or acquire interests in new properties. To date, in 2005 we have conveyed our interests in our Matupa Gold Project to Neuer Kapital Corp. Under the terms of the Agreement, Neuer agreed to (a) pay Aurora Gold US $100,000; (b) issue 300,000 common shares of Neuer to us; (c) pay us up to US $20,000 of the direct out-of-pocket costs we incurred in connection with the Matupa Gold Project. Additionally, in March 2005 we dropped our options with Full Medal Minerals Ltd. to acquire an interest in three mineral exploration properties located in the State of Alaska, United States. The three mineral exploration properties are the Lucky Shot Property in the Palmer Recording District, State of Alaska, the Gunsite Property in the Talkeetna Recording District, State of Alaska and the Zackly Property in the Talkeetna Recording District, State of Alaska -15- On July 13, 2005 we 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 offshore investors, all but one of whom are non-affiliated a 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, we had 36,193,522 common shares issued and outstanding. On September 5, 2005, Hans Biener of SupplyConsult GbR ("SupplyConsult"), a consultant retained by us, signed a Memorandum of Understanding ("MOU") with Galdino Antonio da Silva Luz and Alvaro da Silva Souza (the "Vendors"), the title holders of certain mineral rights herein referred to as the Novo Porto property, to carry out a due diligence on the property within 90 (ninety) days of signing the MOU. By letter dated September 6, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Porto Novo MOU to us without further consideration. The MOU provides for a 90 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Option Agreement, as detailed in the terms and conditions of the MOU will allow us to earn a 100% interest in the two exploration licenses via cash payments and leaving the property vendors with a 2% NSR. The total option agreement payments for the two licenses are structured as follows: November 30, 2005 - USD $25,000; May 30, 2006 - USD $75,000; May 30, 2007 - USD $100,000 and May 30, 2008 - USD $150,000. We may withdraw from the option agreement at any time. Should we decide to pursue either or both exploration licenses after May 30, 2009 then a final payment of USD $1,850,000 per license for a total of USD $ 2,200,000 would be paid. The total payment for one license is USD $2,200,000 and for the two licenses is USD $4,400,000. The Novo Porto MOU's 90 day due diligence period has expired without SupplyConsult giving notice of its intention to enter into an Option Agreement. Accordingly, at this time, we no longer have an interest in the Porto Novo property. Please refer to "Description of Properties." On September 5, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Antonio Garcia Bernardes and Galdino Antonio da Silva Luz (the "Vendors"), the title holders of certain mineral rights herein referred to as the Santa Clara property, to carry out a due diligence on the property within 90 (ninety) days of signing the MOU. By letter dated September 6, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Santa Clara MOU to us without further consideration. -16- The MOU provides for a 90 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Option Agreement, as detailed in the terms and conditions of the MOU will allow us to earn a 100% interest in the two exploration licenses via cash payments and leaving the property vendors with a 2% NSR. The total option agreement payments for the two licenses are structured as follows: November 30, 2005 - USD $25,000; May 30, 2006 - USD $75,000; May 30, 2007 - USD $100,000 and May 30, 2008 - USD $150,000. We may withdraw from the option agreement at any time. Should we decide to pursue either or both exploration licenses after May 30, 2009 then a final payment of USD $1,850,000 per license for a total of USD $ 2,200,000 would be paid. The total payment for one license is USD $2,200,000 and for the two licenses is USD $4,400,000. The Santa Clara MOU's 90 day due diligence period has expired without SupplyConsult giving notice of its intention to enter into an Option Agreement. Accordingly, at this time, we no longer have an interest in the Santa Clara property. Please refer to "Description of Properties." On October 18, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Cidines da Silva Batista (the "Vendor"), the title holder of certain mineral rights herein referred to as the Ouro Mil property, to carry out a due diligence on the property within 60 (sixty) days of signing the MOU. By letter dated October 19, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Ouro Mil MOU to us without further consideration. The MOU provides for a 60 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Option Agreement, as detailed in the terms and conditions of the MOU will allow us to earn a 100% interest in the exploration license via cash payments and leaving the property vendors with a 1.5% NSR. The total option agreement payments for the license is structured as follows: October 18, 2005 - USD $12,000; December 18, 2005 - USD $30,000; June 18, 2006 - USD $70,000; June 18, 2007 - USD $120,000; June 18, 2008 - USD $180,000 and December 18, 2008 - USD $1,500,000 for a total of USD $1,912,000. Aurora Gold may withdraw from the -17- option agreement at any time and may purchase the NSR at any time for USD $1,000,000. Please refer to "Description of Properties." On October 24, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Antonio Barros de Souza (the "Vendor"), the title holder of certain mineral rights herein referred to as the Sao Domingo property, to carry out a due diligence on the property within 60 (sixty) days of signing the MOU. By letter dated November 5, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Sao Domingo MOU to us without further consideration. The MOU provides for a 60 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Option Agreement, as detailed in the terms and conditions of the MOU will allow us to earn a 100% interest in the exploration license via cash payments and leaving the property vendors with a 2.0% NSR. The total option agreement payments for the license is structured as follows: October 24, 2005 - USD $20,000; December 30, 2005 - USD $70,000; June 30, 2006 - USD $150,000; June 30, 2007 - USD $250,000; June 30, 2008 - USD $310,000 and December 30, 2008 - USD $1,500,000 for a total of USD $2,300,000. Aurora Gold may withdraw from the option agreement at any time and may purchase the NSR at any time for USD $1,000,000. Please refer to "Description of Properties." RESULTS OF OPERATIONS (1) NINE MONTHS ENDED SEPTEMBER 30, 2005 (FISCAL 2005) VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2004 (FISCAL 2004) We 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). We had no operating revenues for the nine month period ended September 30, 2005 (fiscal 2004 - $0). For the nine months ended September 30, 2005 we 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 we 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). -18- EXPLORATION EXPENDITURES - For the nine month period ended September 30, 2005 we recorded exploration expenses of $94,715 compared to $1,969 in fiscal 2004. The following is a breakdown of our exploration expenses by property:
------------------------------------------------------------------- Property Nine Months Ended Nine Months Ended September 30, 2005 September 30, 2004 ------------------------- ------------------- ------------------- Alaska, United States $ - $ - ------------------------- ------------------- ------------------- Brazil $ 92,679 $ - ------------------------- ------------------- ------------------- Canada, Kumealon Property $ 2,036 $ 1,969 -------------------------------------------------------------------
AMORTIZATION EXPENDITURES - For the nine month period ended September 30, 2005 we recorded depreciation costs of $2,944 (fiscal 2004 - $2,737). (2) TWELVE MONTHS ENDED DECEMBER 31, 2004 (FISCAL 2004) VERSUS TWELVE MONTHS ENDED DECEMBER 31, 2003 (FISCAL 2003) For the year ended December 31, 2004 we recorded a loss of $223,763 or $0.01 per share, compared to a loss of $96,404 ($0.01 per share) in 2003. GENERAL AND ADMINISTRATIVE EXPENSES - For the year ended December 31, 2004 we recorded general and administrative expenses of $163,681 versus $94,814 in 2003). The fiscal 2004 amount includes $52,563 for property search and negotiation (fiscal 2003 - $49,277), professional fees - accounting $9,831 (fiscal 2003 - $6,700) and legal $2,231 (fiscal 2003 - $0). EXPLORATION EXPENDITURES - For the year ended December 31, 2004 we recorded exploration expenses of $60,082 compared to $1,595 in fiscal 2003. The following is a breakdown of our exploration expenses by property:
----------------------------------------------------------------- Property Six Months Ended Six Months Ended December 31, 2004 December 31, 2003 ------------------------- ------------------ ------------------ Alaska, United States $ 39,113 $ - ------------------------- ------------------ ------------------ Brazil $ 19,000 $ - ------------------------- ------------------ ------------------ Canada, Kumealon Property $ 1,969 $ 1,595 -----------------------------------------------------------------
AMORTIZATION EXPENDITURES - For the year ended December 31, 2004 we recorded depreciation costs of $3,666 compared to $3,092 in 2003. CAPITAL RESOURCES AND LIQUIDITY At September 30, 2005 we had cash of $527,791 (2004 - $1,934) and a working capital of $456,312 (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 we issued 13,000,000 common shares (2004 - -19- 100,000) for cash of $650,000 (fiscal 2004 - $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 we 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. We have 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 we may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its properties, there is no assurance that any such activity will generate funds that will be available for operations. Failure to obtain such additional financing may result in a reduction of our interest in certain properties or an actual foreclosure of its interest. We have no agreements or understandings with any person as to such additional financing. PLANS FOR THE YEARS 2005 AND 2006 During the next 12 months we intend 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, Ouro Mil and Sao Domingo properties 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. Our exploration work programs in 2005 on the Novo Porto, Ouro Mil and Sao Domingo properties 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. APPLICATION OF CRITICAL ACCOUNTING POLICIES The accounting policies and methods we utilize in the preparation of our consolidated financial statements determine how we report our financial condition and results of operations and may require our management to make estimates or rely on assumptions about matters that are inherently uncertain. Our accounting policies are described in note 2 to its December 31, 2004 financial statements. Our 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. -20- See note 3(c) Significant Accounting Policies - Mineral Properties and Exploration Expenses in the notes to the Interim Financial Statements for our policy on exploration costs and expenses. US GAAP require us to consider at the end of each accounting period whether or not there has been an impairment of the capitalized property, plant and equipment. This assessment is based on whether factors that may indicate the need for a write-down are present. If we determine there has been an impairment, then we would be required to write-down the recorded value of its property, plant and equipment costs which would reduce our earnings and net assets. RELATED PARTY TRANSACTIONS For a description of our related party transactions, see the "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" section of this prospectus and the related notes to our financial statements appearing at the end of this prospectus. OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS We do not have any off-balance sheet arrangements or contractual obligations that are likely to have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in our financial statements. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK Our exposure to market risk is confined to our cash equivalents and short-term investments. We invest in high-quality financial instruments; primarily money market funds, federal agency notes, and US Treasury obligations, with the effective duration of the portfolio within one year which we believe are subject to limited credit risk. We currently do not hedge interest rate exposure. Due to the short-term nature of our investments, we do not believe that we have any material exposure to interest rate risk arising from our investments. NEW ACCOUNTING PRONOUNCEMENTS In December 2004, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment ("Statement 123(R)"), a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows. Statement 123(R), which we expect to adopt in the first quarter of 2006, is generally similar to Statement 123; however, it will require all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Thus, pro forma disclosure will no longer be an alternative to financial statement recognition. We do not believe the adoption of Statement 123(R) will have a material impact on our results of operations or financial position. -21- DESCRIPTION OF OUR BUSINESS AND PROPERTY We conduct exploration activities from our technical office in Balcatta, WA, Australia. These offices are provided to us on a rent free, month to month basis by Klaus Eckhof, one of our directors. We also maintain an office in Vancouver, Canada for which we receive $300.00 per month. We believe that these offices are adequate for our purposes. Our 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. We are currently concentrating our property exploration activities in Brazil and Canada. We are also examining data relating to the potential acquisition of other exploration properties in Latin America, South America and the United States. Our properties are in the exploration stage only and are without a known body of mineral reserves. Development of the properties will follow only if satisfactory exploration results are obtained. Mineral exploration and development involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. There is no assurance that our mineral exploration and development activities will result in any discoveries of commercially viable bodies of mineralization. The long-term profitability of our operations will be, in part, directly related to the cost and success of our exploration programs, which may be affected by a number of factors. PLEASE REFER TO "RISK FACTORS." We currently have an interest in four projects located in Tapajos gold province in Para State, Brazil and one property located in British Columbia Canada. We have conducted only preliminary exploration activities to date and may discontinue such activities and dispose of the properties if further exploration work is not warranted. BRITISH COLUMBIA, CANADA In February 1999, we acquired, by staking, a high grade limestone property three (3) square kilometres (741 acres) located on the north shore of Kumealon Inlet, 54 kilometres south-southeast of Prince Rupert, B.C. Canada. This property is highlighted by consistence of purity and whiteness of the limestone zone outcropping along the southwest shore of Kumealon Lagoon. The zone is comprised mostly of white, recrystallized, fine to course grained limestone, striking 150 degrees and can be traced for at least 1200 meters. The zone is estimated to have an average stratigraphic thickness of 180 meters. Chip samples taken across the zone averaged 55.06% CaO, 2.11% insolubles and 43.51% ignition loss. The zone is estimated to contain 19 million tonnes of high-grade limestone over a strike length of 1200 meters, with an average width of 180 meters and an average height above water of 30 meters. This property has no known reserves. -22- BRAZIL, SOUTH AMERICA On September 5, 2005, Hans Biener of SupplyConsult GbR ("SupplyConsult"), a consultant retained by us, signed a Memorandum of Understanding ("MOU") with Galdino Antonio da Silva Luz and Alvaro da Silva Souza (the "Vendors"), the title holders of certain mineral rights herein referred to as the Novo Porto property, to carry out a due diligence on the property within 90 (ninety) days of signing the MOU. By letter dated September 6, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Porto Novo MOU to us without further consideration. The MOU provides for a 90 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Novo Porto MOU's 90 day due diligence period has expired without SupplyConsult giving notice of its intention to enter into an Option Agreement. Accordingly, at this time, we no longer have an interest in the Porto Novo property. Please refer to "Management's Discussion and Analysis or Plan of Operations - General." The Nova Porto project area located in the region of the Basin of Tocantins River and around some of its arms, Municipality of Itaituba, Para State, Brazil and covers an area of approximately 37,500 hectares. The MOU covers two exploration licences. The Tapajos Gold Province comprises an area of approximately 300km by 350km located in south westerly reaches of the state of Para. The dominant lithologies are composed of Paleoproterozoic aged volcanic and plutonic rocks and hosts gold mineralization related to two metallogenic events. The older event comprises orogenic mesothermal shear hosted lode deposits, while the younger event related to emplacement of post-orogenic alkaline granitoids as volcanic edifices and along structural corridors, is constituted by epithermal to epizonal type deposits. The project area lies on a dominant NW faulted contact between the Parauari Intrusive Suite and the later Maloquinha Suite, and this contact has been the focus of large-scale alluvial workings. Approximately 40km to the South West of the project area is the Brazauro Resources Corporation owned Tocantinzinho project. The Nova Porto project has many similarities to the large Tocantinzinho project including, immediate proximity to large-scale alluvial mining, proximity to the faulted contact of the Parauari Intrusive Suite and the later Maloquinha Suite, (as described above and which hosts many other gold deposits in the region), and both projects -23- share a North West trend. On September 5, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Antonio Garcia Bernardes and Galdino Antonio da Silva Luz (the "Vendors"), the title holders of certain mineral rights herein referred to as the Santa Clara property, to carry out a due diligence on the property within 90 (ninety) days of signing the MOU. By letter dated September 6, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Santa Clara MOU to us without further consideration. The MOU provides for a 90 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. The Santa Clara MOU's 90 day due diligence period has expired without SupplyConsult giving notice of its intention to enter into an Option Agreement. Accordingly, at this time, we no longer have an interest in the Santa Clara property. Please refer to "Management's Discussion and Analysis or Plan of Operations - General." The Santa Clara project is located in the region of the Basin of Crepori River and around some of its arms, in the mineral bearing grounds of Marupa II and Surubim, Municipality of Itaituba, State of Para, Brazil. The project covers an area of approximately 2,182 hectares. The MOU covers two exploration licences. On October 18, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Cidines da Silva Batista (the "Vendor"), the title holder of certain mineral rights herein referred to as the Ouro Mil property, to carry out a due diligence on the property within 60 (sixty) days of signing the MOU. By letter dated October 19, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Ouro Mil MOU to us without further consideration. The MOU provides for a 60 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. Please refer to "Management's Discussion and Analysis or Plan of Operations - General." -24- The Ouro Mil project is also located in the region of Gleba Surubim, municipality of Itaituba, Para State, Brazil. The project covers an area of approximately 10,000 hectares. The Ouro Mil project is situated within a north-west trending sliver of the Creporizao Intrusive Suite along an E-NE shear subordinate to the NW trending regional shear of the area. The western margin of this portion of the Creporizao Intrusive Suite is in a NW faulted contact with the Parauari Intrusive Suite, and similarly the eastern margin is in a NW faulted contact with the Cuiu-Cuiu Complex. On October 24, 2005, Hans Biener of SupplyConsult, a consultant retained by us, signed a MOU with Antonio Barros de Souza (the "Vendor"), the title holder of certain mineral rights herein referred to as the Sao Domingo property, to carry out a due diligence on the property within 60 (sixty) days of signing the MOU. By letter dated November 5, 2005, Hans Biener irrevocably transferred the 100 percent interest in the Sao Domingo MOU to us without further consideration. The MOU provides for a 60 day review period to access the gold potential of the property. If the holders of the interest in the MOU decide to proceed with acquiring a 100 percent interest in the title to the mineral rights then SupplyConsult would give notice to the vendors of its intention to acquire title to the mineral rights at least five days prior to the expiration of the aforementioned period. SupplyConsult and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The MOU states that SupplyConsult may transfer to third parties, i.e. Aurora Gold Corporation, the mineral rights granted to it under the terms and conditions of Option Agreement, once SupplyConsult has signed the definitive Option Agreement. Please refer to "Management's Discussion and Analysis or Plan of Operations - General." The Sao Domingo project is also located in the region of do Sao Domingos, Municipality of Itaituba, Para State, Brazil. The Sao Domingo project covers an area of approximately 5,000 hectares. The Sao Domingo project is situated within the granites of the Parauari Intrusive Suite cut by E-W and a NNW-SSE trending regional faults. We have conducted only preliminary exploration activities on these properties. None of the foregoing properties contain any known reserves. -25- MANAGEMENT The following table and text set forth the names and ages of all directors and executive officers of our company as of December 31, 2004 and (except for Mr. Jenkins) November XX, 2005. The Board of Directors is comprised of only one class. All of the directors will serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. There are no family relationships between or among the directors, executive officers or persons nominated or charged by our company to become directors or executive officers. Executive officers serve at the discretion of the Board of Directors, and are appointed to serve by the Board of Directors. Also provided herein are brief descriptions of the business experience of each director and executive officer during the past five years and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws. As of December 6, 2005, the directors and executive officers of the company were as follows:
Name and Address Age and Position - ------------------------ ---------------- - -------------------------------------------------------------------------------------------- Antonino G. Cacace Age 59, Director since October 1995. Crud-y-Gloyat, Carswell Bay Swansea Wales, U.K. - ------------------------ ------------------------------------------------------------------ Klaus P Eckhof Age 47, Director since July 5, 2005. 30 Ledgar Road, Balcatta WA 6021, Australia - ------------------------ ------------------------------------------------------------------ A. Cameron Richardson Age 52, President and Director (May 4, 2001 to present); Secretary 2 - 238 West 4th Street, (April 1998 to present). North Vancouver, B.C., Canada V7M 1H7 - --------------------------------------------------------------------------------------------
The following is a description of the employment history for each of our directors and officers for the last five years: Antonino G. Cacace Engineer, Founder and current Managing Director of Stelax Industries in the United Kingdom. Between 1984 and 1995 he was managing director/chief executive officer of several Companies involved in development and operation of steel/bar rolling mills. Klaus P Eckhof Chief Executive Officer of Moto Goldmines Limited (2003 to present); Director of Moto Goldmines (May 18, 2005 to present); Self employed as a geological consultant (1994 to 2003). A. Cameron Richardson Held accounting positions with various Canadian resource companies (1981 to 1997). -26- There are no family relationships between any of the directors or executive officers. No director or executive officer has been involved in legal proceedings during the past five years that are material to an evaluation of the ability or integrity of any director or executive officer. During the past five years none of our directors, executive officers, promoters or control persons has been: (a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (c) subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or (d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Based on information provided to the Company, it is believed that all of the Company's directors, executive officers and persons who own more than 10% of the Company's common stock were in compliance with Section 16(a) of the Exchange Act of 1934 during the last fiscal year. During the year ended December 31, 2004, all of the Company's directors, executive officers and Company's common stock were in compliance with section 16(a) of the Exchange Act of 1934, except as follows: DIRECTORS Our Board of directors consists of three members. Directors serve for a term of one year and stand for election at our annual meeting of stockholders. Pursuant to our Bylaws, any vacancy occurring in the Board of directors, including a vacancy created by an increase in the number of directors, may be filled by the stockholders or by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of directors. A director elected to fill a vacancy shall hold office only until the next election of directors by the stockholders. If there are no remaining directors, the vacancy shall be filled by the stockholders. At a meeting of stockholders, any director or the entire Board of directors may be removed, with or without cause, provided the notice of the meeting states that one of the purposes of the meeting is the removal of the director. A director may be removed only if the number of votes cast to remove him exceeds the number of votes cast against removal. -27- COMMITTEES Antonino G. Cacace is the independent audit committee financial expert serving on our audit committee. COMPENSATION OF DIRECTORS In 2004 and 2003 we incurred $0 and $0 respectively, in fees to directors. Additionally, in 2004 and 2003, we paid $60,000 and $0 respectively to David Jenkins in management fees. STANDARD ARRANGEMENTS We do not pay a fee to our outside, non-officer directors. We reimburse our directors for reasonable expenses incurred by them in attending meetings of the Board of Directors. During fiscal 2004 non-officers directors did not receive any consulting fees. EXECUTIVE COMPENSATION The following table sets forth information concerning the compensation of the named executive officers for each of the registrant's last three completed fiscal year:
- ----------------------------------------------------------------------------------------------------- ANNUAL COMPENSATION LONG-TERM COMPENSATION --------------------------- -------------------------------------------- AWARDS PAYMENTS ------------------------ ------------------ Securities Other Under- All Annual Restricted Lying other Compen- Stock Options/ LTIP Compen- Name And Year Salary Bonuses Sation Award(s) SARs Payouts sation Principal Position ($) ($) ($) ($) (#) ($) ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) - ------------------- ----- ------- -------- -------- ----------- ----------- -------- -------- Cameron Richardson 2004 -0- -0- -0- None None None -0- President and ----- ------- -------- -------- ----------- ----------- -------- -------- Director 2003 -0- -0- -0- None None None -0- ----- ------- -------- -------- ----------- ----------- -------- -------- 2002 1,440 -0- -0- None None None -0- - ----------------------------------------------------------------------------------------------------- David Jenkins (1) 2004 60,000 -0- -0- None None None -0- Director ----- ------- -------- -------- ----------- ----------- -------- -------- 2003 -0- -0- -0- None None None -0- ----- ------- -------- -------- ----------- ----------- -------- -------- 2002 -0- -0- -0- None None None -0- - -----------------------------------------------------------------------------------------------------
(1) Mr. Jenkins was our founder, President and Director from October 1995 to May 2001. Mr. Jenkins rejoined our Board of Directors in March 2004 and resigned on June 15, 2005. None of our officers or directors is a party to an employment agreement with us. During the fiscal year ending December 31, 2004 the entire board of directors acted as our compensation committee and audit committee. -28- OPTIONS/SAR GRANTS TABLE The following information sets forth information concerning individual grants of stock options (whether or not in tandem with stock appreciation rights ("SARs") and freestanding SARs made during the last completed fiscal year to each of the named executive officers. We awarded no stock purchase options, or any other rights, to any of our directors or officers in 2004 or 2003. AGGREGATED OPTION/SAR EXERCISES AND FISCAL YEAR-END OPTION/SAR VALUE TABLE We have no options issued or outstanding. We do not have a Long-term Incentive Plan. None of our officers or directors was party to an employment agreement with us. At no time during the last completed fiscal year did we, while a reporting company pursuant to Section 13(a) of 15(d) of the Exchange Act, adjust or amend the exercise price of the stock options or SARs previously awarded to any of the named executive officers, whether through amendment, cancellation or replacement grants, or any other means. -29- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of our common stock as of December 27, 2005 by (i) each person who is known by us to own beneficially more than five percent (5%) of our outstanding common stock; (ii) each of the our directors and officers; and (iii) all of our directors and officers as a group. As at November 30, 2005 there were 36,218,522 shares of common stock issued and outstanding.
- ------------------------------------------------------------------------------------------- NAME AND ADDRESS OF AMOUNT AND NATURE PERCENTAGE OF CLASS BENEFICIAL OWNER OF BENEFICIAL OWNER - ------------------------------------------------- ------------------- ------------------- Carrington International Limited 2,919,697 8.061% Suite 2402 Bank of America Tower 12 Harcourt Road, Hong Kong - ------------------------------------------------- ------------------- ------------------- Kastalia Ltd 3,500,000 9.66% Wickhams Cay 1 Road Town, Tortola BVI - ------------------------------------------------- ------------------- ------------------- Dr Andreas Reitmeier 3,500,000 9.66% Graben 27, A-1010 Eien Austria - ------------------------------------------------- ------------------- ------------------- EL &A Ltd. 2,296,897 6.34% 4 D Crystal Court DB Hong Kong - ------------------------------------------------- ------------------- ------------------- Patricia Eckhof 2,245,000 6.20% Rotwand Str 15, Muenchen, 81539 Germany - ------------------------------------------------- ------------------- ------------------- Manuela LBL 2,214,000 6.11% Wagramer Str 4, App 2406 A-122- Wien, Austria - ------------------------------------------------- ------------------- ------------------- Boavista Securities Ltd. 2,211,488 6.11% PO Box 3711 STN Terminal Vancouver, BC Canada V6B 3Z1 - ------------------------------------------------- ------------------- ------------------- Brown Brothers Harriman & Co. 1,959,556 5.41% 140 Broadway, New York, NY 10005 - ------------------------------------------------- ------------------- ------------------- OFFICERS AND DIRECTORS: - ------------------------------------------------- ------------------- ------------------- Antonino G. Cacace (1) 8,333 * Crud-y-Gloyat, Carswell Bay, Swansea Wales, U.K. - ------------------------------------------------- Klaus Eckhof (1) 3,500,000 9.66% 30 Ledgar Road, Balcatta, WA 6021 Australia - ------------------------------------------------- ------------------- ------------------- Cameron Richardson (1) 0 * 2 - 238 West 4th Street, North Vancouver, B.C., Canada V6E 4K2 - ------------------------------------------------------------------------------------------- -30- - ------------------------------------------------------------------------------------------- Officers and Directors (3 persons) 3,508,333 9.69% - -------------------------------------------------------------------------------------------
1. Officer and/or director * Less than 1%. CHANGES IN CONTROL There were no arrangements during the last completed fiscal year or subsequent period to September 30, 2005 which would result in a change in control. We do not believe that the offer and sale by us of an aggregate of 13,000,000 shares in July of 2005, to six unrelated investors, and one affiliated shareholder (Klaus Eckhof, one of our directors and a named selling stockholder) resulted in a change of control. No securities were authorized for issuance under equity compensation plans. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Our proposed business raises potential conflicts of interests between certain of our officers and directors and us. There have been no transactions during the last two years, or proposed transactions, to which we were or are a party, in which any of the directors or executive officers had or is to have a direct or indirect material interest. Certain of our directors are directors of other mineral resource companies and, to the extent that such other companies may participate in ventures in which we may participate, our directors may have a conflict of interest in negotiating and concluding terms regarding the extent of such participation. In the event that such a conflict of interest arises at a meeting of our directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases, we will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. From time to time, several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, involvement in a greater number of programs and reduction of the financial exposure with respect to any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In determining whether we will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to us, the degree of risk to which we may be exposed and its financial position at that time. Other than as indicated, we have no other procedures or mechanisms to deal with conflicts of interest. We are not aware of the existence of any conflict of interest as described herein. There have been no transactions or proposed transactions with officers and directors during the last two years to which we are a party except as follows: -31- In June 2005, 3,659,091 common shares were issued at $0.04 per share to settle debts of $161,000. The shares were issued to David Jenkins, a director who resides outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In July 2005 Klaus Eckhof, one of our directors and a named selling stockholder, purchased 3,500,000 shares at $0.05 per share. -32- SELLING STOCKHOLDERS The following table presents information regarding the Selling Stockholders. Neither the Selling Stockholders nor any of their affiliates has held a position or office, or had any other material relationship, with us. Unless otherwise indicated, the percentage of outstanding shares beneficially owned is based on 36,218,522 shares issued and outstanding at December 12, 2005. Information with respect to beneficial ownership is based upon information provided to us by the Selling Stockholders. Except as may be otherwise described below, to the best of our knowledge, the named Selling Stockholder beneficially owns and has sole voting and investment authority as to all of the shares set forth opposite his name.
- --------------------------------------------------------------------------------------------------- Percentage of Percentage of No. of Shares Issued and No. of Shares Issued and Beneficially Outstanding To Be Sold Outstanding Name and Address of Selling Owned Prior Shares Prior in This Shares Stockholder to the To the Offering Offering Owned After Offering the Offering - ----------------------------------- ------------- ---------------- ------------- -------------- Klaus Eckhof 3,500,000 9.66% 3,500,000 0% 30 Ledgar Road Balcatta, WA 6021 Australia - ----------------------------------- ------------- ---------------- ------------- -------------- Carrington International Ltd. 2,919,697 8.06% 1,500,000 3.92% Suite 2402, Bank of America Tower 12 Harcourt Road, Hong Kong - ----------------------------------- ------------- ---------------- ------------- -------------- Kastalia Ltd. 3,500,000 9.66% 3,500,000 0% Wickhams Cay 1, Road Town, Tortola, British Virgin Islands - ----------------------------------- ------------- ---------------- ------------- -------------- Dr. Andreas Reitmeier 3,500,000 9.66% 1,750,000 4.83% Graben 27, A-1010 Eien, Austria - ----------------------------------- ------------- ---------------- ------------- -------------- Manuela LBL 2,214,000 6.11% 1,750,000 1.28% Wagramer Str. 4, App 2406 A-1220 Wien, Austria - ----------------------------------- ------------- ---------------- ------------- -------------- Eva Schachner 500,000 1.38% 500,000 0% Biberstrasse 3, App 10 A-1010 Wien, Austria - ----------------------------------- ------------- ---------------- ------------- -------------- Daniel Garthe 500,000 1.38% 500,000 0% Hahnhofer Str. 36 D-67459 Bohl-Iggelheim, Germany - ---------------------------------------------------------------------------------------------------
(1) Shares acquired in the July 13, 2005 private placement. (2) Mr. Eckhof has been a director of the company since July 5, 2005. -33- Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person's actual ownership or voting power with respect to the number of shares of common stock actually outstanding on November 30, 2005. Because a Selling Stockholder may offer by this prospectus all or some part of the common shares which it holds, no estimate can be given as of the date hereof as to the number of common shares actually to be offered for sale by a Selling Stockholder or as to the number of common shares that will be held by a Selling Stockholder upon the termination of such offering. DESCRIPTION OF OUR CAPITAL STOCK Our authorized capital stock consists of 50,000,000 shares of common stock, par value $.001 per share. As of December 12, 2005 we had 36,218,522 shares of common stock outstanding. COMMON STOCK Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Accordingly, holders of a majority of the shares of our common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of our common stock are entitled to receive dividends ratably, if any, as may be declared from time to time by our board of directors out of funds legally available therefore. Upon our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive ratably, our net assets available after the payment of all liabilities. Holders of our common stock have no preemptive, subscription, redemption or conversion rights, and there are no redemption or sinking fund provisions applicable to the common stock. The outstanding shares of our common stock are, and the shares offered in this offering will be, when issued and paid for, duly authorized, validly issued, fully paid and nonassessable. DIVIDENDS We have not declared any cash dividends to date. We have no present intention of paying any cash dividends on our common stock in the foreseeable future, as we intend to use earnings, -34- if any, to generate growth. The payment of dividends, if any, in the future, rests within the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements and our financial condition, as well as other relevant factors. There are no restrictions in our Certificate of Incorporation or By-laws that restrict us from declaring dividends. REGISTRATION RIGHTS In connection with the private placement concluded in July of 2005, we granted the purchasers of the stock registration rights. The registration statement of which the prospectus is part, was filed in order to fulfill our obligations to those purchasers. SHARES ELIGIBLE FOR FUTURE SALE Future sales of a substantial number of shares of our common stock in the public market could adversely affect market prices prevailing from time to time. Under the terms of this offering, the shares of common stock offered may be resold without restriction or further registration under the Securities Act of 1933, except that any shares purchased by our "affiliates," as that term is defined under the Securities Act, may generally only be sold in compliance with Rule 144 under the Securities Act. SALE OF RESTRICTED SHARES Certain shares of our outstanding common stock were issued and sold by us in private transactions in reliance upon exemptions from registration under the Securities Act and have not been registered for resale. Additional shares may be issued pursuant to outstanding warrants and options. Such shares may be sold only pursuant to an effective registration statement filed by us or an applicable exemption, including the exemption contained in Rule 144 promulgated under the Securities Act. On December 12, 2005 we had outstanding 36,218,522 shares of common stock. Of these shares, approximately 9,618,854 are freely tradable by persons other than our affiliates, without restriction under the Securities Act; and 23,344,579 shares are restricted securities within the meaning of Rule 144 under the Securities Act and may not be sold unless an exemption from the registration requirements of the Securities Act is available (including 144). As at December 12, 2005, 24,354,971 shares were held by persons who may be deemed our affiliates and may only be sold publicly pursuant to Rule 144. In general, under Rule 144 as currently in effect, a stockholder, including one of our affiliates, may sell shares of common stock after at least one year has elapsed since such shares were acquired from us or our affiliate. The number of shares of common stock which may be sold within any three-month period is limited to the greater of: (i) one percent of our then outstanding common stock, or (ii) the average weekly trading volume in our common stock during the four calendar weeks preceding the date on which notice of such sale was filed under Rule 144. Certain other requirements of Rule 144 concerning availability of public information, manner of sale and notice of sale must also be satisfied. In addition, a stockholder who is not our -35- affiliate, who has not been our affiliate for 90 days prior to the sale, and who has beneficially owned shares acquired from us or our affiliate for over two years may resell the shares of common stock without compliance with many of the foregoing requirements under Rule 144. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES Our directors and officers are indemnified by our bylaws against amounts actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding in which they are a party by reason of being or having been our directors or officers or of our subsidiaries. Our articles of incorporation provide that none of our directors or officers shall be personally liable for damages for breach of any fiduciary duty as a director or officer involving any act or omission of any such director or officer. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to such directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by us of expenses incurred or paid by such director, officer or controlling person in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. LEGAL MATTERS The validity of the issuance of the common stock offered hereby will be passed upon for us by Sierchio Greco & Greco, LLP. EXPERTS Our financial statements at December 31, 2004, and for each of the two years in the period ending December 31, 2004 appearing in this prospectus and registration statement have been audited by Moore Stephens Ellis Foster Ltd., independent registered public accounting firm, as set forth in their report (which contains an explanatory paragraph describing conditions that raise substantial doubt about our ability to continue as a going concern as described in Note 1 to the financial statements) appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. WHERE YOU CAN FIND ADDITIONAL INFORMATION We file current, quarterly and annual reports with the U.S. Securities & Exchange Commission on forms 8-K, 10-QSB and 10-KSB. We have filed with the U.S. Securities & Exchange -36- Commission under the Securities Act of 1933 a registration statement on Form SB-2 with respect to the shares being offered in this offering. This prospectus does not contain all of the information set forth in the registration statement, certain items of which are omitted in accordance with the rules and regulations of the U.S. Securities & Exchange Commission. The omitted information may be inspected and copied at the Public Reference Room maintained by the U.S. Securities & Exchange Commission at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about operation of the Public Reference Room by calling the U.S. Securities & Exchange Commission at 1-800-SEC-0330. The U.S. Securities & Exchange Commission also maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the U.S. Securities & Exchange Commission at http://www.sec.gov. Copies of such material can be obtained from the public reference section of the U.S. Securities & Exchange Commission at prescribed rates. Statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are not necessarily complete and in each instance reference is made to the copy of the document filed as an exhibit to the registration statement, each statement made in this prospectus relating to such documents being qualified in all respects by such reference. For further information with respect to us and the securities being offered hereby, reference is hereby made to the registration statement, including the exhibits thereto and the financial statements, notes, and schedules filed as a part thereof. -37-
Aurora Gold Corporation Index to Financial Statements Page ---- INDEX TO FINANCIAL STATEMENTS - SEPTEMBER 30, 2005 (UNAUDITED) Balance Sheets F-3 September 30, 2005 and December 31, 2004 (audited) Statements of Operations F-4 Nine-months Ended September 30, 2005 Statements of Cash Flows F-5 Nine-months Ended September 30, 2005 Notes to Financial Statements F-6 INDEX TO FINANCIAL STATEMENTS - DECEMBER 31, 2004 (AUDITED) Report of Independent Registered Public Accounting Firm F-11 Balance Sheets F-12 Years Ended December 31, 2004 and 2003 Statements of Stockholders' Equity (Deficiency) F-13 Years Ended December 31, 2004 and 2003 Statements of Operations F-14 Years Ended December 31, 2004 and 2003 Statements of Cash Flows F-15 Years Ended December 31, 2004 and 2003 Notes to Financial Statements F-16 Years Ended December 31, 2004 and 2003
F 1 AURORA GOLD CORPORATION (An exploration stage enterprise) Financial Statements (EXPRESSED IN U.S. DOLLARS) September 30, 2005 and 2004 INDEX - ----- Balance Sheets Statements of Operations Statements of Cash Flows Notes to Financial Statements F 2
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 F 3
AURORA GOLD CORPORATION (An exploration stage enterprise) Cumulative Statements of Operations October 10 (Expressed in U.S. Dollars) 1995 (Unaudited) (inception) Three months Three months Nine months Nine months to September Ended Ended Ended Ended 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 Write-off 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 F 4
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 - - -write-off 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 F 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. F 6 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. (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 7 (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 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. F 8 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. 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. F 9 AURORA GOLD CORPORATION (An exploration stage enterprise) Financial Statements (EXPRESSED IN U.S. DOLLARS) December 31, 2004 and 2003 INDEX - ----- Report of Independent Registered Public Accounting Firm Balance Sheets Statements of Stockholders' Equity (Deficiency) Statements of Operations Statements of Cash Flows Notes to Financial Statements F 10 MOORE STEPHENS ELLIS FOSTER LTD. CHARTERED ACCOUNTANTS 1650 West 1st Avenue Vancouver, BC Canada V6J 1G1 Telephone: (604) 737-8117 Facsimile: (604) 714-5916 Website: www.ellisfoster.com ------------------- - -------------------------------------------------------------------------------- REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE BOARD OF DIRECTORS AND STOCKHOLDERS AURORA GOLD CORPORATION (An exploration stage enterprise) We have audited the balance sheets of AURORA GOLD CORPORATION (An exploration stage enterprise) ("the Company") as at December 31, 2004 and 2003, the statements of stockholders' equity (deficiency) for the years ended December 31, 2004 and 2003, and the statements of operations and cash flows for the years ended December 31, 2004 and 2003 and from October 10, 1995 (inception) to December 31, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2004 and 2003 and the results of their operations and their cash flows for the years ended December 31, 2004 and 2003 and from October 10, 1995 (inception) to December 31, 2004 in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Vancouver, Canada "MOORE STEPHENS ELLIS FOSTER LTD." March 15, 2005 Chartered Accountants - -------------------------------------------------------------------------------- MSEF A partnership of incorporated professionals An independently owned and operated member of Moore Stephens North America Inc., a member of Moore Stephens International Limited - members in principal cities throughout the world F 11
AURORA GOLD CORPORATION (An exploration stage enterprise) Balance Sheets December 31, 2004 and 2003 (EXPRESSED IN U.S. DOLLARS) - --------------------------------------------------------------------------------------------- 2004 2003 - --------------------------------------------------------------------------------------------- ASSETS CURRENT Cash $ 1,275 $ 15,327 Receivables 200 2,196 - --------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 1,475 17,523 MINERAL PROPERTIES (Note 3) - - EQUIPMENT (Note 4) 3,937 5,095 - --------------------------------------------------------------------------------------------- TOTAL ASSETS $ 5,412 $ 22,618 ============================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) LIABILITIES CURRENT Accounts payable and accrued liabilities $ 29,354 $ 7,799 Accounts payable - related party (Note 6) 121,942 - Loan payable - related party (Note 6) 39,000 - - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES 190,296 7,799 - --------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIENCY) SHARE CAPITAL Authorized: 50,000,000 common shares, with par value of $0.001 per share Issued: 19,534,431 (2003 - 19,434,431) common shares 19,534 19,434 ADDITIONAL PAID-IN CAPITAL 3,786,321 3,762,361 ACCUMULATED (DEFICIT) (3,990,739) (3,766,976) - --------------------------------------------------------------------------------------------- STOCKHOLDERS' EQUITY (DEFICIENCY) (184,884) 14,819 - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 5,412 $ 22,618 =============================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. F 12
AURORA GOLD CORPORATION (An exploration stage enterprise) Statements of Stockholders' Equity (Deficiency) Years Ended December 2004 and 2003 (EXPRESSED IN U.S. DOLLARS) - --------------------------------------------------------------------------------------------- Common Stock Additional Compre- ------------------- Paid-in hensive Shares Amount capital (loss) - --------------------------------------------------------------------------------------------- BALANCE, December 31, 2002 16,581,981 $16,582 $ 3,622,655 Issuance of common stock for - settlement of indebtedness 2,752,450 2,752 114,806 - - for cash in December 2003 at $0.25 per share 100,000 100 24,900 - Net (loss) for the period - - - (96,404) - --------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (96,404) BALANCE, December 31, 2003 19,434,431 19,434 $ 3,762,361 Issuance of common stock for - for cash in January 2004 at $0.25 per share, less issuance costs 100,000 100 22,400 - Imputed interest - - 1,560 - Net (loss) for the period - - - (223,763) - --------------------------------------------------------------------------------------------- Total comprehensive (loss) $(223,763) BALANCE, December 31, 2004 19,534,431 $19,534 $ 3,786,321 ============================================================================================= AURORA GOLD CORPORATION (An exploration stage enterprise) Statements of Stockholders' Equity (Deficiency) Years Ended December 2004 and 2003 (EXPRESSED IN U.S. DOLLARS) - ---------------------------------------------------------------------------------------------- Total Accumulated stock- other holders' Accumulated comprehensive equity (deficiency) income (loss) (deficiency) - ---------------------------------------------------------------------------------------------- BALANCE, December 31, 2002 $ (3,670,572) $ - $ (31,335) Issuance of common stock for - settlement of indebtedness - - 117,558 - for cash in December 2003 at $0.25 per share - - 25,000 Net (loss) for the period (96,404) - (96,404) - ---------------------------------------------------------------------------------------------- Total comprehensive (loss) - BALANCE, December 31, 2003 $ (3,766,976) $ - $ 14,819 Issuance of common stock for - for cash in January 2004 at $0.25 per share, less issuance costs - - 22,500 Imputed interest - - 1,560 Net (loss) for the period (223,763) - (223,763) - ---------------------------------------------------------------------------------------------- Total comprehensive (loss) BALANCE, December 31, 2004 $ (3,990,739) $ - $ (184,884) ==============================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. F 13
AURORA GOLD CORPORATION (An exploration stage enterprise) Statements of Operations (EXPRESSED IN U.S. DOLLARS) - ---------------------------------------------------------------------------------------------------- Cumulative October 10 Year Year 1995 (inception) Ended Ended to December 31 December 31 December 31 2004 2004 2003 - ---------------------------------------------------------------------------------------------------- GENERAL AND ADMINISTRATIVE EXPENSES Administrative and general $ 692,066 $ 32,979 $ 36,422 Depreciation and amortization 51,016 3,666 3,092 Imputed interest on loan payable - related party 1,560 1,560 - Interest, bank charges and foreign exchange loss (gain) 43,107 851 (677) Professional fees - accounting and legal 365,797 12,062 6,700 Property search and negotiation 185,401 52,563 49,277 Salaries and consulting fees 914,097 60,000 - - ---------------------------------------------------------------------------------------------------- 2,253,044 163,681 94,814 EXPLORATION EXPENSES 1,462,456 60,082 1,595 WRITE-OFF OF MINERAL PROPERTY COSTS 172,981 - - - ---------------------------------------------------------------------------------------------------- 3,888,481 223,763 96,409 - ---------------------------------------------------------------------------------------------------- OTHER INCOME (LOSS) Gain on disposition of subsidiary 216,474 - - Interest income 22,353 - 5 (Loss) on sale of investments (24,487) - - Operating (loss) of Spun-off operations (316,598) - - - ---------------------------------------------------------------------------------------------------- (102,258) - 5 - ---------------------------------------------------------------------------------------------------- NET (LOSS) FOR THE PERIOD $ (3,990,739) $ (223,763) $ (96,404) ==================================================================================================== EARNINGS (LOSS) PER SHARE - basic and diluted $ (0.01) $ (0.01) ==================================================================================================== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - basic and diluted 19,526,486 17,861,583 ====================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. F 14
AURORA GOLD CORPORATION (An exploration stage enterprise) Statements of Cash Flows (EXPRESSED IN U.S. DOLLARS) - ------------------------------------------------------------------------------------------------------- Cumulative October 10 Year Year 1995 (inception) Ended Ended to December 31 December 31 December 31 2004 2004 2003 - ------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES Net (loss) for the period $ (3,990,739) $ (223,763) $ (96,404) Adjustments to reconcile net loss to net cash used in operating activities: - depreciation and amortization 51,016 3,666 3,092 - compensation on stock options 720,500 - - - expenses satisfied with common stocks 497,300 - 80,222 - imputed interest on loan payable - relate party 1,560 1,560 - - write-off of mineral property costs 172,981 - - - adjustment for spin-off of Aurora Metals (BVI) Limited 316,498 - - - loss on sale of investments (Note 3) 24,487 - - Changes in assets and liabilities: - (increase) in receivables (207,178) 1,996 (345) - increase in accounts payable 569,453 143,497 2,775 - ------------------------------------------------------------------------------------------------------- NET CASH FLOW USED IN OPERATING ACTIVITIES (1,844,122) (73,044) (10,660) - ------------------------------------------------------------------------------------------------------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES Purchase of equipment (57,891) (2,508) - Proceeds on disposal of equipment 14,449 - - Acquisition of mineral property costs (172,981) - - Payment for incorporation cost (11,511) - - - ------------------------------------------------------------------------------------------------------- NET CASH FLOW USED IN INVESTING ACTIVITIES (227,934) (2,508) - - ------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of common stock, less issuance costs 2,002,339 22,500 25,000 Loan proceeds from related party 39,000 39,000 - Loan proceeds 31,992 - - - ------------------------------------------------------------------------------------------------------- NET CASH FLOW PROVIDED BY FINANCING ACTIVITIES 2,073,331 61,500 25,000 - ------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,275 (14,052) 14,340 CASH AND CASH EQUIVALENTS, beginning of period - 15,327 987 - ------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS, end of period $ 1,275 $ 1,275 $ 15,327 ======================================================================================================= SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid in cash $ - $ - Income taxes paid in cash $ - $ - =======================================================================================================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. F 15 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 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 financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to acquire mineral properties either directly or through the acquisition of operating entities. The Company has incurred recurring operating losses 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. SIGNIFICANT ACCOUNTING POLICIES (a) Principles of Accounting These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. (b) Accounting Estimates The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions. (c) Cash Equivalents Cash equivalents comprise certain highly liquid instruments with a maturity of three months or less when purchased. The Company did not have any cash equivalents as at December 31, 2004 and 2003. F 16 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (d) Equipment Depreciation is based on the estimated useful lives of the assets and is computed using the straight-line method. Equipment is recorded at cost. Depreciation is provided over the following useful lives: Computer equipment 2 years Office equipment 5 years Telecommunication equipment 5 years (e) 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. (f) Advertising Expenses The Company expenses advertising costs as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2004 and 2003. (g) Foreign Currency Transactions The Company is located and operates outside of the United States of America. It maintains its accounting records in U.S. dollars, as follows: At the transaction date, each asset, liability, revenue and expense is translated into U.S. dollars by the use of the exchange rate in effect at that date. At the period end, monetary assets and liabilities are translated into U.S. dollars by using the exchange rate in effect at that date. The resulting foreign exchange gains and losses are included in operations. (h) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. The Company rarely maintains balances in a financial institution beyond the insured amount. As of December 31, 2004 and 2003, the Company has no deposit in a bank beyond insured limits. F 17 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (i) 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. (j) Fair Value of Financial Instruments Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgement, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair value. The carrying value of cash, receivables, accounts payable and accrued liabilities, accounts payable - related party, and loan payable - related party approximate their fair value because of the short-term nature of these instruments. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The Company operates outside of the United States of America and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates in and the U.S. dollar. (k) Intangible Assets The Company adopted the Statement of Financial Accounting Standards No. 142 (SFAS 142) Goodwill and Other Intangible Assets which requires that goodwill and intangible assets with indefinite life are not amortized but rather tested at least annually for impairment. Intangible assets with a definite life are required to be amortized over its useful life or its estimated useful life. The Company does not have any goodwill or intangible assets with indefinite or definite life. F 18 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (l) 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 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. (m) 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. (n) Earnings (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. F 19 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Comprehensive Income The Company has adopted the Statement of Financial Accounting Standards No. 130 (SFAS 130), Reporting Comprehensive Income, which establishes standards for reporting and display of comprehensive income, its components and accumulated balances. The Company is disclosing this information on its Statement of Stockholders' Equity (Deficiency). Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. (p) New Accounting Pronouncements In November 2004, the FASB issued SFAS No. 151, "Inventory Costs - an amendment of ARB No. 43, Chapter 4", which is the result of the FASB's project to reduce differences between U.S. and international accounting standards. SFAS No. 151 requires idle facility costs, abnormal freight, handling costs, and amounts of wasted materials (spoilage) be treated as current-period costs. Under this concept, if the costs associated with the actual level of spoilage or production defects are greater than the costs associated with the range of normal spoilage or defects, the difference would be charged to current-period expense, not included in inventory costs. SFAS No. 151 will be effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The adoption of SFAS No. 151 will not have a material impact on the Company's financial statements. In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB No. 29, Accounting for Nonmonetary Transactions. SFAS No. 153 requires exchanges of productive assets to be accounted for at fair value, rather than at carryover basis, unless (1) neither the asset received nor the asset surrendered has a fair value that is determinable within reasonable limits or (2) the transactions lack commercial substance. SFAS 153 is effective for nonmonetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. The adoption of FASB No. 153 will not have a material impact on the Company's financial statements. F 20 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (p) New Accounting Pronouncements (continued) In December 2004, the FASB issued SFAS No. 123(R), "Accounting for Stock-Based Compensation". SFAS 123(R) establishes standards for the accounting for transactions in which an entity exchanges its equity instruments for goods or services. This Statement focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. SFAS 123(R) requires that the fair value of such equity instruments be recognized as expense in the historical financial statements as services are performed. Prior to SFAS 123(R), only certain pro-forma disclosures of fair value were required. SFAS 123(R) shall be effective for the Company as of the beginning of the first interim or annual reporting period that begins after December 15, 2005. The adoption of FASB No. 123(R), will not have a material impact on the Company's financial statements. 3. MINERAL PROPERTIES AND EXPLORATION EXPENSES BRITISH COLUMBIA, CANADA - KUMEALON PROPERTY In February 1999, the Company acquired, by staking, a 741 acre limestone property located on the north shore of Kumealon Inlet, southeast of Prince Rupert, British Columbia, Canada. A finder's fee of 25,000 shares of common stock was paid in connection with these claims. In fiscal year 2000, there were no proven mineral reserves discovered and the Company continuously operated with a working capital deficiency. These conditions raised substantial doubt regarding the recovering of the capitalized acquisition cost. Therefore, pursuant to guidance established in Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-live Assets and for Long-lived Assets to be Disposed of", the Company wrote off the capitalized acquisition cost of $23,630 to operations. The Company's interest in this property is still in good standing. ALASKA, USA - GUNSITE, LUCKY SHOT, ZACKLY PROPERTIES On September 10, 2004, the Company entered into three (3) Binding Letters of Intent ("Letters") whereby the Company was granted options to purchase an interest in three mineral exploration properties located in the State of Alaska. The three mineral exploration properties are the Lucky Shot Property (60% working interest) in the Palmer Recording District, State of Alaska, the Gunsite Property (70% working interest) in the Talkeetna Recording District, State of Alaska and the Zackly Property (70% working interest) in the Talkeetna Recording District, State of Alaska. Upon signing of the Letters, the Company made a cash payment of $5,000 per property (total of $15,000) in accordance with the terms of the Letters. In March 2005, the Company decided to terminate all three Letters of Intent. F 21 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 4. EQUIPMENT
------------------------------------------------- 2004 2003 ------------------------------------------------- Computer equipment $ 17,633 $ 15,125 Office equipment 13,583 13,583 Telecommunication equipment 1,875 1,875 ------------------------------------------------- 33,091 30,583 Accumulated depreciation (29,154) (25,488) ------------------------------------------------- $ 3,937 $ 5,095 =================================================
5. STOCK OPTIONS In 1997, the Company's Board of Director approved a stock options plan ("the Plan") to offer an inducement to obtain services of key employees, directors and consultants of the Company. The maximum number of shares issuable under the Plan in any calendar year shall be an amount equal to 15% of the issued and outstanding common stock on January 1 of each year. Under the Plan, the exercise price of an incentive stock option must be at least equal to 100% of the fair market value of the common stock on the date of grant (110% of fair market value in the case of options granted to employees who hold more than 10% of the company's capital stock on the date of grant). The exercise price of a non-qualified stock option must not be less than the par value of a share of the common stock on the date of the grant. The term of an incentive or non-qualified stock option is not to exceed five years. There were no stock options granted during the fiscal years 2004 and 2003. 6. RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements: (a) During the fiscal year 2004, salaries and consulting fees of $60,000 (2003 - Nil) were paid to a director. This transaction was recorded at the exchange amount, being the value established and agreed to by the related parties. As at December 31, 2004, the amount is included in Accounts payable - related party. (b) Included in accounts payable - related party as at December 31, 2004 is an amount payable to a director of the Company for various expenses incurred on behalf of the Company. (c) Loan payable as at December 31, 2004 of $39,000 is payable to a director of the Company. The amount is non-interest bearing, unsecured and has no stated terms of repayment. The Company recorded imputed interest of $1,560 (2003 - $nil) at an interest rate of 4% per annum. F 22 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 7. NON-CASH INVESTING AND FINANCING ACTIVITIES In fiscal year 2003, the Company issued 746,750 shares of common stock for settlement of $37,336 of debt incurred in 2002 and 2,005,700 shares for payment of $80,222 of expenses incurred in 2003. 8. INCOME TAXES (a) The Company has net losses for tax purposes totaling approximately $2,921,000 which may be applied against future taxable income. Accordingly, there is no tax expense for the years ended December 31, 2004 and 2003. The potential tax benefits arising from these losses have not been recorded in the financial statements. The Company evaluates its valuation allowance requirements on an annual basis based on projected future operations. When circumstances change and this causes a change in management's judgment about the realizability of deferred tax assets, the impact of the change on the valuation allowance is reflected in current operations. The right to claim these losses expires as follows:
-------------------------- 2011 $ 231,000 2012 564,000 2018 331,000 2019 795,000 2020 550,000 2022 138,000 2023 90,000 2024 222,000 -------------------------- $2,921,000 ==========================
(b) The tax effects of temporary difference that give rise to the Company's deferred tax asset are as follows:
---------------------------------------------- 2004 2003 ---------------------------------------------- Tax loss carryforwards $ 993,000 $ 917,000 Valuation allowance (993,000) (917,000) ---------------------------------------------- $ - $ - ==============================================
F 23 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 9. SUBSEQUENT EVENTS (a) In March 2005, the Company signed an agreement ("Matupa Agreement") with CCO Mineracao Ltda. ("CCO") of Belo Horizonte, Minas Gerais, Brazil to purchase a 100% interest in the Matupa Gold Project located in northern Mato Grosso State, Brazil. The Matupa Agreement also covers surface rights access for both exploration and mining activity. The Matupa Agreement calls for the Company to pay CCO a total of US$3,350,000 over a five and one-half year period. The Matupa Agreement also covers surface rights access for both exploration and mining activity. In accordance with the Matupa Agreement, the Company is required to pay CCO: i. US $20,000 on signing; ii. an additional US $50,000 on the four month anniversary of the Matupa Agreement; iii. an additional US $80,000 on the nine month anniversary of the Matupa Agreement; iv. an additional US $150,000 on the eighteen month anniversary of the Matupa Agreement; and v. additional escalating annual payments until the final US $1,300,000 payment is made on the sixty-sixth month anniversary of the Matupa Agreement. On completion of the payment schedule, CCO is entitled to a minimum advance royalty payments of US $240,000 per year. CCO will receive a 2.25% net smelter return royalty when the property is in production. The Matupa Agreement can be terminated at any time after a 30-day notice is given. (b) In March 2005, The Company signed a Right of First Refusal Agreement ("RFR Agreement") with Neuer Kapital Corp. ("Neuer") whereby the Company has granted to Neuer a 60-day First Right of Refusal to purchase all of the Company's interest in the Matupa Gold Project. In accordance with the RFR Agreement, upon approval of the Agreement by the TSX Venture Exchange and no later than 10 days after providing Aurora with the RFR Exercise Notice, Neuer is required to: i. pay the Company US $50,000; ii. issue to the Company 150,000 common shares of Neuer; iii. pay to the Company up to US $20,000 of the direct out-of-pocket costs incurred by the Company in connection with the Matupa Agreement; iv. pay to the Company all other payments paid by the Company to CCO up to the Closing Date in connection with the Matupa Agreement. F 24 AURORA GOLD CORPORATION (AN EXPLORATION STAGE ENTERPRISE) NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003 (EXPRESSED IN U.S. DOLLARS) 9. SUBSEQUENT EVENTS (continued) On the Closing Date, the Company will assign all of its rights, title and interest in and to the Matupa Agreement to Neuer. Within six months following the Closing Date, Neuer has agreed to pay to Aurora Gold an additional US $50,000 and issue an additional 150,000 common shares of Neuer. The Company will pay a finders fee with respect to the CCO/Aurora Matupa Agreement to a private United Kingdom citizen. See Note 3. 10. CUMULATIVE FIGURES Certain 2003 cumulative figures have been reclassified to conform with the financial statement presentation adopted for 2004. F 25 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS Section 145 ("Section 145") of the Delaware General Corporation Law, as amended (the "DGCL"), permits indemnification of directors, officers, agents and controlling persons of a corporation under certain conditions and subject to certain limitations. Section 145 empowers a corporation to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was a director, officer or agent of the corporation or another enterprise if serving at the request of the corporation. Depending on the character of the proceeding, a corporation may indemnify against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding if the person indemnified acted in good faith and in a manner he or she reasonably believed to be in or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of an action by or in the right of the corporation, no indemnification may be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine that despite the adjudication of liability such person is fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Section 145 further provides that to the extent a present or former director or officer of a corporation has been successful in the defense of any action, suit or proceeding referred to above or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The estimated expenses of this offering, all of which are to be paid by the registrant, are as follows:
U.S. Securities & Exchange Commission Registration Fee $ 946 ------------------------------------- ------- Accounting Fees and Expenses $ 2,500 ------------------------------------- ------- Legal Fees and Expenses $25,000 ------------------------------------- ------- Transfer Agent Fees $ 500 ------------------------------------- ------- Miscellaneous Expenses $ 6,054 ------------------------------------- ------- TOTAL $35,000 ------------------------------------- -------
II 1 The foregoing amounts are only estimates, actual expenditures may be more or less. ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES During the past three years, we have offered and sold the following shares of common stock which were not registered under the Securities Act of 1933, as amended. During Fiscal 2002, 3,708,038 common shares were issued at prices ranging from $0.05 to $0.15 per share to settle debts of $355,200. The shares were issued to a director, David Jenkins, and a corporation controlled by David Jenkins, both of whom reside outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). During Fiscal 2003, 2,752,450 common shares were issued at prices ranging from $0.04 to $0.05 per share to settle debts of $117,558. The shares were issued to a director, David Jenkins, who resides outside the United States (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In December 2003, 100,000 common shares were issued at $0.25 per share for cash proceeds of $25,000. The shares were issued to an individual who resides outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In January 2004, 100,000 common shares were issued at $0.25 per share for cash proceeds of $25,000. The shares were issued to an individual who resides outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In June 2005, 3,659,091 common shares were issued at $0.04 per share to settle debts of $161,000. The shares were issued to a director, David Jenkins, who resides outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In June 2005, 25,000 common shares were issued at $0.06 per share to settle debts of $1,500. The shares were issued to an individual who resides outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). In July 2005, 13,000,000 common shares were issued at $0.05 per share for cash proceeds of $650,000. The shares were issued to individuals and companies who reside outside the United States of America (in accordance with the exemption from registration requirements afforded by Regulation S as promulgated thereunder). Mr. Thomas Eckhof, one of our directors and a Selling Stockholder, purchased 3,500,000 shares. II 2 ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following Exhibits are attached hereto: EXHIBIT DESCRIPTION OF EXHIBIT AND FILING REFERENCE NUMBER 3.1.1 Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.1.2 Certificate of Amendment to the Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.1.3 Certificate of Restoration and Renewal of Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.2.1 By-laws incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.2.2 Amended and Restated By-laws incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 5.1 Opinion of Sierchio Greco & Greco, LLP, regarding the legality of the securities being registered* 10.1.1 Consulting Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation 10.1.2 Confidentiality Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation 10.2.1 Assignment of Novo Porto and Santa Clara Memorandum of Understanding to Aurora Gold Corporation 10.2.2 Novo Porto Memorandum of Understanding 10.2.3. Declaration of Translator for translation of Porto Novo Memorandum of Understanding from Portuguese to English 10.2.4 Santa Clara Memorandum of Understanding 10.2.5 Declaration of Translator for translation of Santa Clara Memorandum of Understanding from Portuguese to English 10.3.1 Assignment of Ouro Mil Memorandum of Understanding to Aurora Gold Corporation 10.3.2 Ouro Mil Memorandum of Understanding II 3 10.3.3 Declaration of Translator for translation of Ouro Mil Memorandum of Understanding from Portuguese to English 10.4.1 Assignment of Sao Domingo Memorandum of Understanding to Aurora Gold Corporation 10.4.2 Sao Domingo Memorandum of Understanding 10.4.3 Declaration of Translator for translation of Sao Domingo Memorandum of Understanding from Portuguese to English 23.1 Consent of Sierchio Greco & Greco, LLP (included in Exhibit 5.1)* 23.2 Consent of Moore Stephens Ellis Foster LLP *To be filed by amendment. ITEM 28. UNDERTAKINGS The undersigned registrant hereby undertakes: (1) To file, during any period in which it offers or sells securities, a post-effective amendment to this registration statement to: (i) Include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) Reflect in the prospectus any facts or events which, individually or together, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) Include any additional or changed material information on the plan of distribution. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II 4 (3) To file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described under Item 24 above, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. II 5 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements of filing on Form SB-2 and authorizes this registration statement to be signed on its behalf by the undersigned, in the City of Vancouver, Province of British Columbia, on the December 15, 2005. In accordance with the requirements of the Securities Act of 1933, this Registration Statement was signed by the following persons in the capacities and on the dates stated: - ------------------------------------------------------------------- Name Title Date - ----------------------- ---------------------- ------------------ /S/"CAMERON RICHARDSON" Director and Principal December 15, 2005 - ----------------------- Accounting Officer CAMERON RICHARDSON President - ----------------------- ---------------------- ------------------ /S/"KLAUS ECKHOF" Director December 15, 2005 - ----------------------- KLAUS ECKHOF - ----------------------- ---------------------- ------------------ /S/"ANTONIO G. CACACE" Director December 15, 2005 - ----------------------- ANTONIO G. CACACE - ------------------------------------------------------------------- POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints A. Cameron Richardson, his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all Amendments (including post-effective Amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. - ------------------------------------------------------------------- /S/"KLAUS ECKHOF" Director December 15, 2005 - ---------------------- KLAUS ECKHOF - ----------------------- ---------------------- ------------------ /S/"ANTONIO G. CACACE" Director December 15, 2005 - ---------------------- ANTONIO G. CACACE - ------------------------------------------------------------------- II 6 Aurora Gold Corporation Registration Statement On Form SB-2 Index to Exhibits 3.1.1 Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.1.2 Certificate of Amendment to the Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.1.3 Certificate of Restoration and Renewal of Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.2.1 By-laws incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 3.2.2 Amended and Restated By-laws incorporated by reference to the registration statement on Form 10SB filed on June 4, 1998. 5.1 Opinion of Sierchio Greco & Greco, LLP, regarding the legality of the securities being registered* 10.1.1 Consulting Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation 10.1.2 Confidentiality Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation 10.2.1 Assignment of Novo Porto and Santa Clara Memorandum of Understanding to Aurora Gold Corporation 10.2.2 Novo Porto Memorandum of Understanding 10.2.3. Declaration of Translator for translation of Porto Novo Memorandum of Understanding from Portuguese to English 10.2.4 Santa Clara Memorandum of Understanding 10.2.5 Declaration of Translator for translation of Santa Clara Memorandum of Understanding from Portuguese to English 10.3.1 Assignment of Ouro Mil Memorandum of Understanding to Aurora Gold Corporation 10.3.2 Ouro Mil Memorandum of Understanding II 7 10.3.3 Declaration of Translator for translation of Ouro Mil Memorandum of Understanding from Portuguese to English 10.4.1 Assignment of Sao Domingo Memorandum of Understanding to Aurora Gold Corporation 10.4.2 Sao Domingo Memorandum of Understanding 10.4.3 Declaration of Translator for translation of Sao Domingo Memorandum of Understanding from Portuguese to English 23.1 Consent of Sierchio Greco & Greco, LLP (included in Exhibit 5.1)* 23.2 Consent of Moore Stephens Ellis Foster LLP *To be filed by amendment. II 8 EX-10.1.1 2 ex10_11.txt EXHIBIT 10.1.1 Exhibit 10.1.1 August 30, 2005 Mr. Hans W. Biener SupplyConsult GbR Karolineplatz 5a 80333 M nchen, Germany Dear Hans, AURORA GOLD CORPORATION - CONTRACT GEOLOGICAL APPOINTMENT - TERMS AND CONDITIONS We are pleased to provide the Terms and Conditions relating to provision of contract geological services ("Services") to be provided by you to Aurora Gold Corporation ("Aurora" or the "Company") and its affiliates. 1. SERVICES The Services will include the direction, control and reporting of field geological programs, in the capacity of Project Manager - Brazil, for Aurora and its affiliates. More specifically to: (i) prepare exploration programs, professional and field labour requirements, budgets and schedules in conjunction with Aurora's personnel for Aurora's internal review and approval; (ii) implement and work to the agreed programs, budgets and schedules; (iii) assess the desirability of acquiring additional exploration permits and/or licences and relinquishing other exploration permits and/or licences held under Memorandum(s) of Understanding, Joint Venture(s), Property Option(s) or any other form of Agreements by Aurora's nominees, affiliates or by Aurora in its own right; (iv) prepare geological reports as will be required by Aurora; and (v) liaise with Aurora's technical representative(s), Brazilian government entities, Aurora's Brazilian administrative, legal and accounting representatives as may be required. 2. LOCATION AND WORKING ARRANGEMENTS The Services will be provided primarily in Brazil on a "fly-in, fly-out" basis with field stints of duration from four to six weeks as dictated by the field programs, Aurora's reporting requirements and personal commitments. Return to Munich, Germany for rest and recreation periods after each field stint will be agreed and included in the schedules. CONTRACT GEOLOGICAL APPOINTMENT Page 2 of 3 AUGUST 30, 2005 AURORA GOLD CORPORATION AND HANS W. BIENER 3. REPORTING In the main, you will report to Klaus E. Eckhof on the progress of the field programs and other matters relating to Aurora's interests. It will also be necessary for you to report to Mr. A. Cameron Richardson, President of Aurora, from time to time, and liaise with Aurora's other technical, audit or legal representatives who are yet to be nominated. Aurora's intentions are to minimize the amount of time you will be required to spend on administrative duties and non-technical reporting both in Brazil and Vancouver. 4. REMUNERATION (i) Remuneration for the Services will be at the rate of 3,000.00 euros per calendar month. Expenses incurred by you while carrying out Aurora's business will be reimbursed. (ii) An invoice should be submitted to A. Cameron Richardson at the end of each month. Each invoice should show details of time engaged on Aurora's work, the fixed amount of 3,000.00 euros and itemized expenses, with receipts, relating thereto. (iii) The Company will pay costs associated with overseas coverage for workers' compensation for performance of the Services. 5. TRAVEL, ACCOMMODATION AND LIVING EXPENSES 5.1 TRAVEL Air travel will be by round trip coach/economy class between Munich, Germany and Brazil. Bookings should be made through the Company's Vancouver office. Alternative arrangements can be made after prior agreement with the Company. A vehicle will be provided in Brazil in association with performance of the Services. 5.2 ACCOMMODATION AND LIVING EXPENSES The Company will provide accommodation and cover reasonable living expenses in Brazil. It is envisaged that furnished accommodation, housekeeping, cooking and laundry services will be established in a suitable town within close proximity to the main work areas. 6. TENURE Tenure for the Services is for an initial period of six (6) months commencing on September 1, 2005. Tenure may be extended according to the results of the exploration programs in Brazil and the Company should be in a position to discuss extension on, or about, February 28, 2006. The Services may be terminated by you or the Company, by either party giving to the other not less than one month's notice in writing. CONTRACT GEOLOGICAL APPOINTMENT Page 3 of 3 AUGUST 30, 2005 AURORA GOLD CORPORATION AND HANS W. BIENER 7. CONFIDENTIALITY A Confidentiality Agreement is appended to these Terms and Conditions and we ask that you sign both copies, retaining one copy for your records and returning the other. If you have any questions relating to the foregoing Terms and Conditions, please do not hesitate to contact the undersigned. We look forward to a working arrangement which is satisfying to you, and which advances Aurora's corporate objectives. Yours sincerely, AURORA GOLD CORPORATION /s/"A Cameron Richardson" - --------------------------- A. CAMERON RICHARDSON President I hereby agree to the Terms and Conditions relating to the Contract Geological Appointment outlined in the foregoing letter. /s/"Hans W Biener" - -------------------- HANS W. BIENER SUPPLYCONSULT GbR EX-10.1.2 3 ex10_12.txt EXHIBIT 10.1.2 Exhibit 10.1.2 CONFIDENTIALITY AGREEMENT THIS CONFIDENTIALITY AGREEMENT (the "Agreement") is entered into and is effective as of August 30, 2005 by and between Aurora Gold Corporation ("Aurora"), and Hans W. Biener of SupplyConsult GbR. ("SupplyConsult".) I. DEFINITION OF CONFIDENTIAL INFORMATION SupplyConsult will have access to certain confidential information regarding the properties held by Aurora, and its affiliates, in Brazil. The Parties acknowledge that the terms and conditions of this Agreement, the nature and existence of the discussions between the Parties and information concerning the properties held by Aurora, and its affiliates, and other information, including, but not limited to: (i) information relating to the property, assets, financial, marketing, organizational, trading position and business opportunities of Aurora and its affiliates; (ii) information relating to the officers, directors, employees and shareholders of Aurora and its affiliates; and (iii) any other information which may from time to time be identified by Aurora, and its affiliates, as being of a confidential nature and as being subject to the terms and conditions of this Agreement, will be considered confidential ("Confidential Information"). Confidential Information shall not include information that is now, or subsequently becomes, generally available to the public through no fault or breach of the party receiving such information. II. PROPERTY SupplyConsult agrees that all Confidential Information that is in, or on, any medium, including without limitation, written, printed, photographic, or magnetic tape, computer disc and other property, delivered by Aurora, and its affiliates, or made available to SupplyConsult, or otherwise obtained for purposes related to this Confidentiality Agreement, is and remains the sole property of Aurora, and its affiliates. Without the prior consent of Aurora, SupplyConsult agrees not to make or give permission to make, copies of any Confidential Information provided by Aurora, and its affiliates, or otherwise obtained by SupplyConsult or his employees, contractors or agents. III. PROJECT DISCUSSIONS It is understood that the discussions relating to the properties are confidential. No public announcement covering such discussions or concerning the existence thereof will be made by SupplyConsult except if required by law and upon notice to Aurora. CONFIDENTIALITY AGREEMENT Page 2 of 4 AUGUST 30, 2005 AURORA GOLD CORPORATION AND HANS W. BIENER IV. AREA OF INTEREST SupplyConsult agrees not to seek acquisition of rights in private or public land within four kilometres of the boundaries of the Exploration Licences and/or Exploration Concessions currently held by Aurora and its affiliates, and which may subsequently be obtained by Aurora, its affiliates or its nominees. V. EMPLOYEE CONFIDENTIALITY SupplyConsult agrees that they shall promptly identify to Aurora the names of SupplyConsult's employees, contractors and agents who will have access to Confidential Information and that SupplyConsult shall require each person to provide SupplyConsult with a written acknowledgement, in the form set forth as Exhibit A hereto, that such person has read and understood this Confidentiality Agreement, and personally agrees to comply with the terms thereof, excepting, however, any employee already bound to SupplyConsult's standard confidentiality agreement. VI. FURTHER ASSURANCES SupplyConsult agrees to take such other actions and to execute such other documents from time to time, as Aurora feels are necessary or advisable to effectuate the intent hereof. VII. TERMS This Confidentiality Agreement shall terminate two (2) years from the date hereof unless the Parties agree in writing to amend this Clause VII. Terms and/or other clauses contained within the Agreement. VIII.INJUNCTIVE RELIEF The Parties expressly acknowledge and agree that any breach of this Agreement by either party would cause irreparable harm to the other party for which damages would not be adequate remedy and, therefore, the Parties hereby agree that, in the event of any breach by either of the Parties to this Agreement, the other party shall have the right to seek injunctive relief against the continuing or further breach by the party breaching the terms of the Agreement without the necessity of proof of actual damages. This right to seek injunctive relief without necessity of proof of damage shall be in addition to any other right which the Parties may have under this Agreement or otherwise in law or in equity. CONFIDENTIALITY AGREEMENT Page 3 of 4 AUGUST 30, 2005 AURORA GOLD CORPORATION AND HANS W. BIENER IN WITNESS WHEREOF, the Parties have caused the Agreement to be executed by their duly authorized officers the date first written below. AURORA GOLD CORPORATION By: A. Cameron Richardson ---------------------------- Its: President ---------------------------- Signed: /s/"A Cameron Richardson" ------------------------- Accepted this 31 day of August 2005 SUPPLYCONSULT GBR By: Hans W. Biener ----------------------------- Its: President ----------------------------- Signed: /s/"Hans W Biener" ------------------------- Attachment - Exhibit A CONFIDENTIALITY AGREEMENT Page 4 of 4 AUGUST 30, 2005 AURORA GOLD CORPORATION AND HANS W. BIENER EXHIBIT A ACKNOWLEDGMENT AND CONFIDENTIALITY OBLIGATION The undersigned hereby acknowledges that he/she has read and understands that certain Confidentiality Agreement dated August 30, 2005by Aurora Gold Corporation ("Aurora"), and SupplyConsult. In consideration of the undersigned's employment, or engagement, by SupplyConsult and receipt of the Confidentiality Information as described in such Agreement, the undersigned agrees to comply with all the obligations of SupplyConsult in such Agreement as fully and to the same extent as if the undersigned were signatory thereto. Acknowledged and agreed to this day______of___________, 2005. Company Name: --------------------------- Name: ---------------------------------- Address: ------------------------------- ------------------------------- ------------------------------- EX-10.2.1 4 ex10_21.txt EXHIBIT 10.2.1 Exhibit 10.2.1 HANS W. BIENER SUPPLYCONSULT GbR Karolinenplatz 5a 80333 Munchen, Germany Telephone: (+49) 178-7577784, Facsimile: (+49) 8091-561044 E-mail: hw.b@supplyconsult.de September 6, 2005 Mr. Klaus Eckhof Aurora Gold Corporation 30 Ledgar Road, Balcatta, Western Australia 6021 Australia Dear Mr. Eckhof, Re: Assignment of the 100 percent interest in the Novo Porto Memorandum of Understanding and the Santa Clara Memorandum of Understanding held in trust for Aurora Gold Corporation This letter will acknowledge that I, Hans W. Biener, on behalf of SupplyConsult GbR, am holding in trust for the exclusive benefit of Aurora Gold Corporation, a Delaware corporation, a 100 percent interest in the Novo Porto Memorandum of Understanding dated September 5, 2005 and the Santa Clara Memorandum of Understanding dated September 5, 2005. The Novo Porto Memorandum of Understanding covers two exploration licences. Block 1 registered in the name of Alvaro da Silva Souza and Block 2 registered in the name of Galdino Antonino da Silva Luz are located in the region of the Basin of Tocantins River and around some of its arms, Garimpo Novo Porto and Fazenda Agroextrativista Mineral Brilhante, in the Municipality of Itaituba, State of Para and are covered by the Processes DNPM numbers: Block 1 consists of the following DNPMs numbers: DNPMs 852875/94-Area-08 to 852906/94-Area-39 DNPMs 852908/94-Area-41 to 852912/94-Area-45 DNPMs 852914/94-Area 47 to 852918/94-Area-51 DNPMs 852920/94-Area 53 to 852924/94-Area-57 DNPMs 852926/94-Area-59 to 852929/94-Area-63 DNPMs 852931/94-Area-65 to 852934/94-Area-68 DNPMs 852936/94-Area-71 to 852942/94-Area-81 DNPMs 852944/94-Area-83 to 852948/94-Area-87 DNPMs 852957/94-Area-89 to 852961/94-Area-93 DNPMs 852963/94-Area-95 to 852967/94-Area-99 DNPMs 852969/94-Area101 to 852973/94-Area-105 DNPMs 852975/94-Area-107 to 852979/94-Area-111 DNPMs 852981/94-Area-113 to 852985/94-Area-117 DNPMs 852987/94-Area-119 to 852991/94-Area-123 DNPMs 852993/94-Area-125 to 852997/94-Area-129 DNPMs 852999/94-Area-131 to 853000/94-Area-132 Block 2 consists of the following DNPMs numbers: DNPMs 852826/94-Area-01 to 852829/94-Area-04 DNPMs 852831/94-Area-06 to 852832/94-Area-07 DNPMs 852834/94-Area-09 to 852837/94-Area-12 DNPMs 852839/94-Area-14 to 852840/94-Area-15 DNPMs 852842/94-Area-17 to 852845/94-Area-20 DNPMs 852847/94-Area-22 to 852848/94-Area-23 DNPMs 852850/94-Area-25 to 852865/94-Area-40 and Application for Survey Authorization DNPM No. 850566/2005-77 The Santa Clara Memorandum of Understanding covers two exploration licences. Block 1 registered in the name of Antonio Garcia Bernardes and Block 2 registered in the name of Galdino Antonino da Silva Luz are located in the region of the Basin of Crepori River and around some of its arms. Garimpo Santa Clara is located in the mineral bearing grounds of Marupa II and Surubim, in the Municipality of Itaituba, State of Para and are covered by the Processes DNPM numbers: Block 1 consists of the following DNPM numbers: DNPM 852718/94-Area-01 DNPM 852719/94-Area-03 DNPM 852720/94-Area-05 DNPM 852721/94-Area-07 DNPM 852722/94-Area-09 DNPM 852723/94-Area-12 DNPM 852724/94-Area-14 DNPM 852725/94-Area-16 DNPM 852726/94-Area-18 DNPM 852727/94-Area-20 DNPM 852728/94-Area-22 DNPM 852729/94-Area 24 DNPM 852730/94-Area-26 DNPM 852731/94-Area-28 DNPM 852732/94-Area-30 DNPM 852733/94-Area-32 ANPM 852734-94-Area-34 DNPM 852735/94-Area-36 DNPM 852736/94-Area-38 Block 2 consists of the following DNPM numbers: DNPM 852741/94-Area-02 DNPM 852742/94-Area-04 DNPM 852743/94-Area-06 DNPM 852744/94-Area-08 DNPM 852745/94-Area-10 DNPM 852746/94-Area-11 DNPM 852747/94-Area-13 2 DNPM 852748/94-Area-15 DNPM 852749/94-Area-17 DNPM 852750/94-Area-19 DNPM 852751/94-Area-21 DNPM 852752/94-Area-23 DNPM 852753/94-Area-25 DNPM 852754/94-Area-27 DNPM 852755/94-Area-29 DNPM 852756/94-Area-31 DNPM 852757/94-Area-33 DNPM 852758/94-Area-35 DNPM 852759/94-Area-37 I irrevocably transfer the 100 percent interest in the Novo Porto Memorandum of Understanding and the Santa Clara Memorandum of Understanding to Aurora Gold Corporation without further consideration. Yours truly, /s/"Hans W Biener" - -------------------- SUPPLYCONSULT GbR Hans W. Biener 3 EX-10.2.2 5 ex10_22.txt EXHIBIT 10.2.2 Exhibit 10.2.2 - English translated version of Portuguese document MEMORANDUM OF UNDERSTANDING By this present Agreement entered into by, on the one side, Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5, 80333, Muenchen, hereinafter referred to as "SUPPLY", in this act represented by its Director General, Hans W. Biener, bearing the passport no. 3208063701 issued by the Federal Republic of Germany, and on the other side, lvaro da Silva Souza, Brazilian, single, prospector, bearing the Identity Card No. RG 75528 issued by SSP-RO, and duly enrolled in the Individual Taxpayer's Register under no. CIC 414.532.112-72, and Galdino Antonio da Silva Luz, Brazilian, married, aeronaut and miner prospector, thus legally established, born in Porto Alegre, RS, bearing the Identity Card No. RG 177562 issued by SSP-RR, and duly enrolled in the Individual Taxpayer's Register under no. CPF 161.023.550-91, and also holding a power of attorney for the above-mentioned prospector, both with address at Av. Dr. Hugo de Mendon a, n degree 420, Caixa Postal 034 - Bairro Centro, in the city of Itaituba, state of Para, Postal Code CEP 68181-970, hereinafter referred to as "GARIMPEIROS", and collectively referred to as "CONTRACTING PARTIES", and the representative of each side hereinafter referred to jointly as Counterparts. OBJECT: Hereinafter named GARIMPO, as detailed in ANNEX A of this instrument, this object is made up of 2 (two) blocks of area with distinct titles, which, after an appraisal of the geological potential by and being of interest to SUPPLY, will result in a business transaction, following the terms and conditions as specified in item 2 below: ANNEX A - BLOCK I - referring to Garimpo Novo Porto in the name of Alvaro da Silva Souza - - Applications for Mine Permission according to the list below: DNPMs 852875/94-Area-08 to 852906/94-Area-39 DNPMs 852908/94-Area-41 to 852912/94-Area-45 DNPMs 852914/94-Area-47 to 852918/94-Area-51 DNPMs 852920/94-Area-53 to 852924/94-Area-57 DNPMs 852926/94-Area-59 to 852929/94-Area-63 DNPMs 852931/94-Area-65 to 852934/94-Area-68 DNPMs 852936/94-Area-71 to 852942/94-Area-81 DNPMs 852944/94-Area-83 to 852948/94-Area-87 DNPMs 852957/94-Area-89 to 852961/94-Area-93 DNPMs 852963/94-Area-95 to 852967/94-Area-99 DNPMs 852969/94-Area-101 to 852973/94-Area-105 DNPMs 852975/94-Area-l07 to 852979/94-Area-111 DNPMs 852981/94-Area-113 to 852985/94-Area-117 DNPMs 852987/94-Area-119 to 852991/94-Area-123 DNPMs 852993/94-Area-125 to 852997/94-Area-129 DNPMs 852999/94-Area-131 to 853000/94-Area-132, in the name of Alvaro da Silva Souza, according to map of detail, doc. ANNEX A-1. 1 - - An application for Survey Authorization DNPM No. 850567/2005-04 in the name of lvaro da Silva Souza, according to map of location, doc. ANNEX A-2. - - Plant of the location of the general possession of the area of Novo Porto mine which incorporates the above-mentioned DNPMs pertinent to its titleholder, doc. ANNEX A3. ANNEX A - BLOCK II - Referring to Faz. Agroextrativista Mineral Brilhante, in the name of Galdino Antonio da Silva Luz. - - Applications for Mine Permission according to the list below: DNPMs number 852826/94-Area 01 to 852829/94-Area 04 DNPMs number 852831/94-Area 06 to 852832/94-Area 07 DNPMs number 852834/94-Area 09 to 852837/94-Area 12 DNPMs number 852839/94-Area 14 to 852840/94-Area l5 DNPMs number 852842/94-Area 17 to 852845/94-Area 20 DNPMs number 852847/94-Area 22 to 852848/94-Area 23 DNPMs number 852850/94-Area 25 to 852865/94-Area 40, in the name of Galdino Antonio da Silva Luz, according to map of location and detail doc. ANNEX A4. - - An application for Survey Authorization DNPM No. 850566/2005-77 in the name of Galdino Antonio da Silva Luz, according to map of location, doc. ANNEX A5. A. WHEREAS the GARIMPEIROS are the titleholders of certain mineral rights located in the region of the Basin of Tocantins River and around some of its arms, Garimpo Novo Porto and Fazenda Agroextrativista Mineral Brilhante, in the Municipality of Itaituba, State of Para, which rights refer to PLGs according to DNPM processes mentioned in ANNEX A, with assured priority, which rights include the possession of the surface area (although not yet applied for, but included herein for the purposes of this agreement, doc. ANNEX A3), those certain mineral rights hereinafter collectively referred to as "GARIMPO", being the said mineral rights, for their better understanding, specified in ANNEX A of this instrument in two blocks with distinct titles. B. WHEREAS SUPPLY wishes to explore and assess the gold potential and have an option to acquire title to the mineral rights of the GARIMPO, and for such purpose has been granted access to information gathered on site by the GARIMPEIROS, who agree to this, with the knowledge that the work done is at SUPPLY's expense and risk. C. WHEREAS SUPPLY has the necessary technology to develop and carry out exploration work in gold mineral reserves as well as economic means to carry out such activities in the GARIMPO. D. WHEREAS the CONTRACTING PARTIES wish to enter into and celebrate an Agreement for the Assignment and Transfer of Mineral Rights, and for such purpose SUPPLY will appoint a person of trust to act on its behalf by means of a specific agreement which is hereto attached. In order to preserve the negotiation, the parties agree to execute this temporary instrument, hereinafter referred to as "MEMORANDUM OF UNDERSTANDING", and having as its object the establishment of the right and obligations of the CONTRACTING PARTIES among themselves and any third party. A definitive Agreement for the Assignment and Transfer of Mineral Rights shall be celebrated by the parties at a later stage, following the terms and conditions outlined in the clauses ahead. 2 E. WHEREAS SUPPLY, in order to maintain the Assignment and the Option to celebrate a definitive Assignment and Transfer Option of Mineral Rights Agreement, agrees to carry out a due diligence within 90 (ninety) days; and for such purpose, the CONTRACTING PARTIES have decided to enter into and celebrate this "MEMORANDUM OF UNDERSTANDING", according to the following terms and conditions: 1. EVALUATION AND STATEMENT OF INTEREST 1.1 - In view of that specified in item B of this agreement, SUPPLY undertakes hereby to pay the GARIMPEIROS the equivalent in reals of US$5,000.00 (five thousand US$) to have the right to duly and in detail appraise the GARIMPO, in consideration of the authorization now being granted to SUPPLY. 1.2 - The above-mentioned payment and subsequent ones will be paid through a bank deposit in favour of GALDINO ANTONIO DA SILVA LUZ, chequing account no. 7643-0 with Bank Branch no. 1646-2, in the city of Peixoto de Azevedo, MT, which the GARIMPEIROS will indicate to SUPPLY. The amount is in Brazilian currency, and for this purpose, the commercial rate of exchange for the purchase and sale of US currency prevailing in Rio de Janeiro will be used, on the business day prior to the payment at the exchange rate used by SUPPLY or as informed in the newspaper "Gazeta Mercantil" or, in its absence, in another major daily newspaper. 1.3 - The GARIMPEIROS, as from the date of the execution hereof and within the period of 90 (ninety) days, undertake not to assign, transfer, encumber or lien the mineral rights comprised in the GARIMPO, and, according to the terms and conditions set forth in this instrument, agree to make all information available to SUPPLY who shall inspect and examine all and any data it might have access to in regard to the GARIMPO. During this period, SUPPLY shall make site visits, examine the data and decide to exercise its option to acquire the GARIMPO. In case SUPPLY decides to exercise its option to acquire the GARIMPO, it shall notify the GARIMPEIROS of its decision at least five (5) days prior to the expiration of the abovementioned period. 2. ASSIGNMENT AND TRANSFER OPTION OF MINERAL RIGHTS 2.1 - In accordance with item 2.2 of this agreement, having SUPPLY notified the GARIMPEIROS of its interest to acquire the GARIMPO, the parties hereby shall celebrate an Agreement for the Assignment and Transfer of Mineral Rights and Other Covenants, within a maximum period of 90 days, which will establish and govern the terms and conditions of the transfers, as well as to register such agreement before the DNPM, provided it agrees to pay as price for the assignment of the mineral rights and the possession rights, the values established as follows:
Date Payment US$ I 30.11.2005 (as stipulated in items 1.2 and 1.3) 25,000 II 30.05.2006 (as stipulated in items 1.2 and 1.3) 75,000 III 30.05.2007 (as stipulated in items 1.2 and 1.3) 100,000 IV 30.05.2008 (as stipulated in items 1.2 and 1.3) 150,000 V 30.05.2009 (as stipulated in items 1.2 and 1.3) 1,850,000 Total US$2,200,000
3 2.2 - The GARIMPEIROS agree to, immediately after SUPPLY confirms the interest over the Mineral Rights comprised in the GARIMPO, assign and transfer the said rights, upon payment (I) which will take place with the registration of the transferred right and upon confirmation of its priority, which shall permit SUPPLY to execute in the GARIMPO for a period of 42 (forty-two) months as from the date of this agreement, assessment work and geological survey which it deems necessary to ascertain the existence of possible primary deposits which may be economically explored, and therefore, its interest in purchasing or not the respective mineral rights. It should be noted that during the geological assessment of the GARIMPO, the GARIMPEIROS may develop works therein, provided that work in the said mining site does not interfere with SUPPLY's research activities, in which case the miners will need to stop their work. As far as possible, SUPPLY shall inform the miners as to how they should carry out their work to avoid any stoppage. 2.3 - All the productive activities are concentrated in a segment of the Highway BR-163 which links the cities of Cuiaba and Santarem, comprising the area of interest of the CONTRACTING PARTIES. Therefore, the Parties shall take all the necessary actions, jointly or separately and in the most convenient way to defend the interests of the GARIMPO. Regarding the ownership, the GARIMPEIROS declare to be the legitimate and sole owners of the areas comprising the GARIMPO, and therefore, the mining results, right to rental or any indemnifications are included in the prices established in clause 2.1 above. For such purpose, the GARIMPEIROS agree to the best of their ability to provide to SUPPLY with technical, legal and operational support, as well as undertake to endeavour their best efforts to give SUPPLY any information it might have access to with respect to the GARIMPO, and to take all actions necessary for the expeditious registration of the documents needed in order for the Agreement to be implemented, with SUPPLY being responsible for the financial expenses incurred to obtain such results. 2.4 - SUPPLY may, after the registration of the Exploration Agreement, transfer to any third parties, the mineral rights granted to it under this Agreement, provided there is an inclusion of a clause in this regard. 2.5 - At any time before the Option exercise, SUPPLY will be entitled to terminate the Agreement and drop the GARIMPO PROJECT regardless of the motive, being free henceforth of any and all payment commitments yet to be due. If SUPPLY decides to exercise its option to terminate the agreement, it shall assign back to the GARIMPEIROS within 15 days the Mining Rights object of this agreement together with a detailed technical report which shall include all and any information gathered to date. 2.6 - The CONTRACTING PARTIES will be liable for a jointly follow-up before the DNPM in regard to the Mineral Rights comprised in the GARIMPO, especially regarding exploration permit requests, with all the expenses incurred of the responsibility of SUPPLY. 2.7 - Each of the CONTRACTING PARTIES herein will be liable for any and all environmental damages resulting from their activities carried out in the GARIMPO. In this regard, the GARIMPEIROS are responsible for the environmental damages caused up to the signing of this agreement. 4 2.8 - The payment of item "2.1 V on 30.05.2009 (as specified in item 1.2 and 1.3) US$ 1,850,000" will be made once only in case the final area of acquisition is for lvaro da Silva Souza's block or for Galdino Antonio da Silva Luz's block, and in case SUPPLY wishes to acquire both blocks then it shall pay the equivalent in reals of US$1,850,000.00 for each block. 3. CONFIDENTIALITY 3.1. The fact that the Agreement has been executed as well as its contents and any technical and financial or other information pursuant to the GARIMPO constitutes confidential information of the CONTRACTING PARTIES and shall not be disclosed, divulged or made known to any third party or published without previous written consent of the non-disclosing party. Exception to the confidentiality obligation will be the case in which any of the CONTRACTING PARTIES needs to disclose said information as a result of it is being linked to the stock market and disclosure is required by law. 4. COMMUNICATION 4.1. Any notice related to this agreement shall be given in writing and shall be deemed to be effectively given upon personal delivery, or by registered letter or upon receipt of transmission by fax or cable, provided there is an acknowledgement of receipt. Such notices shall be sent to each party representative herein established. 5. REPRESENTATIONS AND WARRANTIES 5.1. Each of the PARTIES herein represents and warrants to each other that: (a) they are corporations duly incorporated and validly existing and in good standing under the laws of their countries, and have the power, capacity and authority to enter into and perform the Agreement and all transactions contemplated herein; (b) there are no provisions in their By-laws, statutes or agreements of which they are a party or object which may prevent the celebration and execution of this Agreement; (c) The celebration of the Agreement will not result in a default under any agreement or instrument to which the parties are a party, as well as will not infringe any applicable laws, regulations, suits, decree or rule which they might be obliged to obey or any arrangement, waiver, or agreement of which is it a party; (d) There are no pending liabilities, warranties, pledge, or any other obligations which might significantly in any way interfere with the mineral rights object of the Agreement, and said rights are free and clear of any claims, liens or encumbrances; (e) In respect of the mineral rights herein referred to, there are no contractual obligations in respect to royalties, finder's fee and/or any other contribution to any landowners, occupiers or third parties; and to ensure good execution of the appraisal, the miners owners of the GARIMPO, authorize SUPPLY to use the "AERODROMO" called Novo Porto, alter its configuration and access routes, facilities and other improvements at its own expense and risk. 6. AMENDMENTS AND PREVIOUS EVENTUAL AGREEMENTS AND GENERAL PROVISIONS 6.1. This agreement represents and comprises all the understanding and commitments agreed amongst the PARTIES, and replaces or overlaps any and all previous agreements and negotiations, verbal or written, with regard to the issues herein addressed. 5 6.2. By this agreement the signatories, their successors and any authorized assignees are obliged to comply with the terms and conditions set forth herein. 6.3. This agreement shall not be amended, in its parts or as a whole, except when previously agreed amongst the parties, and provided that such changes are done upon a written consent, executed and signed by a Counterpart, thus established, with a duly authorized representative of each party. 6.4. No tolerance by any of the CONTRACTING PARTIES with regard to any future defaults in the compliance of this instrument shall constitute as amendment or novation of the conditions agreed upon herein. 6.5. This agreement and its annexes, which after being signed by the CONTRACTING PARTIES and the witnesses will make an integral part of this instrument, represent the whole agreement entered into by the Parties, and shall govern and regulate their activities, according to the terms and conditions set forth hereto. No other business carried amongst the parties, except for the one established herein, shall be accepted as valid unless it proves to be an amendment to this agreement. 6.6. The terms set forth in this agreement are valid and binding and shall regulate and govern the business amongst the CONTRACTING PARTIES, until a definitive Agreement is executed which is expected to occur by 25NOV05. 6.7. The CONTRACTING PARTIES declare and warrant that they will grant an extrajudicial, executive power to this agreement, with full force, according to the terms established (in item II, article 621 of the Code of Civil Procedure, Law no. 8953/94). "Complement the provision specified between brackets". 7. GOVERNING LAW AND DISPUTE RESOLUTION 7.1. This agreement shall be governed by the laws of Brazil. 7.2. The Parties hereby agree that any and all dispute arising from this agreement shall be resolved at the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, with the waiver of any other, prevailing over any others. However, the parties are entitled to solve any dispute by means of arbitration at the court of the city of Rio de Janeiro, provided that they have reached this decision by mutual agreement. IT WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of the witnesses below, who also subscribe this instrument, for all legal effect. Itaituba, Pa, September 05, 2005 6 /s/"Galdino Antonio da Silva Luz" /s/"Alvaro da Silva Souza" - --------------------------------- -------------------------- (Signature) (Signature) Galdino Antonio da Silva Luz AAlvaro da Silva Souza 177562-SSP/RR GARIMPEIROS RG 75528-SSP/RO /s/"Hans W Biener" ------------------ (Signature) Hans W. Biener Passport no. 3208063701 SupplyConsult Witnesses 1) (Signature) Signature not legible 2) (Signature) Signature not legible Notary Public stamp signed and dated 05SEP05 in Itaituba, authenticating the two signatures above with a hand icon stamp pointed to them. Notary Public stamp signed and dated 20SEP05 in Rio de Janeiro, authenticating the signature of HANS WERNER BIENER. 7 POWER OF ATTORNEY By this instrument of Power of Attorney celebrated between them, on the one side as PRINCIPAL, Mr. Alvaro da Silva Souza, Brazilian, single, miner prospector, bearer of ID number RG 75528/SSP-RO, and Taxpayer's Registry no. CIC 414.532.l272, with address at Av. Dr. Hugo de Mendon a no. 420, Caixa Postal 034 - - Bairro Centro, in the city of Itaituba, State of Para, Postal Code 68181-970, and on the other side as PROXY, Mr. Galdino Antonio da Silva Luz, Brazilian, married, aeronaut and miner prospector, thus legally established, born in Porto Alegre, RS, bearing the Identity Card No. RG 177562 issued by SSP-RR, and duly enrolled in the Individual Taxpayer's Register under no. CPF 161.023.550-91, and also holding the power of attorney for the above-mentioned prospector, with address at Av. Dr. Hugo de Mendon a, n degree 420, Caixa Postal 034 - Bairro Centro, in the city of Itaituba, state of Para, Postal Code CEP 68181-970, to whom confers powers to represent the Principal before the Ministry of Mines and Energy, and all its Secretaries, Divisions and Departments, in particular before the National Department of Mineral Production, DNPM and all its district agencies, with the right to, with regard to his titles to the registered DNPM processes, assign and transfer such rights, apply for changes into licenses, extensions and suspensions of same, apply for portioning of the processes or inspections and authorizations, including hiring of professionals to prepare and present mineral survey plans and mineral survey reports or of any other nature, technical and economic feasibility studies of the mines or any other studies, withdraw them, alter or cancel them, pay taxes and fees, apply for and obtain user guides, receive returns, issue receipt, obtain verification of the processes, make appeal and inquiries, promote endorsements and represent the Principal before federal, state and municipal agencies, in particular the Brazilian Institute of Environmental and Renewable Natural Resources (Ibama) and other government agencies, whether federal, state or municipal, relating to environmental policies, and may also apply for environmental licences for mining activities, represent the Principal before third parties, with "adjudicia" powers, hire professionals in pertinent areas, present agreements and properly register them, paying taxes and fees, and whatever else necessary to comply with the terms and conditions of this mandate, and may also sub-establish in part or as a whole, and also desist from mining titles when necessary. Special Clause: The Proxy may, in the form presented in the MEMORANDUM OF UNDERSTANDING, represent the Principal with this Power of Attorney, in the agreements of which the parties are a party as follows: SUPPLY: Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5, 80333, Muenchen, hereinafter referred to as "SUPPLY", in this act represented by its Director General, Hans W. Biener, bearing the passport no. 3208063701 issued by the Federal Republic of Germany. GARIMPEIROS: Alvaro da Silva Souza, Brazilian, single, miner prospector, bearer of ID number RG 75528/SSP-RO, and Taxpayer's Registry no. CIC 414.532.1272, and Galdino Antonio da Silva Luz, Brazilian, married, aeronaut and miner prospector, thus legally established, born in Porto Alegre, RS, bearing the Identity Card No. RG 177562 issued by SSP-RR, and duly enrolled in the Individual Taxpayer's Register under no. CPF 161.023.550-91, and 8 also holding the power of attorney for the above-mentioned prospector and Counterpart, both with address at Av. Dr.Hugo de Mendon a, no. 420, Caixa Postal 034 - Bairro Centro, in the city of Itaituba, Pa, CEP 68181-970, hereinafter referred to as Garimpeiros, and collectively referred to as CONTRACTING PARTIES and a representative of each party hereinafter jointly referred to as Counterparts. OBJECT: Hereinafter named GARIMPO, as detailed in ANNEX A of the instrument referred to as MEMORANDUM OF UNDERSTANDING, in two blocks with distinct titles. And for all legal effect, I sign hereunder, Itaituba, Pa, August 12, 2005 /s/"Alvaro da Silva Souza" - -------------------------- (Signature) ALVARO DA SILVA SOUZA Notary Public stamp signed and dated in Itaituba, authenticating the signature above. 9 MINISTRY OF MINES AND ENERGY DNPM - NATIONAL DEPARTMENT OF MINERAL PRODUCTION Process 48405-850567/2005-04 ALVARO DA SILVA SOUZA - Survey Authorization APPLICATION FOR MINERAL SURVEY - FORM 01 - -------------------------------------------------------------------------------- 02 - DOCUMENTS WHICH ARE PART OF THIS APPLICATION: FORMS 01 to 03 and - -------------------------------------------------------------------------------- - - DESCRIPTION BRIEF OF THE AREA - PROOF OF PAYMENT OF FEES - - MAP OF THE LOCATION OF THE AREA NOTE ON TECHNICAL RESPONSIBILITY (A.R.T.) - - SURVEY WORK PLAN - OF THE SURVEY PLAN - - BUDGET - OF THE DESCRIPTION BRIEF - - CHRONOGRAM - OF THE MAP OF THE LOCATION - ----------------------------------- ------------------------------------------- - ----------------------------------- ------------------------------------------- 03 - FOR THE EXCLUSIVE USE OF DNPM 04 - SURFACE AREA - ----------------------------------- ------------------------------------------- DATE HECTARES ARES - ----------- ----------- --------- -------------- ------------- ------------ 18AUGUST2005 9966 62 - ----------- ----------- --------- -------------- ------------- ------------ - -------------------------------------------------------------------------------- 05 - DATA OF APPLICANT: INDIVIDUAL OR COMPANY - -------------------------------------------------------------------------------- NAME - -------------------------------------------------------------------------------- ALVARO DA SILVA SOUZA - -------------------------------------------------------------------------------- CPF NUMBER - ----------------------------- ------------------------- ---------------------- 414.532.122-72 - ----------------------------- ------------------------- ---------------------- ADDRESS - -------------------------------------------------------------------------------- AVENIDA Dr. HUGO DE MENDONCA NO. 420 - -------------------------------------------------------------------------------- DISTRICT CITY STATE - ----------------------------- ------------------------- ---------------------- CENTRO ITAITUBA PA - ----------------------------- ------------------------- ---------------------- POSTAL CODE: CEP 68181-970 FAX: 93-35180811 TELEPHONE: 93-35183022 P.O.Box: 034 - ----------------------------- ------------------------- ---------------------- - -------------------------------------------------------------------------------- 06 - ADDITIONAL DATA (FOR INDIVIDUALS ONLY) - -------------------------------------------------------------------------------- ID CARD NO. 75.528 SSP/RO PROFESSION: PROSPECTOR CIVIL STATUS: SINGLE - ----------------------------- ------------------------- ---------------------- NATIONALITY: BRAZILIAN - -------------------------------------------------------- ---------------------- - -------------------------------------------------------------------------------- 07 - PROFESSIONAL RESPONSIBLE FOR THE SURVEY PLAN - -------------------------------------------------------------------------------- NAME: ANTONIO VALERIO DA SILVA - -------------------------------------------------------------------------------- PROFESSION: GEOLOGIST - -------------------------------------------------------------- ---------------- CPF NUMBER PROF. BODY REGION (CREA) ID No. SIGNATURE - ----------------- ------------------------------ ------------ 000.079.942-49 1ST 1105-D (Signature) - ----------------- ------------------------------ ------------ --------------- ADDRESS - -------------------------------------------------------------------------------- AVENIDA SENADOR LEMOS NO. 568 - -------------------------------------------------------------------------------- DISTRICT CITY STATE - --------------------- -------------------- ------------------ --------------- UMARIZAL BELEM PA - --------------------- -------------------- ------------------ --------------- POSTAL CODE FAX TELEF0NE - --------------------- -------------------- ------------------ --------------- CEP 66050-000 91-32222745 91-99884862 - --------------------- -------------------- ------------------ --------------- - -------------------------------------------------------------------------------- 08 - THE UNDERSIGNED REQUESTS AUTHORIZATION FROM THE DIRECTOR GENERAL OF THE DNPM TO CONDUCT A MINERAL SURVEY ACCORDING TO THE DOCUMENTATION ATTACHED TO THIS APPLICATION. - -------------------------------------------------------------------------------- REPRESENTATIVE WHO SIGNS THE APPLICATION - -------------------------------------------------------------------------------- NAME: GALDINO ANTONIO DA SILVA LUZ REPRESENTATION : - ------------------------------------------------------ ADDRESS: Av. Dr Hugo de Mendon a no. 420 Itaituba PA POWER OF ATTORNEY - -------------------------------- -------------------- ------------------------ PLEASE INFORM ABOVE IF A LEGAL DATE SIGNATURE REPRESENTATIVE IS SIGNING THIS 18AUG2005 /s/"Galdino Antonio ------------------- APPLICATION da Silva Luz" ------------- (Signature) - -------------------------------- -------------------- ------------------------ 10 DESCRIPTION BRIEF OCCUPANT: ALVARO DA SILVA SOUZA PROPERTY: Novo Porto MINERAL BEARING GROUNDS: Sumauma AREA (a): 37,547.2611 PERIMETER (m): 93,415.38 MUNICIPALITY: Itaituba STATE: Para LIMITS AND OUTLINES NORTH: Neguinho EAST: Igarape Salustiano SOUTH: Legal owner WEST: Garimpo Magalhaes, Garimpo Sao Miguel DESCRIPTION OF THE PERIMETER Starting from Milestone M-66, defined by the geographic coordinates of Latitude 5.42'48.0" South and Longitude 56.04'35,1" West, Ellipsoid SAD 69 and by the plane coordinate UTM 9,368,400.000m North, 602,270.000m East, referring to the central meridian 57 WGr, following the left margin of IGARAPE SALUSTIANO, going upstream, with a distance of 29,546.93 meters, arriving at milestone M-54; from here, following with plane azimuth of 254.28'00" and distance of 16,286.25 meters arriving at milestone M-51; from this, following with plane azimuth of 241.41'54" and distance of 8,046.46 meters, arriving at milestone M-45; from here, following with plane azimuth of 314.58'56" and distance of 1,740.46 meters, arriving at milestone M-42; from here, following with plane azimuth of 2.23'34" and distance of 7,188.79 meters, arriving at milestone M-41; from here, following with plane azimuth of 330.33'19" and distance of 15,200.91 meters, arriving at milestone M-65; from here, following with plane azimuth of 70.45'41" and distance of 15,405.58 metros, arriving at milestone M-66, starting point of the description of this perimeter. DATE SIGNATURE FOUND IN ORDER SEEN Nov/02 (Signed) signature not legible 11 MINISTRY OF MINES AND ENERGY DNPM - NATIONAL DEPARTMENT OF MINERAL PRODUCTION Process 48405-850566/2005-77 GALDINO ANTONIO DA SILVA LUZ - Survey Authorization APPLICATION FOR MINERAL SURVEY - FORM 01 - -------------------------------------------------------------------------------- 02 - DOCUMENTS WHICH ARE PART OF THIS APPLICATION: FORMS 01 to 03 and - -------------------------------------------------------------------------------- - - DESCRIPTION BRIEF OF THE AREA - PROOF OF PAYMENT OF FEES - - MAP OF THE LOCATION OF THE AREA NOTE ON TECHNICAL RESPONSIBILITY (A.R.T.) - - SURVEY WORK PLAN - OF THE SURVEY PLAN - - BUDGET - OF THE DESCRIPTION BRIEF - - CHRONOGRAM - OF THE MAP OF THE LOCATION - ----------------------------------- ------------------------------------------- - ----------------------------------- ------------------------------------------- 03 - FOR THE EXCLUSIVE USE OF DNPM 04 - SURFACE AREA - ----------------------------------- ------------------------------------------- DATE HECTARES ARES - ----------- ----------- --------- -------------- ------------- ------------ 18AUGUST2005 9983 00 - ----------- ----------- --------- -------------- ------------- ------------ - -------------------------------------------------------------------------------- 05 - DATA OF APPLICANT: INDIVIDUAL OR COMPANY - -------------------------------------------------------------------------------- NAME - -------------------------------------------------------------------------------- GALDINO ANTONIO DA SILVA LUZ - -------------------------------------------------------------------------------- CPF NUMBER - ----------------------------- ------------------------- ---------------------- 161.023.550-91 - ----------------------------- ------------------------- ---------------------- ADDRESS - -------------------------------------------------------------------------------- AVENIDA Dr. HUGO DE MENDONCA NO. 420 - -------------------------------------------------------------------------------- DISTRICT CITY STATE - ----------------------------- ------------------------- ---------------------- CENTRO ITAITUBA PA - ----------------------------- ------------------------- ---------------------- POSTAL CODE: CEP 68181-970 FAX: 93-35180811 TELEPHONE: 93-35183022 P.O.Box: 034 - ----------------------------- ------------------------- ---------------------- - -------------------------------------------------------------------------------- 06 - ADDITIONAL DATA (FOR INDIVIDUALS ONLY) - -------------------------------------------------------------------------------- ID CARD NO.177.562 SSP/RR PROFESSION: AERONAUT CIVIL STATUS: MARRIED - ----------------------------- ------------------------- ---------------------- NATIONALITY: BRAZILIAN - -------------------------------------------------------- ---------------------- - -------------------------------------------------------------------------------- 07 - PROFESSIONAL RESPONSIBLE FOR THE SURVEY PLAN - -------------------------------------------------------------------------------- NAME: ANTONIO VALERIO DA SILVA - -------------------------------------------------------------------------------- PROFESSION: GEOLOGIST - -------------------------------------------------------------- ---------------- CPF NUMBER PROF. BODY REGION (CREA) ID No. SIGNATURE - ----------------- ------------------------------ ------------ 000.079.942-49 1ST 1105-D (Signature) - ----------------- ------------------------------ ------------ --------------- ADDRESS - -------------------------------------------------------------------------------- AVENIDA SENADOR LEMOS NO. 568 - -------------------------------------------------------------------------------- DISTRICT CITY STATE - --------------------- -------------------- ------------------ --------------- UMARIZAL BELEM PA - --------------------- -------------------- ------------------ --------------- POSTAL CODE FAX TELEF0NE - --------------------- -------------------- ------------------ --------------- CEP 66050-000 91-32222745 91-99884862 - --------------------- -------------------- ------------------ --------------- - -------------------------------------------------------------------------------- 08 - THE UNDERSIGNED REQUESTS AUTHORIZATION FROM THE DIRECTOR GENERAL OF THE DNPM TO CONDUCT A MINERAL SURVEY ACCORDING TO THE DOCUMENTATION ATTACHED TO THIS APPLICATION. REPRESENTATIVE WHO SIGNS THE APPLICATION - -------------------------------------------------------------------------------- NAME: GALDINO ANTONIO DA SILVA LUZ REPRESENTATION : - ------------------------------------------------------ ADDRESS: Av. Dr Hugo de Mendon a no. 420 Itaituba PA - -------------------------------- -------------------- ------------------------ PLEASE INFORM ABOVE IF A LEGAL DATE SIGNATURE REPRESENTATIVE IS SIGNING THIS 18AUG2005 /s/"Galdino Antonio ------------------- APPLICATION da Silva Luz" ------------- (Signature) - -------------------------------- -------------------- ------------------------ 12 EX-10.2.3 6 ex10_23.txt EXHIBIT 10.2.3 Exhibit 10.2.3 December 7, 2005 To: Aurora Gold Corporation 3540 West 41st Avenue, Suite 204 Vancouver, BC V6N 3E6 Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Memorandum of Understanding regarding Novo Porto Project Translator's Declaration I, Tomas Almeida, Certified Portuguese to English Translator, Member in good standing of the Society of Translators and Interpreters of British Columbia (STIBC), which is a member association of the Canadian Translators and Interpreters Council (CTIC), hereby attest that, to the best of my knowledge and belief, the above-mentioned document is a true, correct and complete translation of the Portuguese document presented to me. Signed"Tomas Almeida" - ---------------------- Tomas Almeida 19780 Honeydew Drive Pitt Meadows, BC V3Y 2S6 Tel. 604-465-6128 Fax 604-465-6129 Cell.604-202-0031 Email: talmeida@telus.net ------------------ EX-10.2.4 7 ex10_24.txt EXHIBIT 10.2.4 Exhibit 10.2.4 - English Translated Version of Portuguese Document MEMORANDUM OF UNDERSTANDING By this present agreement entered into by, on the one side, SUPPLY CONSULT, a company with its Head Office in Germany at Karolinen Platz 5, 80333, Muenchen, hereinafter referred to as "SUPPLY", in this act represented by its Director General, Hans W. Biener, bearing the passport no. 3208063701 issued by the Federal Republic of Germany, and on the other side, Antonio Garcia Bernardes, Brazilian, married, businessman, bearing the Identity Card No. RG4332202 issued by SSP-PA, and duly enrolled in the Individual Taxpayer's Register under no. CIC 004.881.192-00, and Galdino Antonio da Silva Luz, Brazilian, married, aeronaut and miner, born in Porto Alegre, RS, bearing the Identity Card No. RG 177562 issued by SSP-RR, and duly enrolled in the Individual Taxpayer's Register under no. CIC 161.023.550-91, and also counterpart of the signing miners, both with address at Av. Dr. Hugo de Mendon a no. 420, Caixa Postal 034 - Bairro Centro, in the city of Itaituba, state of Para, Postal Code 68181-970, hereinafter referred to as 'GARIMPEIROS", and all parties collectively referred to as "CONTRACTING PARTIES", and the representative of each side hereinafter referred to jointly as Counterparts. OBJECT: Agromineral Santa Clara, hereinafter named GARIMPO, of the property of the GARIMPEIROS, thus referred to in this instrument, in partnership holding equal shares, as specified in ANNEX A of this instrument, this object is made up of 2 (two) blocks of areas with distinct titles and which, after an appraisal of the geological potential by and being of interest to SUPPLY, will result in a business transaction, following the terms and conditions as specified in item 2.3 below. ANNEX A
- ---------------------------------- -------------------------------------- Antonio Garcia Bernardes (block 1) Galdino Antonio da Silva Luz (block 2) - ---------------------------------- -------------------------------------- DNPM number 852718/94-Area-l DNPM number 852741/94-Area-02 DNPM number 852719/94-Area-3 DNPM number 852742/94-Area-04 DNPM number 852720/94-Area-5 DNPM number 852743/94-Area-06 DNPM number 852721/94-Area-7 DNPM number 852744/94-Area-08 DNPM number 852722/94-Area-9 DNPM number 852745/94-Area-l0 DNPM number 852723/94-Area-12 DNPM number 852746/94-Area-l1 DNPM number 852724/94-Area-l4 DNPM number 852747/94-Area-l3 DNPM number 852725/94-Area-l6 DNPM number 852748/94-Area-l5 DNPM number 852726/94-Area-l8 DNPM number 852749/94-Area-l7 DNPM number 852727/94-Area-20 DNPM number 852750/94-Area-l9 DNPM number 852728/94-Area-22 DNPM number 852751/94-Area-21 DNPM number 852729/94-Area-24 DNPM number 852752/94-Area-23 DNPM number 852730/94-Area-26 DNPM number 852753/94-Area-25 DNPM number 852731/94-Area-28 DNPM number 852754/94-Area-27 DNPM number 852732/94-Area-30 DNPM number 852755/94-Area-29 DNPM number 852733/94-Area-32 DNPM number 852756/94-Area-31 DNPM number 852734/94-Area-34 DNPM number 852757/94-Area-33 DNPM number 852735/94-Area-36 DNPM number 852758/94-Area-35 DNPM number 852736/94-Area-38 DNPM number 852759/94-Area-37 - ---------------------------------- -------------------------------------- - ---------------------------------- -------------------------------------- DNPM number 852737/94-Area-40 DNPM number 852760/94-Area-39 DNPM number 852738/94-Area-42 DNPM number 852761/94-Area-41 DNPM number 852739/94-Area-43 DNPM number 852740/94-Area-44 - ---------------------------------- --------------------------------------
Complement to ANNEX A: A. WHEREAS the GARIMPEIROS are the titleholders of certain mineral rights located in the region of the Basin of Crepori River and around some of its arms, Garimpo Santa Clara located in the mineral bearing grounds of Marupa II and Surubim, in the Municipality of Itaituba, State of Para, which rights refer to PLG DNPM processes mentioned in ANNEX A, with assured priority, which rights include the possession of the surface area, according to the location map and with the description brief, doc. ANNEX A, 1, 2 and 3 which are included for the purpose of this instrument, herereinafter referred to as GARIMPO, being the said mineral rights, in two blocks with distinct titles, for the better understanding, specified in ANNEX A of this instrument. B. WHEREAS SUPPLY wishes to explore and assess the gold potential and have an option to acquire title to the mineral rights of GARIMPO, and for such purpose has been granted access to information gathered on site by the GARIMPEIROS, who agree to this, with the knowledge that the work done is at SUPPLY's expense and risk. C. WHEREAS SUPPLY has the necessary technology to carry out the survey and economic exploration of the gold mineral reserves as well as the resources to develop such activities in the GARIMPO. D. WHEREAS the CONTRACTING PARTIES wish to enter into and celebrate an Agreement for the Assignment and Transfer of Mineral Rights and for such purpose SUPPLY will appoint a person of trust to act on its behalf by means of a specific agreement which is hereto attached. In order to preserve the negotiation, the parties agree to execute this temporary instrument, hereinafter referred to as "MEMORANDUM OF UNDERSTANDING", and having as its object the establishment of the right and obligations of the CONTRACTING PARTIES among themselves and any third party. A definitive Agreement for the Assignment and Transfer of Mineral Rights shall be celebrated by the parties at a later stage, following the terms and conditions outlined in the clauses ahead. E. WHEREAS SUPPLY, in order to maintain the Assignment and the Option to eventually celebrate a definitive Assignment and Transfer Option of Mineral Rights Agreement, agrees to carry out a due diligence within 90 (ninety) days; and for such purpose, the CONTRACTING PARTIES have decided to enter into and celebrate this "MEMORANDUM OF UNDERSTANDING", according to the following terms and conditions: 1. EVALUATION AND STATEMENT OF INTEREST 1.1 In view of that specified in item B of this agreement, SUPPLY has the right to duly and in detail appraise the GARIMPO, in consideration of the authorization now being granted to SUPPLY. 2 1.2 SUPPLY shall be authorized, subsequent to what is being granted, upon payment through a bank deposit in favour of ANTONIO GARCIA BERNARDES, chequing account no. 275-5 with Bank Branch 759-5, in the city of ITAITUBA, PA, which the GARIMPEIROS will indicate to SUPPLY. The amount is in Brazilian currency, and for this purpose, the commercial rate of exchange for the purchase and sale of US currency prevailing in Rio de Janeiro will be used, on the business day prior to the payment at the exchange rate used by SUPPLY or as informed in the newspaper "Gazeta Mercantil" or, in its absence, in another major daily newspaper. 1.3 The GARIMPEIROS, as from the date of the execution hereof and for a period of 90 (ninety) days, undertake not to assign, transfer, encumber or lien the mineral rights comprised in the GARIMPO, as, according to the terms and conditions set forth in this instrument, they agree to make available to SUPPLY all information available to inspect and examine all and any data it might have access to in regard to the GARIMPO. During this period, SUPPLY shall make site visits, examine the data and decide to exercise its option to acquire the GARIMPO. In case SUPPLY decides to exercise its option to acquire GARIMPO, it shall notify the GARIMPEIROS of its decision at least five (5) days prior to the expiration of the abovementioned period. 2. ASSIGNMENT AND TRANSFER OPTION OF MINERAL RIGHTS 2.1 In accordance with item 2.2 of this agreement, having SUPPLY notified the GARIMPEIROS of its interest to acquire the GARIMPO, the parties hereby shall celebrate an Agreement for the Assignment and Transfer of Mineral Rights and Other Covenants, within a maximum period of 90 days, which will establish and govern the terms and conditions of the transfers, as well as to register such agreement before the DNPM, provided it agrees to pay as price for the assignment of the mineral rights and the possession rights, the values established as follows:
Payment Date US$ I 30.11.2005 (as stipulated in items 1.2 and 1.3) 25,000 II 30.05.2006 (as stipulated in items 1.2 and 1.3) 75,000 III 30.05.2007 (as stipulated in items 1.2 and 1.3) 100,000 IV 30.05.2008 (as stipulated in items 1.2 and 1.3) 150,000 V 30.05.2009 (as stipulated in items 1.2 and 1.3) 1,850.000
2.2 The GARIMPEIROS agree to, immediately after SUPPLY confirms the interest over the Mineral Rights comprised in the GARIMPO, assign and transfer the said rights, upon payment (I) which will take place with the registration of the transferred right and upon confirmation of its priority, which shall permit SUPPLY to execute in the GARIMPO for a period of 42 (forty-two) months as from the date of this agreement, assessment work and geological survey which it deems necessary to ascertain the existence of possible primary deposits which may be economically explored, and therefore, its interest in purchasing or not the respective mineral rights. It should be noted that during the geological assessment of the GARIMPO, the GARIMPEIROS may develop works therein provided that work in the said mining site does not interfere with SUPPLY's research activities, in which case the miners will need to stop their 3 work. Whenever necessary, or as far as possible, SUPPLY will guide the GARIMPEIROS as to how their work may be carried out to avoid stoppage. 2.3 All the productive activities are concentrated in a segment of the Highway 63 which links the cities of Cuiaba and Santarem, comprising the area of interest of the CONTRACTING PARTIES. Therefore, the Parties shall take all the necessary actions, jointly or separately and in the most convenient way to defend the interests of the GARIMPO. Regarding the ownership, the GARIMPEIROS declares to be the legitimate and sole owners of the areas comprising the GARIMPO, and therefore, the mining results, right to rental or any indemnifications are included in the prices established in clause 2.1 above. For such purpose, the GARIMPEIROS agree to the best of their ability to provide to SUPPLY with technical, legal and operational support, as well as undertake to endeavour their best efforts to give SUPPLY any information it might have access to with respect to the GARIMPO, and to take all actions necessary for the expeditious registration of the documents needed in order for the Agreement to be implemented, with SUPPLY being responsible for the financial expenses incurred to obtain such results. 2.4 After the registration of the Exploration Agreement, SUPPLY may transfer to any third parties, the mineral rights granted to it under this Agreement, provided there is an inclusion of a clause in this regard. 2.5 At any time before the Option exercise, SUPPLY will be entitled to terminate the Agreement and drop the GARIMPO PROJECT regardless of the motive, being henceforth free of any and all payment commitments yet to be due. If SUPPLY decides to exercise its option to terminate the agreement, it shall assign back to the GARIMPEIROS within 15 days the Mining Rights object of this agreement together with a detailed technical report which shall include all and any information gathered to date. 2.6 The CONTRACTING PARTIES will be liable for a jointly follow-up before the DNPM in regard to the Mineral Rights comprised in the GARIMPO, especially regarding exploration permit requests, with all the expenses incurred of the responsibility of SUPPLY. 2.7 Each of the CONTRACTING PARTIES herein will be liable for any and all environmental damages resulting from their activities carried out in the GARIMPO. In this regard, the GARIMPEIROS are responsible for the environmental damages caused up to the signing of this agreement. 3. CONFIDENTIALITY 3.1 The terms and conditions of this Agreement as well as all and any technical and financial information pursuant to the GARIMPO constitute confidential information of the CONTRACTING PARTIES and shall not be disclosed, divulged or made known to any third party or published without previous written consent of the non-disclosing party. Exception to the confidentiality obligation will be the case in which any of the CONTRACTING PARTIES needs to disclose said information as a result of it being linked to the stock market and disclosure is required by law. 4 4. COMMUNICATION 4.1 Any notice among the parties related to this agreement shall be given in writing and shall be deemed to be effectively given upon personal delivery, or by registered letter or upon receipt of transmission by fax or cable, provided there is an acknowledgement of receipt. Such notices shall be sent to each party representative herein established. 5. REPRESENTATIONS AND WARRANTIES 5.1 Each of the PARTIES herein represents and warrants to each other that: (a) they are corporations duly incorporated and validly existing and in good standing under the laws of their countries, and have the power, capacity and authority to enter into and perform this Agreement and all transactions contemplated herein; (b) there are no provisions in their By-laws, statutes or agreements of which they are a party or object which may prevent the celebration and execution of this Agreement; (c) The celebration of the Agreement will not result in a default under any agreement or instrument to which the parties are a party, as well as will not infringe any applicable laws, regulations, suits, decree or rule which they might be obliged to obey or any arrangement, waiver, or agreement of which it is a party; (d) There are no pending liabilities, warranties, pledge, or any other obligations which might significantly in any way interfere with the mineral rights object of the Agreement, and said rights are free and clear of any claims, liens or encumbrances; (e) In respect of the mineral rights herein referred to, there are no contractual obligations in respect to royalties, finder's fee and/or any other contribution to any landowners, occupiers or third parties; and to ensure good execution of the appraisal, the miners owners of the GARIMPO, authorize SUPPLY to use the "AERODROMO" called AGROMINERAL SANTA CLARA, alter its configuration and access routes, facilities and other improvements at its own expense and risk. 6. AMENDMENTS AND PREVIOUS EVENTUAL AGREEMENTS AND GENERAL CONDITIONS 6.1 This agreement represents and comprises all the understanding and commitments agreed amongst the PARTIES, and replaces or overlaps any and all previous agreements and negotiations, verbal or written, with regard to the issues herein addressed. 6.2 By this agreement the signatories, their successors and any authorized assignees are obliged to comply with the terms and conditions set forth herein. 6.3 This agreement shall not be amended, in its parts or as a whole, except when previously agreed amongst the parties, and provided that such changes are done upon a written consent, executed and signed by a Counterpart, thus established, with a representative of each party. 6.4 No tolerance by any of the CONTRACTING PARTIES with regard to any future defaults in the compliance of this instrument shall constitute an amendment or novation of the conditions agreed upon herein. 5 6.5 This agreement and its annexes, which after being signed by the CONTRACTING PARTIES and the witnesses will make an integral part of this instrument, represent the whole agreement entered into by the Parties, and shall govern and regulate their activities, according to the terms and conditions set forth hereto. No other business carried amongst the parties, except for the one established herein, shall be accepted as valid unless it proves to be an amendment to this agreement. 6.6 The terms set forth in this agreement are valid and binding and shall regulate and govern the business amongst the CONTRACTING PARTIES, until a definitive Agreement is executed which is expected to occur by 25NOV05. 6.7 The CONTRACTING PARTIES declare and warrant that they will grant an extrajudicial, executive power to this agreement, with full force, according to the terms established (in item II, article 621 of the Code of Civil Procedure, Law no. 8953/94). "Complement with the provisions given between the brackets". 7. GOVERNING LAW AND DISPUTE RESOLUTION 7.1 This agreement shall be governed by the laws of Brazil. 7.2 The Parties hereby agree that any and all dispute arising from this agreement shall be resolved at the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, with the waiver of any other, prevailing over any others. However, the parties are entitled to solve any dispute by means of arbitration at the court of the city of Rio de Janeiro, provided that they have reached this decision by mutual agreement. IT WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of the witnesses below, who also subscribe this instrument, for all legal effect. Itaituba, Pa, September 05, 2005 /s/ "Galdino Antonio da Silva Luz" /s/ "Antonio Garcia Bernardes" - ---------------------------------- ------------------------------ (Signature) (Signature) Galdino Antonio da Silva Luz Antonio Garcia Bernardes RG 177562-SSP/RR RG 4332202-SSP/PA GARIMPEIROS /s/ "Hans W Biener" ------------------- (Signature) Hans W. Biener Passport no. 3208063701 SUPPLY Witnesses 6 1) (Signature) signature not legible --------------------- 2) (Signature) signature not legible --------------------- Notary Public stamp signed and dated 05SEP05 in Itaituba, authenticating the two signatures above with a hand icon stamp pointed to them. Stamp and signature of Notary Public dated 20SEP05 in Rio de Janeiro, authenticating the signature of HANS W. BIENER. 7 DESCRIPTION BRIEF OCCUPANT: PROPERTY: MUNICIPALITY: Itaituba AREA: 2,182.8809 Ha STATE: Para PERIMETER: 21,724.66m LOT: MINERAL BEARING GROUNDS: Marupa II/ Surubim LIMITS AND OUTLINES NORTH: Garimpo do Careiro / Track of Barroso EAST: Track of Barroso / Mineral and Vegetal Extraction Station of Dois Irmaos SOUTH: Garimpo Santa Maria WEST: Liberdade Track DESCRIPTION OF PERIMETER Starting from Milestone M-1, defined by the geographic coordinates of Latitude 7 degrees 03' 46.9" South and Longitude 56 degrees 45' 05.3" West, Ellipsoid SAD 69 and by the plane coordinate UTM 9,219,275,000m North, 527,447,000m East, referred to central meridian 57 WGr, followed with plane azimuth of 90 degrees 00' 00", and distance of 2,553.00 metros, arriving at milestone M-2; from here, following with plane azimuth of 180 degrees 00' 00", and distance of 1,775.00 metros, arriving at milestone M-3; from here, following with plane azimuth of 119 degrees 57' 24", and distance of 1,073.00 meters, arriving at milestone M-4; from here, following with plane azimuth of 90 degrees 00' 00", and distance of 2,199.00 metres, arriving at milestone M-4; from here, following with plane azimuth of 180 degrees 00' 00", and distance of 2,414.00 metres, arriving at milestone M-6; from here, following with plane azimuth of 270 degrees 00' 00", and distance of 3,072.00 metros, arriving at milestone M-7; from here, following the natural limit with the Crepori River with a distance of 967.26 metres, arriving at milestone M-8; from here, following with plane azimuth of 270 degrees 00' 00", and distance of 2,115.00 metres, arriving at milestone M-9; from here, following with plane azimuth of 0 degrees 00' 00", and distance of 5,556.00 metres, arriving at milestone M-1, which is the starting point of the description of this perimeter. 8 EX-10.2.5 8 ex10_25.txt EXHIBIT 10.2.5 Exhibit 10.2.5 December 7, 2005 To: Aurora Gold Corporation 3540 West 41st Avenue, Suite 204 Vancouver, BC V6N 3E6 Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Memorandum of Understanding regarding Santa Clara Project Translator's Declaration I, Tomas Almeida, Certified Portuguese to English Translator, Member in good standing of the Society of Translators and Interpreters of British Columbia (STIBC), which is a member association of the Canadian Translators and Interpreters Council (CTIC), hereby attest that, to the best of my knowledge and belief, the above-mentioned document is a true, correct and complete translation of the Portuguese document presented to me. Signed "Tomas Almeida" - ---------------------- Tomas Almeida 19780 Honeydew Drive Pitt Meadows, BC V3Y 2S6 Tel. 604-465-6128 Fax 604-465-6129 Cell.604-202-0031 Email: talmeida@telus.net ------------------ EX-10.3.1 9 ex10_31.txt EXHIBIT 10.3.1 Exhibit 10.3.1 HANS W. BIENER SUPPLYCONSULT GbR Karolinenplatz 5a 80333 Munchen, Germany Telephone: (+49) 178-7577784, Facsimile: (+49) 8091-561044 E-mail: hw.b@supplyconsult.de October 19, 2005 Mr. Klaus Eckhof Aurora Gold Corporation 30 Ledgar Road, Balcatta, Western Australia 6021 Australia Dear Mr. Eckhof, Re: Assignment of the 100 percent interest in OURO MIL Memorandum of Understanding held in trust for Aurora Gold Corporation This letter will acknowledge that I, Hans W. Biener, on behalf of SupplyConsult GbR, am holding in trust for the exclusive benefit of Aurora Gold Corporation, a Delaware corporation, a 100 percent interest in the OURO MIL Memorandum of Understanding dated October 18, 2005. The Ouro Mil Memorandum of Understanding covers mineral rights registered in the name of Cidines da Silva Batista and is located in the region of Gleba Surubim, known as Garimpo Ouro Mil, in the Municipality of Itaituba, state of Para, under the Process DNPM number 850415/2004. I irrevocably transfer the 100 percent interest in the OURO MIL Memorandum of Understanding to Aurora Gold Corporation without further consideration. Yours truly, /s/ "Hans W Biener" - -------------------- SUPPLYCONSULT GbR Hans W. Biener EX-10.3.2 10 ex10_32.txt EXHIBIT 10.3.2 Exhibit 10.3.2 - English Translated Version of Portuguese Document MEMORANDUM OF UNDERSTANDING By this present Agreement entered into by, on the one side, SUPPLYCONSULT, a company with its Head Office in Germany at Karolinen Platz 5, 80333, Muenchen, hereinafter referred to as "SUPPLY", in this act represented by its Director, Hans W. Biener, bearing the passport no. 3208063701 issued by the Federal Republic of Germany, and on the other side, CIDINES DA SILVA BATISTA, Brazilian, single, bearing the Identity Card No. 33943-62 issued by SSP-PA, and duly enrolled in the Individual Taxpayer's Register under no. CIC 628.603.302-59, with address at 18 Rua, Cidade Alta, Bairro Bella Vista, no. 680, in the city of Itaituba, state of Para, hereinafter referred to as 'PERMITTEE", and collectively referred to as "CONTRACTING PARTIES", SUPPLY and PERMITTEE have decided amongst themselves as righteous and agreed upon the following: A. WHEREAS PERMITTEE is the beneficial titleholder of certain mineral rights located in the region of Gleba Surubim, known as GARIMPO OURO MIL, in the Municipality of Itaituba, state of Para, under the Process DNPM no. 850415/2004 and with the exploration licence requirement filed before the DNPM on 30JUL2004, those certain mineral rights hereinafter referred to as GARIMPO OURO MIL, being the said mineral rights, for their better understanding, specified in Attachment A hereto. B. WHEREAS SUPPLY is interested in acquiring the mineral rights to GARIMPO OURO MIL, and for such purpose shall be granted access to information gathered on site by the ASSIGNORS. C. WHEREAS SUPPLY (ASSIGNEE) has the necessary technological means to survey and develop the economic potential of the gold mineral reserves as well as the required resources to carry out exploration work in GARIMPO OURO MIL. D. WHEREAS the CONTRACTING PARTIES wish to enter into and celebrate an Agreement for the Assignment and Transfer of Mineral Rights and for such purpose SUPPLY agrees to enter in a process of incorporating a Brazilian legal entity of which SUPPLY will be either a partner or the newly incorporated company shall act as Purchaser's appointee of the mineral rights comprised in the GARIMPO OURO MIL. In order to preserve the negotiations, the parties agree to execute this instrument, hereinafter referred to as "MEMORANDUM OF UNDERSTANDING", and having as its object the establishment of the right and obligations of the CONTRACTING PARTIES among themselves and any third party. A definitive Agreement for the Assignment and Transfer of Mineral Rights shall be celebrated by the parties in a later stage, following the terms and conditions outlined in the clauses ahead. E. WHEREAS SUPPLY, in order to maintain the negotiations and eventually to celebrate a definitive Assignment and Transfer Option of Mineral Rights Agreement, agrees to carry out a due diligence within 60 (sixty) days; and for such purpose the CONTRACTING PARTIES have decided to enter into and celebrate this "MEMORANDUM OF UNDERSTANDING", according to the following terms and conditions: 1. EVALUATION AND STATEMENT OF INTEREST 1.1 SUPPLY hereby commits itself to pay to the PERMITTEE R$12,000.00 (twelve thousand Reals) for the right to thoroughly evaluate the area comprised in the GARIMPO OURO MIL. 1.2 The PERMITTEE, as from the date of the execution hereof and within the term of 60 (sixty) days, undertakes not to assign, transfer, encumber or lien the mineral rights comprised in GARIMPO OURO MIL, and, according to the terms and conditions set forth in this instrument, agrees to make available for SUPPLY to inspect and examine all and any data it might have access to in regard to GARIMPO OURO MIL. During this period, SUPPLY shall make site visit, examine the data and decide to exercise its option to acquire GARIMPO OURO MIL. In case SUPPLY decides to exercise its option to acquire GARIMPO OURO MIL, it shall notify the PERMITTEE of its decision at least five (5) days prior to the expiration of the abovementioned period. 1.3 In case SUPPLY, during the time established in item 1.2 or even after that, finds out that GARIMPO OURO MIL, hereto represented by the DNPM requirement registration no. 850415/2004 - which is under exam of priority by the DNPM - is not a priority exploration license, the PERMITTEE shall be held liable to obtain such rights from any third party within a period of 30 (thirty) days, at its sole expenses, and with no onus to SUPPLY. In this case, SUPPLY is entitled to take all the necessary steps to grant priority over the said Mineral Rights and shall deduct any and all expense arising from this action from the remaining payments to be made to the PERMITTEE or to terminate this agreement or any other it might have signed without incurring in any expense and it also shall receive back any and all amounts already paid to the PERMITTEE. 2. ASSIGNMENT AND TRANSFER OPTION OF MINERAL RIGHTS 2.1 Having SUPPLY notified the PERMITTEE of its interest to acquire the GARIMPO OURO MIL, the parties hereby shall celebrate an Agreement for the Assignment and Transfer of Mineral Rights and Other Covenants, within a period of 90 (ninety) days, which shall establish and govern the terms and conditions of the transfers, as well as to register such agreement before the DNPM, provided it agrees to pay to the PERMITTEE as price for the assignment of the mineral rights and the possession rights, the values established as follows:
Dates (subject to change) Payment US$ I Upon celebration of the definitive agreement 30,000 II Within 6 months of the execution of the definitive agreement 70,000 III Within 18 months of the execution of the definitive agreement 120,000 IV Within 30 months of the execution of the definitive agreement 180,000 V Within 42 months of the execution of the definitive agreement 1,500,000 Total US$1,900,000
2.1.1. The values due shall be paid in Brazilian currency (reals) within five days upon the funds remittance. For the currency conversion and calculation, it shall be made according to the average buying and selling commercial exchange rate in effect on the effective date of the funds entrance, or in the absence thereof, the buying and selling commercial exchange rate as informed by the Central Bank on the date previous to the payment. 2.1.2. In addition to the price herein established, SUPPLY shall pay the PERMITTEE a NSR (royalty) of 1.5% (one and a half percent) of the gold sales which might be obtained by the PERMITTEE from the mining activities in the GARIMPO OURO MIL, being deducted the values corresponding to any and all direct taxes of any nature incurring upon the commercialization of gold. The PERMITTEE is entitled, at any time, to a back-in right of 100% in respect to the NSR, upon payment in reals of the equivalent of US$1,000,000 according to the terms and conditions set forth above. 2.2 The PERMITTEE agrees to, immediately after confirming priority over the Mineral Rights comprised in the GARIMPO OURO MIL - which proven shall be presented to SUPPLY - assign and transfer the said rights, upon payment by SUPPLY to the PERMITTEE of the amount established in (I) above as well as confirmation of such priority. 2.3 The payments herein set forth shall be done through a bank deposit in favour of Cidines da Silva Batista, account no. 20517-6, Branch 0759-5, of Banco Bradesco. 2.4 All the productive activities are concentrated in a segment of the Highway BR-163 which links the cities of Cuiaba and Santarem, comprising the area of interest of the CONTRACTING PARTIES. Therefore, the Parties shall take all the necessary actions, jointly or separately and in the most convenient way, in order to keep the GARIMPO OURO MIL in good standing and conditions, as well as out of any restrictions or informal miners. Being the PERMITTEE the legitimate and sole owner of the area comprising the GARIMPO OURO MIL, sharing in the mining results, right to rental or any indemnifications are included in the royalty established in clause 2.1 above. For such purpose, the PERMITTEE agrees to the best of its ability to provide to SUPPLY with technical, legal and operational support, as well as undertake to endeavour its best efforts to give SUPPLY any information it might have access to with respect to the GARIMPO OURO MIL, and to take all the actions necessary for the expeditious registration of the documents needed in order for the Agreement to be implemented, with SUPPLY being responsible for the financial expenses incurred to obtain such results. 2.5 SUPPLY may, before or after the registration of the Exploration Agreement Deed, transfer to any third parties, in whole or in part, the mineral rights granted to it under this Agreement, provided there is an inclusion of a clause in this regard. 2.6 At any time before the Option exercise and without onus to it, SUPPLY will be entitled to terminate the Agreement and drop the GARIMPO OURO MIL project, provided it notifies the PERMITTEE in writing - by fax or communication notice - of its intention, being henceforth free of any and all payment commitments yet to be due. If SUPPLY decides to exercise its option to terminate the Agreement, it shall assign back to the PERMITTEE the Mining Rights object of this agreement together with a detailed technical report which shall include all and any information gathered to date, within 15 days. 2.7 The CONTRACTING PARTIES will be liable for a jointly follow-up before the DNPM in regard to the Mineral Rights comprised in GARIMPO OURO MIL, especially regarding exploration permit requests, as well as undertake to endeavour their best efforts in order to keep the exploration license with respect to DNPM process no. 850415/2004, with SUPPLY bearing all expenses incurred for such purpose. 2.8 Each of the CONTRACTING PARTIES herein will be liable for any and all environmental damages resulting from their activities carried out in the GARIMPO OURO MIL. In this regard, the PERMITTEE will be responsible for the environmental damages it had caused and previously present in GARIMPO OURO MIL. 3. CONFIDENTIALITY 3.1. The fact that the Agreement has been executed as well as its contents and any technical and financial or other information pursuant to the GARIMPO OURO MIL constitute confidential information of the CONTRACTING PARTIES and shall not be disclosed, divulged or made known to any third party or published without previous written consent of the non-disclosing party. Exception to the confidentiality obligation will be the case in which any of the CONTRACTING PARTIES needs to disclose said information as a result of it is being linked to the stock market and disclosure is required by law. 4. NOTICES 4.1. Any notice related to this agreement shall be given in writing and shall be deemed to be effectively given upon personal delivery, or by registered letter or upon receipt of transmission by fax or cable, provided there is an acknowledgement of receipt. Such notices shall be sent to each party representative herein established. 5. REPRESENTATIONS AND WARRANTIES 5.1. Each of the PARTIES herein represents and warrants to each other that: (a) they are corporations duly incorporated and validly existing and in good standing under the laws of their countries, and have the power, capacity and authority to enter into and perform the Agreement and all transactions contemplated herein; (b) there are no actions in their By-Laws, statutes or agreements of which they are a party or object which may prevent the celebration and execution of this Agreement; (c) The celebration of the Agreement will not result in a default under any agreement or instrument to which the PARTIES are a party, as well as will not infringe any applicable laws, regulations, suits, decree or rule which they might obey or any arrangement, waiver, or agreement of which constitute a party; (d) there are no pending liabilities, warranties, pledge, or any other obligations which might significantly in any way interfere with the mineral rights object of the Agreement, and said rights are free and clear of any claims, liens or encumbrances; (e) in respect of the mineral rights herein referred to, there are no contractual obligations in respect to royalties, finder's fee and/or any other contribution to any landowners, occupiers or third parties; (f) there are no pending environmental liabilities. 6. AMENDMENTS AND PREVIOUS EVENTUAL AGREEMENTS AND GENERAL CONDITIONS 6.1. This agreement represents and comprises all the understanding and commitments agreed amongst the PARTIES, and replaces or overlaps any and all previous agreements and negotiations, verbal or written, with regard to the issues herein addressed. 6.2. By this agreement the signatories, their successors and any PERMITTEE assignees are obliged to comply with the terms and conditions set forth herein. 6.3. This agreement shall not be amended, in its parts or as a whole, except when previously agreed amongst the parties, and provided that such changes are done upon a written consent, executed and signed by the PEMITTEE representative of each party. 6.4. None of the CONTRACTING PARTIES is allowed to accept any payment default of the amounts foreseen herein, and in case any of payment defaults, it shall not be understood by the non-defaulting party as a future standard procedure. 6.5. This agreement and its annexes, which after being signed by the CONTRACTING PARTIES and the witnesses will make an integral part of this instrument, represent the whole agreement entered into by the Parties, and shall govern and regulate their activities, according to the terms and conditions set forth hereto. No other business carried amongst the parties, except for the one established herein, shall be accepted as valid unless it proves to be an amendment to this agreement. 6.6. The terms set forth in this agreement are valid and binding and shall regulate and govern the business amongst the CONTRACTING PARTIES, until a definitive Agreement is executed which is expected to occur by 15JAN2006. 6.7. The CONTRACTING PARTIES declare and warrant that they will grant an extrajudicial, executive power to this agreement, with full force, according to the terms established in item II, article 621 of the Code of Civil Procedure, Law no. 8953/94. 7. GOVERNING LAW AND DISPUTE RESOLUTION 7.1. This agreement shall be governed by the laws of Brazil. 7.2. The Parties hereby agree that any and all dispute arising from this agreement shall be resolved at the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, with the waive of any other, prevailing over any others. However, the parties are entitled to solve any dispute by means of arbitration at the court of the city of Rio de Janeiro, provided that they have reached this decision by mutual agreement. IT WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of the witnesses below, who also subscribe this instrument, for all legal effect. Itaituba, Pa, October 18, 2005 /s/ "CIDINES DA SILVA BATISTA" /s/"HANS BIENER" - ------------------------------ ---------------- (Signature) (Signature) CIDINES DA SILVA BATISTA HANS W. BIENER PERMITTEE PARTY SUPPLYCONSULT Witnesses 1) (Signature) signature not legible 2) Stamp and signature of Notary Public dated 20OCT2005 in Itaituba, authenticating the signature of Ruy Barbosa de Mendon a signing for Cidines da Silva Batista. Stamp and signature of Notary Public dated 27OCT2005 in Rio de Janeiro, authenticating the signature of HANS W. BIENER. ANNEX A Essential Data of PROCESS DNPM 850415/04 Essential Data File: 850415; Year: 2004; Active: Yes Applicant: CIDINES DA SILVA BATISTA Location: OURO MIL Last Event: REQ SURVEY/REQ COMPLETE SURVEY PROTOCOL 30JUL2004 Last Diploma - Date of Protocol: 30JUL2004 Last Load: - Hectares Requested: 10000 - Actual Hectares: 10000 Substance Class GOLD ORE metal containing mineral substances Municipality: District State ITAITUBA ITAITUBA PA Active Polygonal Version / Seq: 1 Location: DNPM Listing Anchoring Point: Anchoring Point registered on January 2000 Latitude: + 7deg 2' 35.8" Longitude: 56deg 14' 17.1" Anchoring Vector - Distance of the First Vertex: 20553m Angle: 70deg 4' Quadrant: NW Polygonal - Area Informed: 10000 Ha Calculated Area: 10000 Ha Number of Vertices: 4 Vectors: Distance Direction 10000.00 S 10000.00 W 10000.00 N 10000.00 E EX-10.3.3 11 ex10_33.txt EXHIBIT 10.3.3 Exhibit 10.3.3 December 7, 2005 To: Aurora Gold Corporation 3540 West 41st Avenue, Suite 204 Vancouver, BC V6N 3E6 Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net From: Tomas Almeida, Certified Translator Re: Translation of Memorandum of Understanding regarding Ouro Mil Project Translator's Declaration I, Tomas Almeida, Certified Portuguese to English Translator, Member in good standing of the Society of Translators and Interpreters of British Columbia (STIBC), which is a member association of the Canadian Translators and Interpreters Council (CTIC), hereby attest that, to the best of my knowledge and belief, the above-mentioned document is a true, correct and complete translation of the Portuguese document presented to me. Signed "Tomas Almeida" Tomas Almeida 19780 Honeydew Drive Pitt Meadows, BC V3Y 2S6 Tel. 604-465-6128 Fax 604-465-6129 Cell.604-202-0031 Email: talmeida@telus.net EX-10.4.1 12 ex10_41.txt EXHIBIT 10.4.1 Exhibit 10.4.1 HANS W. BIENER SUPPLYCONSULT GbR Karolinenplatz 5a 80333 M nchen, Germany Telephone: (+49) 178-7577784, Facsimile: (+49) 8091-561044 E-mail: hw.b@supplyconsult.de November 05, 2005 Mr. Klaus Eckhof Aurora Gold Corporation 30 Ledgar Road, Balcatta, Western Australia 6021 Australia Dear Mr. Eckhof, Re: Assignment of the 100 percent interest in the SAO DOMINGO Memorandum of Understanding held in trust for Aurora Gold Corporation This letter will acknowledge that I, Hans W. Biener, on behalf of SupplyConsult GbR, am holding in trust for the exclusive benefit of Aurora Gold Corporation, a Delaware corporation, a 100 percent interest in the SAO DOMINGO Memorandum of Understanding dated October 24, 2005. The Sao Domingo Memorandum of Understanding covers mineral rights registered in the name of Antonio Barros de Souza and are located in the region of Garimpo do Sao Domingos, in the Municipality of Itaituba, State of Para, under the Processes DNPM numbers 650.209/99 to 650.308/99. I irrevocably transfer the 100 percent interest in the SAO DOMINGO Memorandum of Understanding to Aurora Gold Corporation without further consideration. Yours truly, /s/"Hans W Biener" - -------------------- SUPPLYCONSULT GbR Hans W. Biener EX-10.4.2 13 ex10_42.txt EXHIBIT 10.4.2 Exhibit 10.4.2 - English Translated Version of the Portuguese Document MEMORANDUM OF UNDERSTANDING By this present Agreement entered into by, on the one side, SUPPLYCONSULT, a company with its Head Office in Germany at Karolinen Platz 5, 80333, Muenchen, hereinafter referred to as "SUPPLY", in this act represented by its Director General, Hans W. Biener, bearing the passport no. 3208063701 issued by the Federal Republic of Germany, and on the other side, ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearing the Identity Card No. RG 5116343 issued by SSP-PA, and duly enrolled in the Individual Taxpayer's Register under no. CIC 070.601.652-15, with address at Av. Maranhao, no. 91, in the city of Itaituba, state of Para, hereinafter referred to as 'GARIMPEIRO", and collectively referred to as "CONTRACTING PARTIES", and a representative of each party hereinafter referred to jointly as Counterparts, SUPPLY and GARIMPEIRO have decided amongst themselves as righteous and agreed upon the following: OBJECT: Hereinafter named GARIMPO, as detailed in Annex A of this instrument, this object is made up of Processes DNPM no. 650.209/99 to 650.308/99 totaling 5,000 ha., which, after an appraisal of the geological potential by and being of interest to SUPPLY, will result in a business transaction, following the terms and conditions as specified in item 2.3 below. A. WHEREAS GARIMPEIRO is the titleholder of certain mineral rights located in the region of Garimpo do Sao Domingos, in the Municipality of Itaituba, State of Para, which rights refer to PLG Processes DNPM no. 650.209/99 to 650.308/99, with assured priority, and prepared exactly as required by the relevant legislation, which rights include the possession of the surface area (although not yet applied for, but are included for the purposes of this MEMORANDUM OF UNDERSTANDING), hereinafter referred to as GARIMPO, being the said mineral rights, for the better understanding, specified in Annex A attached hereto. B. WHEREAS SUPPLY wishes to explore and assess the gold potential and have an option to acquire title to the mineral rights of GARIMPO, and for such purpose has been granted access to information gathered on site by GARIMPEIRO, who agrees to this, with the knowledge that the work done is at SUPPLY's expense and risk. C. WHEREAS SUPPLY has the necessary technological and economic means to develop and carry out exploration work in the GARIMPO. D. WHEREAS the CONTRACTING PARTIES wish to enter into and celebrate an Agreement for the Assignment and Transfer of Mineral Rights and for such purpose SUPPLY will appoint a person of trust to act on its behalf by means of a specific agreement which is hereto attached. In order to preserve the negotiation, the parties agree to execute this temporary instrument, hereinafter referred to as "MEMORANDUM OF UNDERSTANDING", and having as its object the establishment of the right and obligations of the CONTRACTING PARTIES among themselves and any third party. A definitive Agreement for the Assignment and Transfer of Mineral Rights shall be celebrated by the parties in a later stage, following the terms and conditions outlined in the clauses ahead. E. WHEREAS SUPPLY, in order to maintain the Assignment and the Option to celebrate a definitive Assignment and Transfer Option of Mineral Rights Agreement, agrees to carry out a due diligence within 60 (sixty) days; and for such purpose, the CONTRACTING PARTIES have decided to enter into and celebrate this "MEMORANDUM OF UNDERSTANDING", according to the following terms and conditions: 1. EVALUATION AND STATEMENT OF INTEREST 1.1 - In view of item B of this MEMORANDUM OF UNDERSTANDING, SUPPLY hereby undertakes to pay GARIMPEIRO the equivalent of US$20,000 (twenty thousand US dollars) in reals for the right to appraise duly and in detail the GARIMPO, in consideration for the authorization hereby granted, which includes giving a Power of Attorney to SUPPLY and its legal representative in Brazil as per Annex A. 1.2 - The above-mentioned payment is made hereby, with the signing of this instrument as proof of payment, while the subsequent payments will be made through a bank deposit in favour of Maria Izeuda Lima Marques, with Individual Taxpayer Register no. CPF 110.441.442-20, chequing account no. 28417 with Branch 524-0 of BRADESCO. GARIMPEIRO will indicate to SUPPLY the amount in Brazilian currency, and for this purpose will use the commercial rates of exchange for the purchase and sale of US currency prevailing in Rio de Janeiro, at the exchange rate used by SUPPLY or its successor on the day prior to the payment as informed in the newspaper "Gazeta Mercantil"or, in its absence, in another major daily newspaper. 1.3 - GARIMPEIRO, as from the date of the execution hereof and within the period of 60 (sixty) days, undertakes not to assign, transfer, encumber or lien the mineral rights comprised in the GARIMPO, which, according to the terms and conditions set forth in this instrument, and agrees to make available for SUPPLY to inspect and examine all and any data it might have access to in regard to GARIMPO. During this period, SUPPLY shall make site visits, examine the data and decide to exercise its option to acquire GARIMPO. In case SUPPLY decides to exercise its option to acquire GARIMPO, it shall notify GARIMPEIRO, of its decision at least five (5) days prior to the expiration of the above-mentioned period. 2. ASSIGNMENT AND TRANSFER OPTION OF MINERAL RIGHTS 2.1 - Having SUPPLY notified GARIMPEIRO of its interest to acquire the GARIMPO, the parties hereby shall celebrate an Agreement for the Assignment and Transfer of Mineral Rights and Other Covenants, which will establish and govern the terms and conditions of the transfers, as well as to register such agreement before the DNPM, provided it agrees to pay as price for the assignment of the mineral rights and the possession rights, the values established as follows: 2
Payment Date US$ I 30DEC2005 (as stipulated in items 1.2 and 1.3) 70,000 II 30JUN2006 (as stipulated in items 1.2 and 1.3) 150,000 III 30JUN2007 (as stipulated in items 1.2 and 1.3) 250,000 IV 30JUN2008 (as stipulated in items 1.2 and 1.3) 310,000 V 30DEC2008 (as stipulated in items 1.2 and 1.3) 1,500,000 Total US$2,300,000
2.1.1 - In addition to the price herein established, SUPPLY shall pay to GARIMPEIRO a monthly participation in the mining results which might be obtained in any of the mining rights in the GARIMPO, in a value equivalent to 2% (two percent) of the monthly net results of the primary gold production, as defined below in item 2.1.2, in any of the mineral rights in question. 2.1.2 - The participation in the mining results will be paid by the 10th (tenth) business day of the month subsequent to the production month, and the payment will be made through a bank deposit as stipulated by GARIMPEIRO. 2.1.3 - For the purposes specified above, the production net result shall correspond to the value of the gross revenue SUPPLY obtains from the sale of the gold produced by SUPPLY and originating from the Garimpo, being deducted the values corresponding to (i) transportation cost from the mine to the refinery; (ii) refining cost; (iii) any and all direct taxes of any nature incurring upon the commercialization of the gold; and (iv) "financial compensation" as provided for in Law 7790 of December 28, 1989. 2.1.4 - SUPPLY is entitled to the right to the participation payment in the mining results upon payment, in local currency, of US$1,000,000.00 (one million US dollars). 2.1.4.1 - The above right conferred upon SUPPLY may be exercised at any time, by means of a notice addressed to GARIMPEIRO. 2.1.4.2 - If SUPPLY exercises the right referred to in the above item, the payment referred to therein shall be made within 10 (ten) days, and the exchange rate used shall be that referred to in clause 1.2. 2.2 - GARIMPEIRO agrees to immediately after SUPPLY confirms the interest over the Mineral Rights comprised in the GARIMPO, assign and transfer the said rights, upon payment (I) which will take place with the registration of the transferred right and upon confirmation of its priority, which shall permit SUPPLY to execute in the GARIMPO for a period of 38 (thirty-eight) months as from the date of this agreement, assessment work and geological survey which it deems necessary to ascertain the existence of possible primary deposits which may be economically explored, and therefore, its interest in purchasing or not the respective mineral rights. It should be noted that during the geological assessment of the GARIMPO, GARIMPEIRO may develop works therein provided that work in the said mining site does not interfere with SUPPLY's research activities, in which case the miners will need to stop their work temporarily or definitively, whenever SUPPLY so deems this necessary. 3 2.3 - All the productive activities are concentrated in a segment of the Highway BR-163 which links the cities of Cuiaba and Santarem, comprising the area of interest of the CONTRACTING PARTIES. Therefore, the Parties shall take all the necessary actions, jointly or separately and in the most convenient way to defend the interests of the GARIMPO. Regarding the ownership, GARIMPEIRO declares to be the legitimate and sole owner of the area comprising the GARIMPO, and therefore, the mining results, right to rental or any indemnifications are included in the prices established in clause 2.1.2 above. For such purpose, GARIMPEIRO agrees to the best of its ability to provide to SUPPLY with technical, legal and operational support, as well as undertake to endeavour its best efforts to give SUPPLY any information it might have access to with respect to the GARIMPO, and to take all actions necessary for the expeditious registration of the documents needed in order for the Agreement to be implemented, with SUPPLY being responsible for the financial expenses incurred to obtain such results. 2.4 - SUPPLY may, after the registration of the Exploration Agreement, transfer to any third parties, the mineral rights granted to it under this Agreement, provided there is an inclusion of a clause in this regard. 2.5 - At any time before the Option exercise, SUPPLY will be entitled to terminate the Agreement and drop the GARIMPO PROJECT regardless of the motive, being henceforth free of any and all payment commitments yet to be due. If SUPPLY decides to exercise its option to terminate the Agreement, it shall assign back to GARIMPEIRO the Mining Rights object of this agreement together with a detailed technical report which shall include all and any information gathered to date, within 15 days. 2.6 - The CONTRACTING PARTIES will be liable for a jointly follow-up before the DNPM in regard to the Mineral Rights comprised in the GARIMPO, especially regarding exploration permit requests, with all the expenses incurred of the responsibility of SUPPLY. 2.7 - Each of the CONTRACTING PARTIES herein will be liable for any and all environmental damages resulting from their activities carried out in the GARIMPO. In this regard, GARIMPEIRO shall be responsible for the environmental damages caused up to now in the GARIMPO. In case of non-compliance of such obligations, SUPPLY is authorized to provide for eventual recovery work, deducting the expenses incurred from the amounts payable according to above item 2.3. 2.8 - In case SUPPLY, during the time established in item above or even after that, finds out that the GARIMPO, hereto represented by the DNPM requirement registration no. 650.209/99 to 650.308/99 - which is under exam of priority by the DNPM - is not a priority exploration license, GARIMPEIRO shall be obliged to obtain from thirty parties the said right without any onus to SUPPLY, within a period of 30 days, otherwise SUPPLY may take action, and also may deduct the amounts it may have paid or if it so wishes, SUPPLY may decide to rescind this instrument or the agreement that was to be signed later without onus to SUPPLY but enabling it to receive any amounts paid so far. 4 3. CONFIDENTIALITY 3.1 - The fact that the Agreement has been executed as well as its contents and any technical and financial or other information pursuant to the GARIMPO constitutes confidential information of the CONTRACTING PARTIES and shall not be disclosed, divulged or made known to any third party or published without previous written consent of the non-disclosing party. Exception to the confidentiality obligation will be the case in which any of the CONTRACTING PARTIES needs to disclose said information as a result of it is being linked to the stock market and disclosure is required by law. 4. COMMUNICATION 4.1 - Any notice related to this agreement shall be given in writing and shall be deemed to be effectively given upon personal delivery, or by registered letter or upon receipt of transmission by fax or cable, provided there is an acknowledgement of receipt. Such notices shall be sent to each party representative herein established. 5. REPRESENTATIONS AND WARRANTIES 5.1 - Each of the PARTIES herein represents and warrants to each other that: (a) they are corporations duly incorporated and validly existing and in good standing under the laws of their countries, and have the power, capacity and authority to enter into and perform the Agreement and all transactions contemplated herein; (b) there are no actions in their By-Laws, statutes or agreements of which they are a party or object which may prevent the celebration and execution of this Agreement; (c) The celebration of the Agreement will not result in a default under any agreement or instrument to which the PARTIES are a party, as well as will not infringe any applicable laws, regulations, suits, decree or rule which they might obey or any arrangement, waiver, or agreement of which it is a party; (d) There are no pending liabilities, warranties, pledge, or any other obligations which might significantly in any way interfere with the mineral rights object of the Agreement, and said rights are free and clear of any claims, liens or encumbrances; (e) In respect of the mineral rights herein referred to, there are no contractual obligations in respect to royalties, finder's fee and/or any other contribution to any landowners, occupiers or third parties; and to ensure good execution of the assessment, the miners owners of the GARIMPO, authorize SUPPLY to use the "AERODROMO" called Sao Domingos, alter its configuration and access routes, facilities and other improvements at its own expense and risk. 6. AMENDMENTS AND PREVIOUS EVENTUAL AGREEMENTS AND GENERAL CONDITIONS 6.1 - This agreement represents and comprises all the understanding and commitments agreed amongst the PARTIES, and replaces or overlaps any and all previous agreements and negotiations, verbal or written, with regard to the issues herein addressed. 5 6.2 - By this agreement the signatories, their successors and any authorized assignees are obliged to comply with the terms and conditions set forth herein. 6.3 - This agreement shall not be amended, in its parts or as a whole, except when previously agreed amongst the parties, and provided that such changes are done upon a written consent, executed and signed by one Counterpart, this being an authorized representative of each party. 6.4 - No tolerance by any of the CONTRACTING PARTIES with regard to future defaults of this instrument shall constitute an amendment or novation of the conditions agreed upon herein. 6.5 - This agreement and its annexes, which after being signed by the CONTRACTING PARTIES and the witnesses will make an integral part of this instrument, represent the whole agreement entered into by the Parties, and shall govern and regulate their activities, according to the terms and conditions set forth hereto. No other business carried amongst the parties, except for the one established herein, shall be accepted as valid unless it proves to be an amendment to this agreement. 6.6 - The terms set forth in this agreement are valid and binding and shall regulate and govern the business amongst the CONTRACTING PARTIES, until a definitive Agreement is executed which is expected to occur by 30DEC05. 6.7 - The CONTRACTING PARTIES declare and warrant that they will grant an extrajudicial, executive power to this agreement, with full force, according to the terms established (in item II, article 621 of the Code of Civil Procedure, Law no.8953/94). "Complement the provision given between the brackets". 7. GOVERNING LAW AND DISPUTE RESOLUTION 7.1 - This agreement shall be governed by and interpreted according to the laws of Brazil. 7.2 - The Parties hereby agree that any and all dispute arising from this agreement shall be resolved at the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, with the waiver of any other, prevailing over any others. However, the parties are entitled to solve any dispute by means of arbitration at the court of the city of Rio de Janeiro, provided that they have reached this decision by mutual agreement. IT WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of the witnesses below, who also subscribe this instrument, for all legal effect. 6 Itaituba, Pa, October 24, 2005 /s/"Antonio Barros de Souza" /s/"Hans W Biener" - ---------------------------- ---------------------------- (Signature) (Signature) ANTONIO BARROS DE SOUZA HANS W. BIENER Witnesses: 1) Signature not legible Notary Public stamp signed and dated 05SEP05 in Itaituba, authenticating the signature above with a hand icon stamp pointed to it. 7 POWER OF ATTORNEY ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearing the Identity Card No. RG 5116343 issued by SSP-PA, and duly enrolled in the Individual Taxpayer's Register under no. CIC 070.601.652-15, with address at Av. Maranhao, no. 91, in the city of Itaituba, state of Para, CEP 68181-140, appoints as his attorneys Hans W. Biener, German, married, businessman, bearing the passport no. 3208063701 issued by the Federal Republic of Germany, and Dr. Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, bearing the Identity Card No. 05.867.002-7 and Individual Taxpayer's Register no. CPF 753.468.697-00 to represent the Assignor before any physical or legal entity, registries and notary public offices in general, federal, state, municipal or Federal District agencies, in particular the Ministry of Mines and Energy, the Ministry of Environment, the National Department of Mineral Production (DNPM), the Brazilian Institute of Environmental and Renewable Natural Resources (Ibama) and state, municipal or Federal District environmental agencies. Furthermore, the Assignor grants power to the attorneys to look up the processes DNPM no. 650.209/99 to 650.308/99, and who may sub-establish the present instrument, in part on in whole, which is hereby signed and is to be valid until 30DEC05. Itaituba, Pa, October 24, 2005 /s/"Antonio Barros de Souza" - ---------------------------- (Signature) ANTONIO BARROS DE SOUZA Notary Public stamp signed and dated 05SEP05 in Itaituba, authenticating the signature above with a hand icon stamp pointed to it. 8 EX-10.4.3 14 ex10_43.txt EXHIBIT 10.4.3 Exhibit 10.4.3 December 7, 2005 To: Aurora Gold Corporation 3540 West 41st Avenue, Suite 204 Vancouver, BC V6N 3E6 Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Memorandum of Understanding regarding Sao Domingos Project Translator's Declaration I, Tomas Almeida, Certified Portuguese to English Translator, Member in good standing of the Society of Translators and Interpreters of British Columbia (STIBC), which is a member association of the Canadian Translators and Interpreters Council (CTIC), hereby attest that, to the best of my knowledge and belief, the above-mentioned document is a true, correct and complete translation of the Portuguese document presented to me. Signed"Tomas Almeida" - ---------------------- Tomas Almeida 19780 Honeydew Drive Pitt Meadows, BC V3Y 2S6 Tel. 604-465-6128 Fax 604-465-6129 Cell.604-202-0031 Email: talmeida@telus.net ------------------ EX-23.2 15 ex23_2.txt EXHIBIT 23.2 Exhibit 23.2 MOORE STEPHENS ELLIS FOSTER LTD. CHARTERED ACCOUNTANTS 1650 West 1st Avenue Vancouver, BC Canada V6J 1G1 Telephone: (604) 737-8117 Facsimile: (604) 714-5916 Website: www.ellisfoster.com ________________________________________________________________________________ CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the inclusion of our Report of Independent Registered Public Accounting Firm dated March 15, 2005 on the balance sheets of AURORA GOLD CORPORATION (the "Company") as at December 31, 2004 and 2003, the related statement of stockholders' equity for each of the two years in the period ending December 31, 2004, and the related statements of operations and cash flows for the period from October 10, 1995 (inception) to December 31, 2004 in the Company's Registration Statement on Form SB-2 to be filed with the United States Securities and Exchange Commission in respect of the registration of 9,500,000 shares of the Company's common stock. In addition, we consent to the reference to us under the heading "Experts" in the Registration Statement. "MOORE STEPHENS ELLIS FOSTER LTD." - ---------------------------------- MOORE STEPHENS ELLIS FOSTER LTD. CHARTERED ACCOUNTANTS Vancouver, Canada December 15, 2005 ________________________________________________________________________________ MSEF A partnership of incorporated professionals An independently owned and operated member of Moore Stephens North America Inc., a member of Moore Stephens International Limited -members in principal cities throughout the world -----END PRIVACY-ENHANCED MESSAGE-----