-----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, CL7quH7UDa4BCRUSd4pc64b5kVidnD3OJDVZLRQcxTNUrR0e8cZQVMGeIkgL5Z1N LeeO5GgQT8TYM+m3H8EThQ== 0001140361-06-004654.txt : 20060328 0001140361-06-004654.hdr.sgml : 20060328 20060328172134 ACCESSION NUMBER: 0001140361-06-004654 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 17 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060328 DATE AS OF CHANGE: 20060328 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: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-24393 FILM NUMBER: 06715925 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 10KSB 1 form10-ksb.txt AURORA GOLD CORPORATION 10-KSB 12-31-2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal year ended December 31, 2005 [_] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________ to ______________ Commission file number 0-24393 AURORA GOLD CORPORATION (Name of small business issuer in its charter) Delaware 13-3945947 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 30 Ledger Road, Balcatta, Western Australia, Australia 6021 (Address of principal executive offices) (Zip Code) Issuer's telephone number (+61) 8 9240-2836 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Common stock, par value $0.001 per share NASD OTC Bulletin Board Title of each class Name of each exchange on which registered Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [_] Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part 111 of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most recent fiscal year. $Nil State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the last 60 days. $41,079,544 as of March 13, 2006. State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 44,218,522 shares of common stock were outstanding as of March 15, 2006. Documents incorporated by reference herein: None Transitional Small Business disclosure format (Check one); Yes [_] No [X] AURORA GOLD CORPORATION This annual report contains statements that plan for or anticipate the future and are not historical facts. In this Report these forward looking statements are generally identified by words such as "anticipate," "plan," "believe," "expect," "estimate," and the like. Because forward-looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in Item 1. "Business," Item 2. "Properties," Item 6. "Management's Discussion and Analysis of Financial Condition and Results of Operations," Item 7. "Financial Statements" and Item 12 "Certain Relationships and Related Transactions". The Private Securities Litigation Reform Act of 1995, which provides a "safe harbor" for such statements, may not apply to this Report. ITEM 1. DESCRIPTION OF BUSINESS (A) General 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 six 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 be dependent on future additional financing in order to maintain our operations and continue our exploration activities. (B) Significant Developments in Fiscal 2005 and Subsequent Events In fiscal 2005 the Company issued 13,000,000 shares (fiscal 2004 - 100,000 shares) for cash of $650,000 (fiscal 2004 - $22,500) and issued 3,684,091 shares (fiscal 2004 - 0 shares) to settle debts of $162,500 (fiscal 2004 - $0). The carrying value of the indebtedness approximated the fair market value of the common shares issued. 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 Property 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 Property. 2 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 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 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 October 27, 2005 Aurora Gold incorporated a Brazilian subsidiary Aurora Gold Mineracao. Between September 5, 2005 and December 31, 2005 the Company signed seven Memorandum of Understanding ("MOU") covering the Nova Porto, Santa Clara, Ouro Mil, Santa Isabel, Sao Domingos, and Sao Joao and Piranhas properties located in the Municipality of Itaituba, Tapajos gold province, State of Para, Brazil. The MOUs provided the Company a review period, ranging from two months to six months, to access the mineral potential of the properties. Subsequent to year-end the company signed five option agreements covering the Nova Porto, Ouro Mil, Santa Isabel, Sao Domingos and Sao Joao mineral exploration licences located in the Municipality of Itaituba, in the Tapajos gold province of the State of Para, Brazil. The Piranhas MOU provides Aurora Gold Mineracao Ltda with a 180 day review period to access the gold potential of the property. If Aurora Gold Mineracao decides to proceed with acquiring a 100 percent interest in the title to the mineral rights then Aurora Gold Mineracao 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. Aurora Gold Mineracao and the Vendors would then enter into an Option Agreement for the Assignment and transfer of the mineral rights. The terms of the Piranhas option agreement, as specified in the MOU, allow Aurora Gold Mineracao to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Piranhas project mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: June 30, 2006 - USD $30,000; July 21, 2006 - USD $70,000; July 21, 2007 - USD $120,000; July 21, 2008 - USD $180,000; July 21, 2009 - USD $1,600,000 for a total of USD $2,000,000. The vendor will have a 1.5% Net Smelter Royalty. The option agreement can be terminated at any time upon written notice to the vendor and Aurora Gold Mineracao will be free of any and all payment commitments yet to be due. The Novo Porto option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Novo Porto property mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: December 25, 2005 - USD $2,500; January 15, 2006 - USD $10,000; May 30, 2006 - USD $37,500; May 30, 2007 - USD $50,000; May 30, 2008 - USD $75,000; May 30, 2009 - USD $1,850,000 for a total of USD $2,025,000. The agreement was not formally executed until 2006 and the initial payment of $2,500 due December 25, 2005 was not paid until 2006. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. In March 2006 the Company decided not to follow-up it's preliminary exploration program on the Novo Porto property and has decided not to exercise it's option to acquire the property. 3 The Ouro Mil option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Ouro Mil property mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: January 20, 2006 - USD $30,000; June 20 2006 - USD $70,000; June 20, 2007 USD $120,000; June 20, 2008 - USD $180,000; December 20, 2008 - USD $1,500,000 for a total of USD $1,900,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000.The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Santa Isabel option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Santa Isabel property mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: January 21, 2006 - USD $25,000; July 21, 2006 - USD $60,000; July 21, 2007 - USD $80,000; July 21, 2008 - USD $100,000; July 21, 2009 - USD $1,500,000 for a total of USD $1,765,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Sao Domingos option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Sao Domingos property mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: January 30, 2006 - USD $31,500; July 30, 2006 - USD $67,500; July 30, 2007 USD $112,500; July 30, 2008 - USD $139,500; December 30, 2008 - USD $675,000 for a total of USD $1,026,000. The vendor will have a 2.0% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $500,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Sao Joao option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Sao Joao property mineral rights via structured cash payments. The total option agreement payments for the licence are structured as follows: April 12, 2006 - USD $20,000; September 12, 2006 - USD $25,000; September 12, 2007 - USD $60,000; September 12, 2008 - USD $80,000; September 12, 2009 - USD $1,250,000 for a total of USD $1,435,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. In February 2006, the Company closed a private placement of 8,000,000 common shares of the Company at $0.50 per common share for cash proceeds of $4,000,000. The private placement was done with 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). 4 (C) Exploration and Development The Company conducts its exploration and property acquisition activities through it's head office which is located at 30 Ledgar Road, Balcatta, Western Australia, 6021 Australia. The telephone number is (+61 8) 9240-2836. The Field office for the Company's exploration activities in Brazil is located at Estrada Do Bis, 476, Bairro, Bom Jardim, Itaituba, in the Tapajos gold province of the State of Para, Brazil. We maintain an accounting and bookkeeping office located at 238 West 4th Street, Suite 2, North Vancouver, B.C., Canada V7M 1H7. The telephone number is (604) 687-4432 and the facsimile number is (604) 687-4709. The Company is currently concentrating its exploration activities in Brazil and Canada. The Company is also examining data relating to the potential acquisition of other exploration properties in Mexico and South America. The Company has signed option agreements on five exploration licences located in the Municipality of Itaituba, in the Tapajos gold province of the State of Para, Brazil and also owns or controls unpatented mining claims in British Columbia, Canada. The Company's strategy is to concentrate its investigations into: (i) Existing operations where an infrastructure already exists; (ii) Properties presently being developed and/or in advanced stages of exploration which have potential for additional discoveries; and (iii) Grass-roots exploration opportunities. For the year ended December 31, 2005 the Company recorded exploration expenses of $347,307 compared to $60,082 in fiscal 2004. The following is a breakdown of the exploration expenses by property: United States, Alaska $0 (2004 - $39,113); Brazil $345,271 (2004 - $19,000) and Canada, Kumealon property $2,036 (2004 - $1,969). The Company has commenced reconnaissance exploration programs on each of the properties. The properties Nova Porto, Ouro Mil, Santa Isabel, Sao Joao and Sao Domingo's properties are located in the southern part of the rich and largely unexplored Tapajos gold province. Aurora Gold has conducted preliminary investigations of the Sao Joao property area, which has confirmed the existence of mineralised quartz veins and stockwork systems within these Intrusive Granite Suites and will continue to evaluate the property. A soil sampling program was completed over the Nova Porto property area. The grid was laid out on a line spacing of 200m for the east west lines with sampling at 50m intervals along these lines. Concurrently geological mapping was conducted on and around the zones associated with the southern extension of the fault. A literature review was carried out on the Santa Isabel property resulting in a compilation of previous soil sampling and mapping. Limited rock chip sampling confirmed the existence of mineralisation. A limited rock chip and laterite program was carried out over the Ouro Mil site to confirm the potential for economic mineralisation. The Ouro Mil site was also inspected for the potential of a future logistical centre. Sao Domingo's property was selected to locate the Company's field office. The site was selected due to the access to power, phone and a well developed current infrastructure. From the Sao Domingos field office the other Company properties can be easily accessed and serviced by boat, vehicle and aircraft. Limited rock chip sampling was carried out over several outcrops and previous workings on the Sao Domingos property. A visual inspection of the rock chips confirms the lithologies correlated to other known mineralised lithologies common to gold producing areas near to the Sao Domingos properties. 5 The Company's properties are in the exploration stage only and are without a known body of Mineral Reserves. The Company's primary objective is to explore for gold, silver, base metals and industrial minerals and, if warranted, to develop those existing mineral properties. Its secondary objective is to locate, evaluate, and acquire other mineral properties, and to finance their exploration and development through equity financing, by way of joint venture or option agreements or through a combination of both. See "Item 2. Description of Property." Development of the properties will follow only if satisfactory exploration results are obtained. Mineral exploration and development involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. There is no assurance that the Company's mineral exploration and development activities will result in any discoveries of commercially viable bodies of mineralization. The long-term profitability of the Company's operations will be, in part, directly related to the cost and success of its exploration programs, which may be affected by a number of factors. (D) Employees As of March 13, 2006 there were eight full time employees and three part time employees. (E) Regulation of Mining Activity The Company's interests in its properties will be subject to various laws and regulations concerning exploration, allowable production, taxes, labour standards, environmental protection, mine safety, regulations relating to royalties, importing and exporting of minerals and other matters. In addition, new laws or regulations governing operations and activities could have a material adverse impact on the Company. (F) Foreign Countries and Regulatory Requirements To the extent that the company acquires or continues to develop resource properties outside of the United States of America the mineral exploration and mining activities on the Company's properties may be affected in varying degrees by political stability, and the policies of other nations. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may adversely affect its business. Operations may be affected by government laws and regulations or the interpretations thereof, including those with respect to export controls, expropriation of property, employment, land use, water use, environmental legislation and mine safety. Operations may be also affected by political and economic instability, confiscatory taxation, restriction on currency conversions, imports and sources of supplies, the expropriation of private enterprises, economic or other sanctions imposed by other nations, terrorism, military repression, crime, and extreme fluctuations in currency exchange rates and high inflation which may make it more difficult for the Company to raise funds for the development of its mineral interests in some countries. (G) Competition Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Many companies are engaged in the exploration of mineral properties. The Company encounters strong competition from other mining companies in connection with the acquisition of properties producing or capable of producing gold, silver, base metals and industrial metals. Many of these companies have substantially greater technical and financial resources than the company and thus the Company may be at a disadvantage with respect to some of its competitors. 6 The marketing of minerals is affected by numerous factors, many of which are beyond the control of the Company. Such factors include the price of the mineral in the marketplace, imports of minerals from other nations, the availability of adequate refining and processing facilities, the price of fuel, electricity, labour, supplies and reagents and the market price of competitive minerals. In addition, sale prices for many commodities are determined by world market forces or are subject to rapid and significant fluctuations that may not necessarily be related to supply or demand or competitive conditions that in the past have affected such prices. Significant price movements in mineral prices over short periods of time may be affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the U.S. dollar relative to other currencies), interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. The effect of these factors on the price of minerals and, therefore, the economic viability of any of the Company's properties cannot accurately be predicted. As the Company is in the exploration stage, the above factors have had no material impact on operations or income. (H) Environmental Regulations Environmental legislation in all countries 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 properties and a heightened degree of responsibility for companies and their officers, directors and employees. All phases of the Company's operations in Brazil and Canada are subject to environmental regulations. The regulations are comprehensive and cover water quality, discharge limits, hazardous wastes, agricultural land and vegetation. (I) Mining Risks and Insurance Mineral exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Operations in which the Company has a direct or indirect interest will be subject to all type of hazards and risks or unexpected formations, cave-ins, pollution, all of which could result in work stoppages, damages to property, and possible environmental damages. The Company does not have general liability insurance covering its operations. Payment of any liabilities in excess of the Company's insurance coverage could have a materially adverse effect upon the Company's financial condition. (J) Company Operations Most exploration properties do not result in the discovery of commercial ore deposits and no assurance can be given that any particular level of recovery of precious or base metals from ore reserves will in fact be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. The Company has a direct interest in several properties. The properties have no known reserves. The Company has no history of earnings or cash flow from operations. Historically, the only source of funds available to the Company is through (i) the sale of its equity shares or (ii) borrowings. Even if the results of future exploration programs are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercial deposit exists on any of its properties. While the Company may generate additional working capital through the operation, development, sale or possible syndication of its properties, there is no assurance that any such funds will be available for operations. 7 The development of any ore deposits, if found on the Company's property, depends upon the Company's ability to obtain financing through joint venturing of properties, debt financing, equity financing or other means. There is no assurance that the Company will be able to obtain the required financing. Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in such properties, dilute its interests in the properties and/or reduce or terminate its operations. (K) Conflicts of Interest Two of the Company's Directors serve as Directors of other resource exploration companies. To the extent that such other companies may participate in ventures in which the Company may participate, the Director may have a conflict of interest in negotiating and concluding terms respecting the extent of such participation. In addition, conflicts of interest may arise from time to time, as a result of the Company engaging in transactions in which Directors and Officers of the Company may have an interest. PLEASE REFER TO "ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." (L) Currency Fluctuations The Company maintains its accounts in United States dollars. The Company's operations in Brazil and Canada make it subject to foreign currency fluctuations and such fluctuations may materially affect the Company's financial position and results. At the present time the Company does not engage in hedging activities. ITEM 2. DESCRIPTION OF PROPERTY The Companies properties are in the preliminary exploration stage and do not contain any known bodies of ore. In February 1999, the Company 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. The Company plans to conduct a bedrock-sampling program in fiscal 2006. Subsequent to year-end the company signed five option agreements covering the Nova Porto, Ouro Mil, Santa Isabel, Sao Domingos and Sao Joao mineral exploration licences located in the Municipality of Itaituba, in the Tapajos gold province of the State of Para, Brazil. Access to the property areas is by airstrips, rivers in season and the Trans Garimpeiro Highway. Regional infrastructure to the property areas is serviced from the company offices in the City of Itaituba and the field office located at the Sao Domingos property. Sao Domingos The Sao Domingos property is located approximately 250km south of the regional centre of Itaituba and approximately 40km North of Aurora's Santa Izabel property. The Sao Domingos property was a previous large alluvial operation, and the property area covers numerous areas of workings. At this stage three prominent locations within the property are the focus of current exploration named by Aurora as Atacadao, Esmeril and Fofoca. The three current target areas are 8 all located in portions of the Pararui Intrusive Suite, a granitic intrusive associated with many gold deposits within the Southern Tapajos Gold Province. The Atacadao area is an alluvial system and is the result of gold being shed from the surrounding granitic topographic highs. These hills are part of the Pararui Intrusive Suite, and locally contain well-developed mineralised stock work quartz veins. Numerous production shafts are located on the flanks of the hills, trending along a major property scale east/west fault and Aurora is confident of the potential for further mineralisation at depth. Esmeril was the centre of recent mining activity targeting the highly oxidised fraction of the porphyritic host rock. The stockwork veins, exposed by previous workers, show boxwork and fresh sulphides and generally associated with ferruginous staining of both the veins and the enclosing country rock. The Fofoca area was also the centre of a large-scale development of both the alluvials and oxidised host rocks, using the common water canon and sluice method. This area is also located on an East - West structure and further investigations are underway to test if this structure forms part of the East - West system leading from Atacadao giving a strike potential of several km. Property scale dominant structures are all generally East -West. Sao Joao The Sao Joao property area is located approximately 20km west of the Company's Sao Domingo's property and approximately 40 km north of the Santa Isabel property. The prime targets for the Sao Joao property are located around and on the intersection of regional NW and NNW faults within the Pararui Intrusive Suite and this area has been the focus of large-scale alluvial workings. The Pararui Intrusive Suite has proven to host the vast majority of gold deposits elsewhere within the Tapajos Gold Province. Previous mining activity over a number of years focused on the alluvial deposits within its many tributaries, and has now progressed to include the saprolite host rock and out cropping quartz veins. Santa Isabel The Santa Isabel Property lies in the southwestern region of the Tapajos Gold Province, Para State, Brazil and comprises an area of 12,000 hectares. The property area is accessed by a private airstrip, and seasonal boat access via a tributary of the Rio Nova, which eventually empties into the Tapajos River. The property area is located approximately 50 km south of the Sao Domingos property area. The principal property area is situated within the Pararui Intrusive Suite. To the immediate west the Pararui Suite is in faulted contact with the later Maloquinha Intrusive Suite, and the Maloquinha Intrusive suite is in faulted contact with the Creporizao Intrusive Suite, further to the west. The Pararui Suite and the Creporizao Intrusive Suite play host to the vast majority of hard rock gold deposits and occurrences within the Tapajos gold Province. The property area is dominated by a series of regional N to NNW trending regional faults, and these orientations are also noted at mine scale as seen in the mineralised quartz veins within the property area. Historically the Santa Isabel property focused mining activities on the alluvial deposits within the many tributaries, and progressed to include saprolite host rock and out cropping quartz veins. Novo Porto The Novo Porto property, as noted on the CPRM (Servico Geologico Do Brazil) 1:250,000 geology maps, as a large alluvial area, which has produced gold over an unknown period. These alluvial workings lie in a NW trending river valley formed on the faulted contact between the Pararui Intrusive Suite to the 9 west and the later Maloquinha Intrusive Suite to the west. Else where in the region the Pararui Intrusive Suite is host to many other gold deposits. In March 2006 the Company decided not to follow-up it's preliminary exploration program on the Novo Porto property and has decided not to exercise it's option to acquire the property. Ouro Mil Ouro Mil is located approximately 20 km south of Santa Isabel property area and approx 300km South of Itaituba. The Ouro Mil property is situated within a north west trending part 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 Pararui Intrusive Suite, and similarly the eastern margin is in a NW faulted contact with the Cuiu-Cuiu Complex. Previous mining at Ouro Mil property, via water canon and a sluice of surficial oxides, recovered 600kg of gold. The area is dominated by a quartz vein stock work system in weathered porphyritic granite. A moderately to well-developed laterite profile exists and is exposed in previous mining areas around the property. Piranhas The Piranhas property is located approximately 50 km NE of the company's Sao Domingos property. The property is located within the Parauari Intrusive Suite. Limited lithological inspection has shown the area to host mineralised quartz veins. The dominant North and NNW structures are thought to represent relicts of the original mineralizing event. The property is located approx 50km east of the Brazauro Resources Corporation's Tocantinzinho property. ITEM 3. LEGAL PROCEEDINGS The company is not party to any litigation, and has no knowledge of any pending or threatened litigation against it. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted to a vote of security holders through the solicitation of proxies or otherwise during the fourth quarter of the fiscal year covered by this report. PART 11 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) The Common Stock of the Company has been quoted on the NASD OTC Bulletin Board 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 Quarter Second Quarter Third Quarter Fourth Quarter -------------- --------------- -------------- --------------- ----------------------------------------------------------------------------- 2006 - High $1.98 $- $- $- ----------------------------------------------------------------------------- 2006 - Low $0.69 $- $- $- ----------------------------------------------------------------------------- 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 -----------------------------------------------------------------------------
10 The Company's stock is also quoted on the Frankfurt Exchange under the symbols "A4G.FSE," and "A4G.ETR" and on the Berlin-Bremen Exchange under the symbol "A4G.BER". (b) Holders: As of March 13, 2006, there were 763 holders of record of the Common Stock. (c) Dividends: No cash dividends were paid in 2005 or 2004. No cash dividends have been paid subsequent to December 31, 2005. The amount and frequency of cash dividends are significantly influenced by metal prices, operating results and the Company's cash requirements. (d) Securities authorized for issuance under equity compensation plan: None The Company has issued securities in the manner set forth below without registration under the Securities Act of 1933, as amended (the "Act") during the fourth quarter of 2005. During the fourth quarter of 2005, 0 common shares were issued. The Company believes that each of the above-referenced transaction was exempt from registration under the Act, pursuant to Section 4(2) of the Act and the rules and regulations promulgated thereunder as a transaction by an issuer not involving any public offering and/or Regulation S as promulgated pursuant to the Act. ITEM 6. MANAGEMENTS' DISCUSSION AND ANALYSIS OR PLAN OF OPERATION (A) General The Company is a mineral exploration company engaged in the exploration of base, precious metals and industrial minerals worldwide. The Company was incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp." The Company conducts its exploration and property acquisition activities through it's head office which is located at 30 Ledgar Road, Balcatta, Western Australia, 6021 Australia. The telephone number is (+61 8) 9240-2836. The Field office for the Company's exploration activities in Brazil is located at Estrada Do Bis, 476, Bairro, Bom Jardim, Itaituba, in the Tapajos gold province of the State of Para, Brazil. We maintain an accounting and bookkeeping office located at 238 West 4th Street, Suite 2, North Vancouver, B.C., Canada V7M 1H7. The telephone number is (604) 687-4432 and the facsimile number is (604) 687-4709. The Company had no revenues during fiscal 2005 and 2004. Funds raised in fiscal 2005 and 2004 were used for exploration of the Company's properties and general administration. (B) Results of Operations Year Ended December 31, 2005 (Fiscal 2005) versus Year Ended December 31, 2004 (Fiscal 2004) For the year ended December 31, 2005 the Company recorded a loss of $457,271 or $0.02 per share, compared to a loss of $223,763 ($0.01 per share) in 2004. Expenses - For the year ended December 31, 2005 the Company recorded expenses, other than exploration expenses, $181,932 (fiscal 2004 - $163,681). The fiscal 2005 amount includes $39,797 for property search and negotiation (fiscal 2004 - $52,563), professional fees - accounting $404 (fiscal 2004 - $9,831) and legal $60,551 (fiscal 2004 - $2,231). 11 Exploration expenditures - For the year ended December 31, 2005 the Company recorded exploration expenses of $347,307 compared to $60,082 in fiscal 2004. The following is a breakdown of the exploration expenses by property: United States, Alaska $0 (2004 - $39,113); Brazil $345,271 (2004 - $19,000) and Canada, Kumealon property $2,036 (2004 - $1,969). Depreciation expense - For the year ended December 31, 2005 the Company recorded depreciation costs of $3,258 compared to $3,666 in fiscal 2004. (C) Capital Resources and Liquidity In fiscal 2005 the Company issued 13,000,000 (fiscal 2004 - 100,000) common shares at $0.05 (fiscal 2004 - $0.25) per share for cash proceeds of $650,000 (fiscal 2004 - $22,500) and settled $162,500 (fiscal 2004 - $0) of debt with the issuance of 3,684,091 (fiscal 2004 - 0) common shares. The carrying value of the indebtedness approximated the fair value of the common shares issued. At December 31, 2005, the Company had cash of $164,189 (2004 - $1,275) and working capital of $165,052 (2004 working capital deficiency - $188,821) respectively. Total liabilities as of December 31, 2005 were $32,588 as compared to $190,296 on December 31, 2004, a decrease of $157,708. In Fiscal 2005 investing activities consisted of additions to mineral properties $0 (2004 - $0) and additions to fixed assets $0 (2004 - $2,508). For the year ended December 31, 2005 the Company recorded a loss of $457,271 ($0.02 per share), compared to a loss of $223,763 ($0.01 per share) in 2004. The general business strategy of the Company is to acquire mineral properties either directly or through the acquisition of operating entities. The Company's consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As discussed in note 1 to the consolidated financial statements, the Company has incurred recurring operating losses and requires additional funds to meet its obligations and maintain its operations. Without cash flow from operations, it may need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to implement additional exploration programs on its properties. Failure to obtain such additional financing may result in a reduction of the Company's interest in certain properties or an actual foreclosure of its interest. The Company has no agreements or understandings with any person as to such additional financing. The Company's exploration properties have not commenced commercial production and the Company has no history of earnings or cash flow from its operations. While the Company may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its property, there is no assurance that any such activity will generate funds that will be available for operations. Plans for Year 2006 During the next 12 months the Company intends to raise additional funds through equity offerings and/or debt borrowing to meet its administrative/general operating expenses and to conduct work on its exploration property. There is, of course, no assurance that it will be able to do so. The Company will concentrate its exploration activities on the Brazilian Tapajos properties and examine data relating to the potential acquisition or joint venturing of additional mineral properties in either the exploration or development stage in Brazil, Canada and other South American countries. Additional employees will be hired on a consulting basis as required by the exploration properties. The Company's exploration work program in 2006 on the Brazilian Tapajos properties will entail surface mapping of geology, sampling of soils on a grid basis to delineate geochemical anomalies, stream sediment sampling and geophysical surveying. 12 The Company is setting up a field operations center at the Sao Domingos property and intends to initially focus exploration on anomalies associated with the Sao Domingos Property. Sao Domingo was selected based on the proximity to the other company properties, and the logistics currently in place. Access to Sao Domingo is by light aircraft to a well-maintained strip, by road along the government maintained Trans Garimpeiro highway, and by boat along the multitude of waterways in the Amazon Basin. Exploration campaigns will be launched from Sao Domingo to the other properties and serviced by road and river access. Initially exploration will entail mapping the outcrop geology and spoils from shafts of previous workers in order to confirm lithologies and structural trends noted on government maps. Currently three anomalous areas have been identified, from rock chip sampling, as warranting further investigation. The Company will conduct a soil sampling program, and further rock chip sampling over the anomalous areas and has drafted the proposed grid. This work will be initiated during the second quarter of 2006 when weather conditions will be more conducive. Concurrently, the Company intends to initiate drilling on the Santa Isabel property in response to the high grade rock chip results collected from previous workings on outcropping mineralised quartz veins. Drill hole locations are currently being assessed and negotiations with drilling contractors are nearing completion. Drilling is expected to begin during mid April. The Company will also continue to evaluate the Ouro Mil and Sao Joao properties by mapping and sampling the quartz veins and structures in order to set up and orientate the soil grids. The data assembled from this work 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 claim blocks should be surrendered. The Company's exploration work program in 2006 on the British Columbia Kumealon limestone property will entail surface mapping of geology, sampling of soils on a grid basis to delineate geochemical anomalies, stream sediment sampling and geophysical surveying. The data assembled from this work will be used to determine whether: (i) further exploration and diamond core drilling is warranted and if so the sites for initial holes; or (ii) whether certain claim blocks should be surrendered. (D) Application of Critical Accounting Policies The preparation of its financial statements requires the Company to use estimates and assumptions that affect the reported amounts of assets and liabilities as well as revenues and expenses. The Company's accounting policies are described in note 2 to its consolidated financial statements. The Company's accounting policies relating to depreciation and amortization of property, plant and equipment are critical accounting policies that are subject to estimates and assumptions regarding future activities. The Company's policy regarding exploration costs is that 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 December 31, 2005 and 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 Generally accepted accounting principles require the Company to consider at the end of each accounting period whether or not there has been an impairment of the capitalized property, plant and equipment. This assessment is based on whether factors that may indicate the need for a write-down are present. If the Company determines there has been impairment, then the Company would be required to write-down the recorded value of its property, plant and equipment costs which would reduce the Company's earnings and net assets. 13 (E) Off-balance Sheet Arrangements and Contractual Obligations The Company does not have any off-balance sheet arrangements or contractual obligations that are likely to have or are reasonably likely to have a material current or future effect on the Company's financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in the Company's financial statements. (F) Market Risk Disclosures The Company has not entered into derivative contracts either to hedge existing risks or for speculative purposes.
ITEM 7. FINANCIAL STATEMENTS INDEX TO FINANCIAL STATEMENTS - December 31, 2005 Financial Statements Page -------------------- ---- Reports of Independent Registered Public Accounting Firms F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Stockholders' Equity (Deficiency) F-6 to F-9 and Comprehensive Income (Loss) Consolidated Statements of Cash Flows F-10 Notes to Consolidated Financial Statements F-11 to F-20
Financial Statement Schedules * *Financial Statement Schedules have been omitted as not applicable 14 AURORA GOLD CORPORATION (An exploration stage enterprise) Consolidated Financial Statements (EXPRESSED IN U.S. DOLLARS) December 31, 2005 and 2004 INDEX ----- Reports of Independent Registered Public Accounting Firms Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Stockholders' Equity (Deficiency) and Comprehensive Income (Loss) Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements F-1 [Graphic Omitted] PETERSON SULLIVAN PLLC ================================================================================ CERTIFIED PUBLIC ACCOUNTANTS TEL 206.382.7777 -- FAX 206.382.7700 601 UNION STREET, SUITE 2300 http://www.pscpa.com SEATTLE, WASHINGTON 98101 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ------------------------------------------------------- To the Board of Directors and Stockholders Aurora Gold Corporation We have audited the accompanying consolidated balance sheet of Aurora Gold Corporation (an exploration stage company) and Subsidiary as of December 31, 2005, and the related consolidated statements of operations, stockholders' equity (deficiency) and comprehensive income (loss), and cash flows for the year then ended, and for the period from October 10, 1995 (date of inception) to December 31, 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. 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, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aurora Gold Corporation (an exploration stage company) and Subsidiary as of December 31, 2005, and the results of their operations and their cash flows for the year then ended, and for the period from October 10, 1995 (date of inception) to December 31, 2005, in conformity with accounting principles generally accepted in the United States. F-2 The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not been able to generate significant revenues or positive cash flows from operations to date and has an accumulated deficit of $4,448,010. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding those matters are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Peterson Sullivan PLLC February 10, 2006 Seattle, Washington F-3
AURORA GOLD CORPORATION (An exploration stage enterprise) Consolidated Balance Sheets December 31, 2005 and 2004 (Expressed in U.S. Dollars) December 31 December 31 2005 2004 ======================================================================================================== ASSETS Current assets Cash $ 164,189 $ 1,275 Accounts receivable - 200 Available-for-sale securities 33,451 - - -------------------------------------------------------------------------------------------------------- Total current assets 197,640 1,475 Equipment, net 679 3,937 - -------------------------------------------------------------------------------------------------------- Total assets $ 198,319 $ 5,412 ======================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities Accounts payable and accrued expenses $ 32,588 $ 29,354 Accounts payable - related party - 121,942 Loan payable - related party - 39,000 - -------------------------------------------------------------------------------------------------------- Total current liabilities 32,588 190,296 ======================================================================================================== Stockholders' Equity (Deficiency) Common stock Authorized: 50,000,000 common shares, with par value $0.001each Issued and outstanding: 36,218,522 (December 31, 2004 - 19,534,431) common shares 36,218 19,534 Additional paid-in capital 4,582,137 3,786,321 Accumulated deficit during the exploration stage (4,448,010) (3,990,739) Accumulated other comprehensive income (loss) (4,614) - - -------------------------------------------------------------------------------------------------------- Stockholders' equity (deficiency) 165,731 (184,884) - -------------------------------------------------------------------------------------------------------- Total liabilities and stockholders' equity (deficiency) $ 198,319 $ 5,412 ========================================================================================================
The accompanying notes are an integral part of these financial statements F-4
AURORA GOLD CORPORATION (An exploration stage enterprise) Cumulative Consolidated Statements of Operations October 10 Year Year (Expressed in U.S. Dollars) 1995 (inception) Ended Ended to December 31 December 31 December 31 2005 2005 2004 =========================================================================================================================== Expenses Administrative and general $ 711,708 $ 19,642 $ 32,979 Depreciation and amortization 54,274 3,258 3,666 Imputed interest on loan payable - related party 1,560 - 1,560 Interest, bank charges and foreign exchange loss 49,477 6,370 851 Professional fees 426,752 60,955 12,062 Property search and negotiation 225,198 39,797 52,563 Salaries and consulting fees 966,007 51,910 60,000 - --------------------------------------------------------------------------------------------------------------------------- 2,434,976 181,932 163,681 Exploration expenses 1,809,763 347,307 60,082 Write-off of mineral property costs 172,981 - - - --------------------------------------------------------------------------------------------------------------------------- 4,417,720 529,239 223,763 - --------------------------------------------------------------------------------------------------------------------------- Other income (loss) Gain on disposition of subsidiary 216,474 - - Interest income 22,353 - - Gain on sale of rights to the Matupa agreement, net of expenses of $138,065 80,237 80,237 - Realized (loss) on investments (32,756) (8,269) - Operating (loss) of Spun-off operations (316,598) - - - --------------------------------------------------------------------------------------------------------------------------- (30,290) 71,968 - - --------------------------------------------------------------------------------------------------------------------------- Net (loss) for the period $ (4,448,010) $ (457,271) $ (223,763) =========================================================================================================================== Earnings (loss) per share - basic and diluted $ (0.02) $ (0.01) =========================================================================================================================== Weighted average number of common shares outstanding - basic and diluted 27,262,103 19,526,486 ===========================================================================================================================
The accompanying notes are an integral part of these financial statements F-5
AURORA GOLD CORPORATION (An exploration stage enterprise) Consolidated Statements of Stockholders' Equity (Deficiency) and Comprehensive Income (Loss) October 10, 1995 (inception) to December 31, 2005 (Expressed in U.S. dollars) ======================================================================================================================= Accumulated Common Stock Additional Compre- (deficit) during ----------------------- paid-in hensive exploration Shares Amount capital (loss) stage - ----------------------------------------------------------------------------------------------------------------------- Balance, October 10, 1995 - $ - $ - $ - $ - Issuance of common stock for - settlement of indebtedness 11,461,153 11,461 - - - Net (loss) for the period - - - - - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ - ------------ Balance December 31, 1995 11,461,153 11,461 - - - Adjustment for reverse stock split (7,640,766) (7,641) - - - Issuance of common stock for - cash at $0.001 per share 5,800,000 5,800 341,761 - - - resource property 300,000 300 2,700 - - Net (loss) for the period - - - (361,208) (361,208) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (361,208) ------------ Balance December 31, 1996 9,920,387 9,920 344,461 (361,208) Issuance of common stock for - cash in March 1997 at $1.00 per share (less issue costs of $4,842) 750,000 750 744,408 - - Net (loss) for the period - - - (615,880) (615,880) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (615,880) ------------ Balance December 31, 1997 10,670,387 10,670 1,088,869 (977,088) Issuance of common stock for - settlement of indebtedness 96,105 96 68,601 - - - cash in May 1998 at $1.25 per share 200,000 200 249,800 - - - cash in November 1998 at $0.75 per share 71,667 72 53,678 - - - cash in December 1998 at $0.75 per share 143,333 143 107,357 - - Grant of options to employees and directors - - 518,900 - - Grant of options to consultants - - 172,100 - - Net (loss) for the period - - - (1,151,604) (1,151,604) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $(1,151,604) ------------ Balance December 31, 1998 11,181,492 11,182 2,259,304 (2,128,692) Issuance of common stock for - settlement of indebtedness 231,286 231 160,151 - - - cash in March 1999 at $0.656 per share 22,871 23 14,977 - - - finder's fee in February 1999 at $0.81 per share 25,000 25 20,287 - - Grant of options to consultants - - 29,500 - - Cash advanced on stock subscriptions - - - - - Net (loss) for the period - - - (855,391) (855,391) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (855,391) ------------ F-6 Balance December 31, 1999 11,460,649 11,461 2,484,219 (2,984,083) Issuance of common stock for - settlement of indebtedness 199,000 199 99,301 - - - cash in March 2000 at $0.50 per share 350,000 350 174,650 - - - cash in March 2000 at $0.455 per share 550,000 550 249,450 - - Cancellation of shares in April 2000 (90,706) (91) (56,600) - - Exercise of options in June 2000 405,000 405 3,645 - - Spin-off of Aurora Metals (BVI) Limited - - 316,498 - - Net (loss) for the period - - - (677,705) (677,705) - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (677,705) ------------ Balance December 31, 2000 12,873,943 12,874 3,271,163 (3,661,788) Components of comprehensive income (loss) - Net income for the period - - - 128,545 128,545 - Unrealized holding losses on available-for-sale securities - - - (141,928) - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (13,383) ------------ Balance December 31, 2001 12,873,943 12,874 3,271,163 (3,533,243) Issuance of common stock for - settlement of indebtedness 3,708,038 3,708 351,492 - - Components of comprehensive income (loss) - Net (loss) for the period - - - (137,329) (137,329) - Reclassification adjustment for realized losses on available-for-sale securities - - - 141,928 - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ 4,599 ------------ Balance, December 31, 2002 16,581,981 16,582 3,622,655 (3,670,572) Issuance of common stock for - settlement of indebtedness 2,752,450 2,752 114,806 - - - cash in December 2003 at $0.25 per share 100,000 100 24,900 - - Components of comprehensive income (loss) - Net (loss) for the period - - - (96,404) (96,404) - Unrealized holding losses on available-for-sale securities - - - - - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (96,404) ------------ Balance, December 31, 2003 19,434,431 19,434 3,762,361 (3,766,976) Issuance of common stock for - cash in January 2004 at $0.25 per share, less issuance costs 100,000 100 22,400 - - Imputed interest - - 1,560 - - Components of comprehensive income (loss) - Net (loss) for the period - - - (223,763) (223,763) - Unrealized holding losses on available-for-sale securities - - - - - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (223,763) ------------ Balance, December 31, 2004 19,534,431 19,534 3,786,321 (3,990,739) Issuance of common stock for - cash in July 2005 at $0.05 per share 13,000,000 13,000 637,000 - - - settlement of indebtedness 3,684,091 3,684 158,816 - - Components of comprehensive income (loss) - Net (loss) for the period - - - (457,271) (457,271) - Unrealized holding losses on available-for-sale securities - - - (4,614) - - ----------------------------------------------------------------------------------------------------------------------- Total comprehensive (loss) $ (461,885) ------------ Balance, December 31, 2005 36,218,522 $36,218 $ 4,582,137 $ (4,448,010) ===================================================================================== ================== F-7 Accumulated Total Advances for other stockholders' Stock comprehensive equity Subscriptions income (loss) (deficiency) Balance, October 10, 1995 $ - $ - $ - Issuance of common stock for - settlement of indebtedness - 11,461 Net (loss) for the period - - - - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 1995 - - 11,461 Adjustment for reverse stock split - (7,641) Issuance of common stock for - cash at $0.001 per share - 347,561 - resource property - 3,000 Net (loss) for the period - (361,208) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 1996 - - (6,827) Issuance of common stock for - cash in March 1997 at $1.00 per share (less issue costs of $4,842) - - 745,158 Net (loss) for the period - - (615,880) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 1997 - - 122,451 Issuance of common stock for - settlement of indebtedness - - 68,697 - cash in May 1998 at $1.25 per share - - 250,000 - cash in November 1998 at $0.75 per share - - 53,750 - cash in December 1998 at $0.75 per share - - 107,500 Grant of options to employees and directors - - 518,900 Grant of options to consultants - - 172,100 Net (loss) for the period - - (1,151,604) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 1998 - - 141,794 Issuance of common stock for - settlement of indebtedness - - 160,382 - cash in March 1999 at $0.656 per share - - 15,000 - finder's fee in February 1999 at $0.81 per share - - 20,312 Grant of options to consultants 29,500 Cash advanced on stock subscriptions 425,000 425,000 Net (loss) for the period - - (855,391) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) F-8 Balance December 31, 1999 425,000 - (63,403) Issuance of common stock for - settlement of indebtedness - 99,500 - cash in March 2000 at $0.50 per share (175,000) - - - cash in March 2000 at $0.455 per share (250,000) - - Cancellation of shares in April 2000 - - (56,691) Exercise of options in June 2000 - 4,050 Spin-off of Aurora Metals (BVI) Limited - - 316,498 Net (loss) for the period - - (677,705) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 2000 - - (377,751) Components of comprehensive income (loss) - Net income for the period - - 128,545 - Unrealized holding losses on available-for-sale securities - (141,928) (141,928) - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance December 31, 2001 - (141,928) (391,134) Issuance of common stock for - settlement of indebtedness - - 355,200 Components of comprehensive income (loss) - Net (loss) for the period - - (137,329) - Reclassification adjustment for realized losses on available-for-sale securities 141,928 141,928 - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance, December 31, 2002 - (31,335) Issuance of common stock for - settlement of indebtedness - - 117,558 - cash in December 2003 at $0.25 per share - - 25,000 Components of comprehensive income (loss) - Net (loss) for the period - - (96,404) - Unrealized holding losses on available-for-sale securities - - - - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance, December 31, 2003 - - 14,819 Issuance of common stock for - cash in January 2004 at $0.25 per share, less issuance costs - - 22,500 Imputed interest - - 1,560 Components of comprehensive income (loss) - Net (loss) for the period - - (223,763) - Unrealized holding losses on available-for-sale securities - - - - ------------------------------------------------------------------------------------------------- Total comprehensive (loss) Balance, December 31, 2004 - - (184,884) Issuance of common stock for - cash in July 2005 at $0.05 per share - - 650,000 - settlement of indebtedness - - 162,500 Components of comprehensive income (loss) - Net (loss) for the period - - (457,271) - Unrealized holding losses on available-for-sale securities - (4,614) (4,614) Total comprehensive (loss) - ------------------------------------------------------------------------------------------------- Balance, December 31, 2005 $ - $ (4,614) $ 165,731 =================================================================================================
The accompanying notes are an integral part of these financial statements F-9
AURORA GOLD CORPORATION (An exploration stage enterprise) Cumulative Consolidated Statements of Cash Flows October 10 Year Year (Expressed in U.S. Dollars) 1995 (inception) Ended Ended to December 31 December 31 December 31 2005 2005 2004 =========================================================================================================================== Cash flows from (used in) operating activities Net (loss) for the period $ (4,448,010) $ (457,271) $ (223,763) Adjustments to reconcile net loss to net cash used in operating activities: - depreciation and amortization 54,274 3,258 3,666 - compensation on stock options 720,500 - - - expenses satisfied with issuance of common stock 498,800 1,500 - - expenses satisfied with transfer of marketable securities 33,903 33,903 - - imputed interest on loan payable - related party 1,560 - 1,560 - writeoff of mineral property costs 172,981 - - - adjustment for spin-off of Aurora Metals (BVI) Limited 316,498 - - - realized loss on investments 32,756 8,269 - - gain on sale of rights to Matupa agreement, net of expenses (80,237) (80,237) - Changes in assets and liabilities: - (increase) decrease in receivables (206,978) 200 1,996 - (decrease) increase in accounts payable and accrued expenses 572,745 3,292 143,497 - --------------------------------------------------------------------------------------------------------------------------- Net cash flow used in operating activities (2,331,208) (487,086) (73,044) - --------------------------------------------------------------------------------------------------------------------------- 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 2,652,339 650,000 22,500 Loan proceeds from related party 39,000 - 39,000 Loan proceeds 31,992 - - - --------------------------------------------------------------------------------------------------------------------------- Net cash flow provided by financing activities 2,723,331 650,000 61,500 - --------------------------------------------------------------------------------------------------------------------------- Increase (decrease) in cash and cash equivalents 164,189 162,914 (14,052) Cash and cash equivalents, beginning of period - 1,275 15,327 - --------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period $ 164,189 $ 164,189 $ 1,275 ===========================================================================================================================
The accompanying notes are an integral part of these financial statements F-10 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. NATURE OF BUSINESS AND GOING CONCERN Aurora Gold Corporation ("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 and has not generated any operating revenues to date. 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. 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 and include the accounts of the Company and its wholly-owned subsidiary, Aurora Gold Mineracao Ltda ("Aurora Gold Mineracao"). Collectively, they are referred to herein as "the Company". Significant inter-company accounts and transactions have been eliminated. Aurora Gold Mineracao was incorporated on October 27, 2005. (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 at December 31, 2005 and 2004. (d) Available-for-Sale Securities The Company's available-for-sale securities consist of shares of common stock of one publicly traded company and are stated at fair value. The cost of these securities is $38,065 at December 31, 2005 and the gross unrealized holding losses of $4,614 is included in accumulated other comprehensive income (loss) at December 31, 2005. Any unrealized holding gains or losses in these securities are included in the determination of accumulated other comprehensive income (loss). If a loss in value in the available-for-sale securities is considered to be other than temporary, it is recognized in the determination of net income. All unrealized holding losses at December 31, 2005 are on securities held less than 12 months. Cost is based on the specific identification method for the individual securities to determine realized gains or losses. F-11 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) 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
(f) Share-Based Payment The Company has adopted the fair value method of accounting for stock-based compensation consistent with Statement of Financial Accounting Standards No. 123 (R) (SFAS 123 (R)), Accounting for Share-based Payment. (g) Advertising Expenses The Company expenses advertising costs as incurred. The Company did not incur any advertising expenses for the years ended December 31, 2005 and 2004. (h) Foreign Currency Translations and Transactions The Company's reporting currency is the U.S. Dollar. Foreign Subsidiaries utilize the function currency applicable to the country in which they operate. The Company translates assets and liabilities of its foreign subsidiaries at the rate of exchange at the balance sheet date. Revenues and expenses are translated at the average rate of exchange throughout the year. Gains or losses from these translations, if significant, are reported as a separate component of other comprehensive income, until all or a part of the investment in the subsidiary is sold or liquidated. Translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations. (i) Concentration of Credit Risk The Company places its cash and cash equivalents with high credit quality financial institutions. The Company occasionally maintains balances in a financial institution beyond the insured amount. As of December 31, 2005, the Company has deposits in a bank beyond insured limits. As of December 31, 2004, the Company has no deposit in a bank beyond insured limits. (j) 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. The Company has not recognized any impairment losses through December 31, 2005. F-12 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (k) Fair Value of Financial Instruments and Risks 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 judgment, 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 expenses, 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. (l) 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 lives. (m) 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. (n) 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. F-13 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Earnings (Loss) Per Share Earnings (loss) per share is computed by dividing net income or loss available to common stockholders by the weighted average number of common 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 takes into consideration common shares outstanding (computed under basic earnings per share) and potentially dilutive securities and is equivalent to basic loss per share for 2005 and 2004 because there is no potentially dilutive securities. (p) 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 Consolidated Statements of Stockholders' Equity (Deficiency). Comprehensive income comprises equity except those resulting from investments by owners and distributions to owners. (q) 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. 152, Accounting for Real Estate Time-Sharing Transactions. SFAS No. 152 amends FASB Statement No. 66, Accounting for Sales of Real Estate, to reference the financial accounting and reporting guidance for real estate time-sharing transactions that is provided in AICPA Statement of Position (SOP) 04-2, Accounting for Real Estate Time-Sharing Transactions. This Statement also amends FASB Statement No. 67, Accounting for Costs and Initial Rental Operations of Real Estate Projects, to state that the guidance for (a) incidental operations and (b) costs incurred to sell real estate projects does not apply to real estate time-sharing transactions. The accounting for those operations and costs is subject to the guidance in SOP 04-2. SFAS No. 152 is effective for fiscal years beginning after June 15, 2005. The adoption of SFAS No. 152 will affect the Company's financial statements if it were to issue options. 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-14 2. SIGNIFICANT ACCOUNTING POLICIES (continued) In December 2004, the FASB issued SFAS No. 123(R), "Accounting for Share-Based Payment". 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 Company has adopted this Standard. In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections- a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS No. 154 replaces APB Opinion No. 20, Accounting Changes, and FASB Statement No. 3, Reporting Accounting Changes in Interim FinancialStatements-an amendment of APB Opinion No. 3, and changes the requirements for the accounting principle. This Statement applies to all voluntary changes in accounting principle. It also applies to changes required by an accounting pronouncement in the unusual instance that the pronouncement does not include specific transition. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of FASB No. 154 will not have a material impact on the Company's financial statements. In May 2005, the FASB issued FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations-an interpretation of FASB Statement No. 143. FASB Interpretation No. 47 clarifies that conditional asset retirement obligations describe a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may not be under the entity's control. FASB Interpretation No. 47 is effective no later than for fiscal years ending after December 15, 2005. The adoption of FASB Interpretation No. 47 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 of the Company were issued 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-lived 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 and no future obligations remain. F-15 MATO GROSSO STATE, BRAZIL - MATUPA AGREEMENT (a) On February 11, 2005, the Company signed an agreement ("Matupa Agreement") with CCO Mineracao Ltda. ("CCO") and Mineracao Bom Futuro Ltda ("Bom Futuro") 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 called 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 was 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 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 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 the Company with the RFR Exercise Notice, Neuer was 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. On May 1, 2005 the Company assigned all of its rights, title and interest in and to the Matupa Agreement to Neuer and received all consideration noted above in full. Within six months following the assignment of its rights to Neuer, Neuer paid the Company an additional US $50,000 and issued the Company an additional 150,000 common shares of Neuer resulting in total consideration received of $218,302 ($100,000 in cash and 300,000 common shares of Neuer valued at fair market value of $118,302). A net gain of $80,237 has been recorded in 2005. (c) The Company paid a finders fee of $138,065 ($100,000 in cash and 75,000 common shares of Neuer valued at fair market value of $38,065) with respect to the CCO/Aurora Gold Matupa Agreement to a private United Kingdom citizen. F-16
4. EQUIPMENT ------------------------------------------------------------------------ 2005 2004 ------------------------------------------------------------------------ Computer equipment $ 2,508 $ 2,508 Office equipment 13,583 13,583 Telecommunication equipment 1,875 1,875 ------------------------------------------------------------------------ 17,966 17,966 Accumulated depreciation (17,287) (14,029) ------------------------------------------------------------------------ $ 679 $ 3,937 ========================================================================
5. STOCK OPTIONS In 1997, the Company's Board of Director approved a stock option 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 2005 and 2004 and there are no stock options outstanding at December 31, 2005 and 2004. 6. RELATED PARTY TRANSACTIONS Related party transactions not disclosed elsewhere in these financial statements: a. During the fiscal year 2005, consulting fees of $40,410 (2004 - $60,000) were paid to directors. The transactions were recorded at the exchange amount, being the value established and agreed to by the related parties. 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. No such amount was owed at December 31, 2005. 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 in 2004 (2005 - $nil) at an interest rate of 4% per annum. No such amount was owed at December 31, 2005. F-17 7. NON-CASH INVESTING AND FINANCING ACTIVITIES In 2005, the Company issued 3,684,091 (2004 - Nil) shares of common stock of the Company for settlement of $161,000 of existing liabilities and $1,500 of consulting services incurred in 2005. In 2005, 205,000 shares of common stock of Neuer, acquired as part of the Company's assignment of the rights in the Matupa agreement, were transferred at fair market value to a former director in exchange for services performed in 2005 valued at $33,903. 8. INCOME TAXES a. The Company has net losses for tax purposes totaling approximately $3,378,000 which may be applied against future taxable income. Accordingly, there is no tax expense for the years ended December 31, 2005 and 2004. 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 2025 457,000 ---------------------------------------------- $3,378,000 ==============================================
b. The tax effects of temporary difference that give rise to the Company's deferred tax asset are as follows:
----------------------------------------------------------------------- 2005 2004 ----------------------------------------------------------------------- Tax loss carryforwards $ 1,149,000 $ 993,000 Valuation allowance (1,149,000) (993,000) ----------------------------------------------------------------------- $ - $ - =======================================================================
c. The reconciliation of income tax computed at the federal statutory rate to income tax expense is as follows:
------------------------------------------------------------------------------ 2005 2004 ------------------------------------------------------------------------------ Tax at statutory rate $(156,000) $(76,000) Change in valuation allowance for deferred tax asset 156,000 76,000 ------------------------------------------------------------------------------ Income tax expense $ - $ - ==============================================================================
F-18 9. SUBSEQUENT EVENTS (a) Subsequent to year-end the company signed five option agreements covering the Nova Porto, Ouro Mil, Santa Isabel, Sao Domingos and Sao Joao projects located in the Municipality of Itaituba, Tapajos gold province, State of Para, Brazil. The Novo Porto option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Novo Porto project mineral rights via structured cash payments. The total option agreement payments for the license are structured as follows: December 25, 2005 - USD $2,500; January 15, 2006 - USD $10,000; May 30, 2006 - USD $37,500; May 30, 2007 - USD $50,000; May 30, 2008 - USD $75,000; May 30, 2009 - USD $1,850,000 for a total of USD $2,025,000. Since the agreement was not formally executed until 2006 and the initial payment of $2,500 originally to be due December 25, 2005 was not paid until 2006, no amounts are recorded as liabilities at December 31, 2005. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Ouro Mil option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Ouro Mil project mineral rights via structured cash payments. The total option agreement payments for the license are structured as follows: January 20, 2006 - USD $30,000; June 20, 2006 - USD $70,000; June 20, 2007 USD $120,000; June 20, 2008 - USD $180,000; December 20, 2008 - USD $1,500,000 for a total of USD $1,900,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000.The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Santa Isabel option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Santa Isabel project mineral rights via structured cash payments. The total option agreement payments for the license are structured as follows: January 21, 2006 - USD $25,000; July 21, 2006 - USD $60,000; July 21, 2007 - USD $80,000; July 21, 2008 - USD $100,000; July 21, 2009 - USD $1,500,000 for a total of USD $1,765,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. The Sao Domingos option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Sao Domingos project mineral rights via structured cash payments. The total option agreement payments for the license are structured as follows: January 30, 2006 - USD $31,500; July 30, 2006 - USD $67,500; July 30, 2007 - USD $112,500; July 30, 2008 - USD $139,500; December 30, 2008 - USD $675,000 for a total of USD $1,026,000. The vendor will have a 2.0% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $500,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. F-19 9. SUBSEQUENT EVENTS (CONTINUED) The Sao Joao option agreement allows the Company to perform geological surveys and assessment work necessary to ascertain the existence of possible mineral deposits which may be economically mined and to earn a 100% interest in the Sao Joao project mineral rights via structured cash payments. The total option agreement payments for the license are structured as follows: April 12, 2006 - USD $20,000; September 12, 2006 - USD $25,000; September 12, 2007 - USD $60,000; September 12, 2008 - USD $80,000; September 12, 2009 - USD $1,250,000 for a total of USD $1,435,000. The vendor will have a 1.5% Net Smelter Royalty. The Royalty payment can be purchased at any time upon written notice to the vendor and payment in Reals (Brazilian currency) of the equivalent of USD $1,000,000. The option agreement can be terminated at any time upon written notice to the vendor and the Company will be free of any and all payment commitments yet to be due. (b) In February 2006, 8,000,000 common shares of the Company were issued at $0.50 per share for cash proceeds of $4,000,000. F-20 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There have been no disagreements with the Company's Accountants concerning accounting or financial disclosure. ITEM 8A. CONTROLS AND PROCEEDURES Within 90 days prior to the date of the Company's Annual report on Form 10-KSB, the Company completed an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that the material financial, and non-financial information, required to be disclosed on Form 10-KSB, and filed with the Securities and Exchange Commission is recorded, processed, summarized and reported in a timely manner. Based on the foregoing, the Company's management, including the President and Chief Financial Officer, have concluded that the Company's disclosure controls and procedures (as defined in Rules 240.13a-15 or 240.15d-15 of the Securities Exchange Act of 1934, as amended) are effective. There have been no significant changes in our internal controls, or in other factors, that could significantly affect these controls subsequent to the date of the evaluation hereof. No corrective actions were taken, therefore, with regard to significant deficiencies and material weaknesses. PART 111 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT The following table lists the names and positions of the executive officers and directors of the Company as of March 13, 2006 and December 31, 2005. All executive officers and directors have been elected and appointed to serve until their successors are elected and qualified. Additional information regarding the business experience, length of time served in each capacity and other matters relevant to each individual are set forth below the table. As of March 15, 2006, the directors and executive officers of the company were as follows:
Name and Address Age and Position - ---------------- ---------------- - --------------------------------------------------------------------------------------- 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); 2 - 238 West 4th Street, Secretary (April 1998 to present). North Vancouver, B.C., Canada V7M 1H7 - --------------------------------------------------------------------------------------- Antonino G. Cacace Age 59, Director since October 1995. Crud-y-Gloyat, Carswell Bay Swansea Wales, U.K. - ---------------------------------------------------------------------------------------
The following is a description of the employment history for each of our directors and officers for the last five years: 15 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). 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. 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. Antonino G. Cacace is the independent audit committee financial expert serving on the Company's audit committee. Compliance with Section 16(a) Beneficial Ownership Reporting Compliance, of the Exchange Act of 1934 Section 16 (a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who have more than ten percent of a registered class of the Company's equity securities, to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "SEC"). Officers, directors and greater than ten percent shareholders are required by the SEC regulation to furnish the Company with copies of all Section 16 (a) forms they file. Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons, the Company believes that during the fiscal year ended December 31, 2004 all filings requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with. The Company has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer and principal accounting officer. A copy of the Company's Corporate Governance Principles is incorporated by reference. ITEM 10. EXECUTIVE COMPENSATION (A) General 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: 16
- ----------------------------------------------------------------------------------------------------- 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 ($) ($) ($) ($) (#) ($) ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) - ----------------------------------------------------------------------------------------------------- Cameron Richardson 2005 2,728 -0- -0- None None None -0- President and -------------------------------------------------------------------------------- Director 2004 -0- -0- -0- None None None -0- -------------------------------------------------------------------------------- 2003 -0- -0- -0- None None None -0- - ----------------------------------------------------------------------------------------------------- Klaus Eckhof 2005 7,682 -0- -0- None None None -0- Director -------------------------------------------------------------------------------- Director 2004 -0- -0- -0- None None None -0- -------------------------------------------------------------------------------- 2003 -0- -0- -0- None None None -0- - -----------------------------------------------------------------------------------------------------
None of the Company's officers or directors was party to an employment agreement with the Company. During the fiscal year ending December 31, 2005 the entire board of directors acted as the Company's compensation committee and audit committee. (B) Options/SAR Grants Table The following table sets forth information concerning individual grants of stock options (whether or not in tandem with stock appreciation rights ("SARs")) and freestanding SARs made during the last completed fiscal year to each of the named executive officers;
--------------------------------------------------------------------------------- Option/SAR Grants in Last Fiscal Year (Individual Grants) --------------------------------------------------------------------------------- Percent Of Number of Total Options/ Securities SARs Granted Underlying To Employees Exercise Or Expiration Option/SARs In Fiscal Base Price Date Name Granted (#) Year ($/Sh) (M/D/Y) (a) (b) (c) (d) (e) --------------------------------------------------------------------------------- Cameron Richardson (1) None 0% $ 0 ----------------------- Klaus Eckhof (1) None 0% $ 0 ---------------------------------------------------------------------------------
Note 1. No options were awarded in 2005 or 2004. (C) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table The following table sets forth information concerning each exercise of stock options (or tandem SARs) and freestanding SARs during the last completed fiscal year by each of the named executive officers and the fiscal year-end value of unexercised options and SARs, on an aggregated basis: 17
---------------------------------------------------------------------------------- AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES ================================================================================== Number of Securities Value Of Underlying Unexercised Unexercised In-The-Money Shares Options/SARs Options/SARs Acquired Value At FY-End ($) At FY-End ($0.240) On Exercise Realized Exercisable/ Exercisable/ Name (#) ($) Unexercisable Unexercisable (a) (b) (c) (d) (e) ---------------------------------------------------------------------------------- Cameron Richardson None None None $ 0 ---------------------------------------------------------------------------------- Klaus Eckhof None None None $ 0 ----------------------------------------------------------------------------------
(D) Long-Term Incentive Plans ("LTIP") Awards Table The Company does not have a Long-term Incentive Plan. (E) Compensation of Directors The Company does not pay a fee to its outside, non-officer directors. The Company reimburses its directors for reasonable expenses incurred by them in attending meetings of the Board of Directors. During fiscal 2005 non-officer directors received a total of $0 in consulting fees. (F) Employment Contracts and termination of employment and change-in-control arrangements None of the Company's officers or directors was party to an employment agreement with the Company. (G) Report on reprising of options/SARs At no time during the last completed fiscal year did the Company, 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. ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS No securities were authorized for issuance under equity compensation plans. The following table sets forth certain information regarding the beneficial ownership of the Company's Common Stock as of March 13, 2006 by (i) each person who is known by the Company to own beneficially more than five percent (5%) of the Company's outstanding Common Stock; (ii) each of the Company's directors and officers; and (iii) all directors and officers of the Company as a group. As at March 13, 2006 there were 44,218,522 shares of Common Stock issued and outstanding. 18
(A) Security Ownership of Certain Beneficial Owners - ----------------------------------------------------------------------------------------------------- NAME AND ADDRESS OF AMOUNT AND PERCENTAGE OF CLASS Beneficial Owner NATURE OF ---------------- BENEFICIAL OWNER - ----------------------------------------------------------------------------------------------------- Carrington International Limited (1) 4,044,635 9.15 % Suite 2402, Bank of America Tower, 12 Harcourt Road, Hong Kong - ----------------------------------------------------------------------------------------------------- Dr Andreas Reitmeier 3,590,200 8.12 % Graben 27, A-1010, Eien, Austria - ----------------------------------------------------------------------------------------------------- Kastalia Ltd (2) 3,500,000 7.92 % Wickhams Cay 1, Road Town, Tortola, British Virgin Islands - ----------------------------------------------------------------------------------------------------- EL &A Ltd. (3) 2,296,897 5.19 % 4 D Crystal Court DB, Hong Kong - ----------------------------------------------------------------------------------------------------- Patricia Eckhof 2,245,000 5.08 % Rotwand Str 15, Muenchen, 81539 Germany - ----------------------------------------------------------------------------------------------------- Boavista Securities Ltd. (4) 2,211,488 5.00 % Avenida del Campo 10, E-28223 Madrid, Spain - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------- OFFICERS AND DIRECTORS: - ----------------------------------------------------------------------------------------------------- Klaus Eckhof (5) 3,500,000 7.92 % 30 Ledgar Road, Balcatta, Western Australia, 6021 Australia - ----------------------------------------------------------------------------------------------------- Cameron Richardson (5) 2- 238 West 4th Street, North Vancouver, British Columbia, 0 * Canada V7M 1H7 - ----------------------------------------------------------------------------------------------------- Antonino G. Cacace (5) 8,333 * Crud-y-Gloyat, Carswell Bay, Swansea Wales, U.K. - ----------------------------------------------------------------------------------------------------- Officers and Directors (3 persons) 3,508,333 7.93 % - -----------------------------------------------------------------------------------------------------
* Less than 1%. (1) Dr. Georg H Schnura, Schloss Enzesfeld, A-2551 Enzesfeld, Austria, is the 100% beneficial owner of Carrington International Ltd. (2) Alexander Kleimionov, Ul. Demiana Bednovo 17, corp. 3, ap. 10 Moscow, Russia is the 100% beneficial owner of Kastalia Ltd. (3) Dr. Markus Baerfontein, c/o Medoc Medical Services, Petersplatz 1, Vienna 1, District, 1010, Austria is the 100% beneficial owner of EL & A Ltd. (4) Maria del Carmen Becerro Morais, Avenida del Campo 10,E-28223 Madrid, Spain, is the 100% beneficial owner of Boavista Securities Ltd. (5) Officer and/or director (B) Changes in Control There were no arrangements during the last completed fiscal year or subsequent period to March 13, 2006 which would result in a change in control of the Company. 19 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The proposed business of the Company raises potential conflicts of interests between the Company and certain of its officers and directors. There have been no transactions during the last two years, or proposed transactions, to which the Company was or is a party, in which any of the directors or executive officers had or is to have a direct or indirect material interest. Certain of the directors of the Company are directors of other mineral resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company 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 the directors of the Company, 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, the Company 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 the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk to which the Company may be exposed and its financial position at that time. Other than as indicated, the Company has no other procedures or mechanisms to deal with conflicts of interest. The Company is not aware of the existence of any conflict of interest as described herein. There have been no transactions or proposed transactions with promoters during the last two years to which the Company is or was a party. ITEM 13. EXHIBITS
(A) Exhibits 3.1.1 Certificate of Incorporation* 3.1.2 Certificate of Amendment to the Certificate of Incorporation* 3.1.3 Certificate of Restoration and Renewal of Certificate of Incorporation* 3.2.1 By-laws* 3.2.2 Amended and Restated By-laws* 13.1 Form 10-QSB for the Quarter ended March 31, 2005* 13.2 Form 10-QSB for the Quarter ended June 30, 2005* 13.3 Form 10-QSB for the Quarter ended September 30, 2005* 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 Novo Porto Memorandum of Understanding from Portuguese to English.* 10.2.4 Novo Porto Option Agreement 10.2.5 Declaration of Translator for translation of Novo Porto Option Agreement from Portuguese to English. 10.2.6 Santa Clara Memorandum of Understanding.* 20 10.2.7 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.* 10.3.3 Declaration of Translator for translation of Ouro Mil Memorandum of Understanding from Portuguese to English.* 10.3.4 Ouro Mil Option Agreement 10.3.5 Declaration of Translator for translation of Ouro Mil Option Agreement from Portuguese to English 10.4.1 Assignment of Sao Domingos Memorandum of Understanding to Aurora Gold Corporation.* 10.4.2 Sao Domingos Memorandum of Understanding.* 10.4.3 Declaration of Translator for translation of Sao Domingos Memorandum of Understanding from Portuguese to English.* 10.4.4 Sao Domingos Option Agreement 10.4.5 Declaration of Translator for translation of Sao Domingos Option Agreement from Portuguese to English. 10.5.1 Santa Isabel Option Agreement 10.5.2 Declaration of Translator for translation of Santa Isabel Option Agreement from Portuguese to English. 10.6.1 Sao Joao Option Agreement 10.6.2 Declaration of Translator for translation of Sao Joao Option Agreement from Portuguese to English. 10.7.1 Piranhas Memorandum of Understanding. 10.7.2 Declaration of Translator for translation of Piranhas Memorandum of Understanding from Portuguese to English. 16.1 Letter on change in certifying accountant* 16.2 Letter on change in certifying accountant* 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 99.1 Corporate Governance Principles* - -------- * Previously Filed (B) Reports on Form 8-K 8-K filed October 14, 2005 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits 8-K filed November 9, 2005 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits 8-K filed February 7, 2006 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits 8-K filed February 8, 2006 Item 4.01 Changes in Registrant's Certifying Accountant and Item 9.01 Financial Statements and Exhibits 8-K filed February 15, 2006 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits 8-K filed February 15, 2006 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits 21 8-K filed February 28, 2006 Item 5.02 Departure of Directors or Principal Officers; Election of Directors; appointment of Principal Officers and Item 9.01 Financial Statements and Exhibits 8-K filed March 17, 2006 Item 8.01 Other Events and Item 9.01 Financial Statements and Exhibits 8-K filed March 17, 2006 Item 8.01 Other Events and Item 9.01 Financial Statements and Exhibits 8-K filed March 17, 2006 Item 8.01 Other Events and Item 9.01 Financial Statements and Exhibits 8-K filed March 23, 2006 Item 1.01 Entry into a Material Definitive Agreement and Item 9.01 Financial Statements and Exhibits
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees: The aggregate fees billed by Moore Stephens Ellis Foster Ltd. for professional services for the audit of the Company's annual financial statements, review of financial statements included in the Company's Form 10-QSB and in connection with statutory and regulatory filings or engagements during the 2005 fiscal year were $10,234 (2004 - $5,000). Audit-Related Fees: The aggregate fees billed to the Company for assurance and related services that are reasonably related to the performance of the audit or review of the Company's financial statements and are not reported under audit fees by Moore Stephens Ellis Foster Ltd. for fiscal 2005 were $0 (2004- $0). Tax fees: The aggregate fees billed to the Company for tax compliance, tax advice and tax planning by Moore Stephens Ellis Foster Ltd. for fiscal 2005 were $0 (2004 - $0). All other fees: The aggregate fees billed to the Company for products and services by Moore Stephens Ellis Foster Ltd. for fiscal 2005 were $0 (2004 - $0). The Audit Committee feels that the services rendered by Moore Stephens Ellis Foster Ltd. are compatible with maintaining the principal accountant's independence. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Aurora Gold Corporation ----------------------- Registrant Date: March 24, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof Director Date: March 24, 2006 BY: /s/ Cameron Richardson -------------- ---------------------- Cameron Richardson Director 22 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 24, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President, Chief Executive Officer and Director Date: March 24, 2006 BY: /s/ Cameron Richardson -------------- ---------------------- Cameron Richardson Chief Financial Officer and Director 23 EX-10.2.4 2 ex10_24.txt EXHIBIT 10.2.4 Exhibit 10.2.4 (Translated from Portuguese) Option Agreement By this present Agreement entered into by, on the one side, Alvaro da Silva Souza, Brazilian, single, miner prospector, bearer of ID number RG 75528/SSP-RO, and Taxpayer's Registry no. CPF 414.532.122-72, with address at Av. Dr. Hugo de Mendonca, no. 420, Caixa Postal 034 - Bairro Centro, in the city of Itaituba, PA, CEP68181-970, hereinafter referred to as LICENSEE; and on the other side, AURORA GOLD MINERACAO LTDA, a company registered with CNPJ under no. 07.763.340/0001-50, with its Office at Av. das Americas, no 700, bloco 8, lj. 215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, in this act represented by its attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered at the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753.468.697-00, hereinafter referred to as AURORA, WHEREAS: A. The LICENSEE is the titleholder of certain mineral rights in areas located in the region named Garimpo do Novo Porto, Municipality of Itaituba, state of Para, comprised of Requests for Mining Permit (PLG) and Survey Request specified as follows: BLOCK 1 according to annex A-1 and A2 of this present instrument which covers: DNPM, no. 852.875/94 to 852.906/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.908/94 to 852.912/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.914/94 to 852.918/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.920/94 to 852.924/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.926/94 to 852.929/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.931/94 to 852.934/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.936/94 to 852.942/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.944/94 to 852.948/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.957/94 to 852.961/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.963/94 to 852.967/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.969/94 to 852.973/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.975/94 to 852.979/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.981/94 to 852.985/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.987/94 to 852.991/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 852.993/94 to 853.000/94 Request for PLG of Alvaro da Silva Souza; DNPM, no. 850.567/94 Request for Survey of Alvaro da Silva Souza; B. The LICENSEE is also the owner of part of the possession of the property which covers the mineral rights referred to in item A above, and, for a better identification of its limits, a location plant of the property is attached to this present instrument as annex A-3. C. The LICENSEE has been exploring in a rudimentary and continuous manner the areas of "Garimpo Novo Porto", and is looking for an interested company with technology and resources to 1 survey, explore and make economic use of the gold mineral reserves which may eventually exist therein. D. The LICENSEE signed and celebrated a Memorandum of Understanding on 05SEP2005, hereinafter referred to as "MOU", whereby the LICENSEE allowed Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5, Muenchen, hereinafter referred to as "SUPPLY", the rights to survey and acquire the mineral rights of "Garimpo Novo Porto", against payments, calculated and due under the terms and conditions indicated and declared therein; E. AURORA received from Supply the information regarding the potential primary gold in "Garimpo Novo Porto" and believes possible the existence of primary minerals and, therefore, is interested in acquiring the pertinent mineral rights; F. Supply resolved to transfer to AURORA the rights which have been conferred upon Supply by the LICENSEE in the MOU, which the latter agrees to; Therefore, AURORA and LICENSEE agree to execute a definitive agreement whereby the conditions, amounts, deadlines and other clauses and conditions shall be established and which shall hereon be in force between the parties hereby present, and in this regard, the parties, AURORA and LICENSEE, agree to the following: I. ASSESSMENT OF GARIMPO NOVO PORTO 1. The LICENSEE, hereby and in the best form of the law, permits AURORA to execute in "Garimpo Novo Porto", for a period of 41 (forty-one) 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, consequently its interest in definitively acquiring or not the respective mineral rights and the properties in question; (the "Assessment"). 2. It shall be up to AURORA to determine the nature, scope and extension of the survey works, and thus, all costs and expenses incurred therein are of its exclusive responsibility. 3. For the purposes of assuring a good execution of the assessment, the LICENSEE: a) Grants AURORA the right to occupy any of the surface areas of "Garimpo Novo Porto" which possession he declares to have, free of claims from third parties, and AURORA is assured that in case it cannot exercise its rights due to eventual problems with above ground occupiers, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein. b) Authorizes AURORA to use the landing strip for airplanes and, if needed, to alter its outline and access roads, facilities and other improvements therein existing, and in this regard the parties shall sign a term of responsibility and/or a "loan for use". c) Shall prepare a survey of the persons involved in the mining works at "Garimpo Novo Porto" and will present to AURORA a complete report within 90 (ninety) days from AURORA's request, 2 but AURORA is assured that in case it cannot exercise its rights due to eventual problems with miners, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein. d) AURORA acknowledges that the above ground areas of "Garimpo Novo Porto" do not include the totality of the mineral rights referred to in BLOCK I, therefore, in case AURORA cannot exercise its rights due to eventual problems with ground occupiers, the actions resulting thereof are the responsibility of AURORA, although the LICENSEE shall assist in whatever possible. e) in the surface areas of "Garimpo Novo Porto" included in the mineral rights referred to in BLOCK I, the LICENSEE may not have its portions deducted under the terms of item c above, since at any time it can deliver the same areas to AURORA free and unencumbered without miners or ground occupiers. 4. The LICENSEE agrees to transfer the mineral rights in "Garimpo Novo Porto" referred to in the survey requests to AURORA GOLD MINERACAO LTDA., as soon as it is incorporated; meanwhile, the Requests for Mining Permission shall be transferred to VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered with CPF under No. 600.396.207-00, ID number RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no. 245, casa 01, RJ, CEP 22753-040, under the terms of annex B 1 and 2, and the transferee, in the condition of depository, shall be the titleholder until when these rights can be transferred to AURORA, according to clause 10, item b below, with the mineral rights to be kept in order and good condition until they can be assigned to AURORA or eventually returned to the LICENSEE, all this in the manner hereunder stipulated. In consideration for the authorization hereby granted to proceed with the Assessment of "Garimpo Novo Porto" and in terms of price, AURORA shall pay to the LICENSEE individually for the assignment of the mineral rights and rights of possession over their surface areas according to items A and B above: a) US$ 2,500.00 (two thousand five hundred dollars), by 25 DEC 05, after the signing of this instrument; b) US$ 10,000.00 (ten thousand dollars) on 15 JAN 2006, provided AURORA confirms the mineral rights have priority and are in order and duly registered without any fault or pending issue which affect them negatively; c) US$ 37,500.00 (thirty-seven thousand five hundred dollars) on 30 MAY 2006, and provided that the approval of the assignments has been published at this time for the totality of the mineral rights. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; d) US$ 50,000.00 (fifty thousand dollars) on 30 MAY 2007, and provided that the transformation of the Requests for Mining Permission into survey licenses have been published for the totality of this kind of mineral rights referred to herein. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended in 50% (fifty percent of its amount) which shall be paid within 5 (five) days upon total compliance with such stipulations; e) US$75,000.00 (seventy-five thousand dollars) on 30 MAY 2008, or in twelve months against the payment stipulated in item d above, whichever occurs last. 3 4.1 As complement to the price, AURORA shall also pay to the LICENSEE the sum of U$1,850,000.00 (one million eight hundred and fifty thousand dollars) on 30MAY2009 or in 12 (twelve) months from the payment stipulated in item "e" above, whichever occurs last, in case it wishes to opt for keeping Block1 under its name. 4.2 Amounts due, Conversion and Calculation: On the original due date of each of the portions, "4(a) to 4 (e)" , each amount shall be converted from US dollars to Reals according to the exchange rate obtained by AURORA, when changing the currency 30 (thirty) days prior to the payment, or, in its absence, to the average of the current commercial buying and selling exchange rates obtained on the last day immediately prior to the date of the referred payment, as informed in the newspaper "Gazeta Mercantil" or in its absence, in another major daily newspaper. 4.2.1 The payment of the amounts shall be made: 4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as follows, or any other which the LICENSEE may indicate to AURORA, with the amounts referring to in "4(a) to 4(e)" to be deposited in the LICENSEE's account: + Alvaro da Silva Souza - BANCO BRADESCO S/A - Branch 0759 - ITAITUBA-PA. SAVINGS ACCOUNT: 0617669-0 IN THE NAME OF "SILVANETE SILVA DE SOUSA, WITH ADDRESS AT TRAVESSA JOAO PESSOA - 650-ITAITUBA, PARA. 4.2.1.2 The above bank account may only be changed up to the 5th business day immediately prior to the date of payment. 4.2.1.3 Specially in view of the fact that AURORA is being incorporated, the payment of instalment 4(a) may be made with a remittance from overseas by Supply; 4.3 The above payments include indemnities and rentals payable to the ground occupiers of the property in which AURORA conducts its survey; in case any occupier other than the LICENSEE is found in those areas, the LICENSEE, in view of the Block in question, shall obtain for AURORA access to survey and the right to mining without onus; on the contrary, AURORA may take legal action in this regard and deduct all and any expense which it may incur from the above referred payments. II. TEMPORARY SUSPENSION 5. If for any reason beyond its control, including, but not limited to, the invasion of "Garimpo Novo Porto" by third parties and impossibility of access to same due to resistance of its proprietors and/or occupants, AURORA is obstructed from executing mineral research works therein, it shall have the right to suspend work for the period of time which the obstruction lasts. 6. Should this occur, AURORA shall immediately: (i) notify the facts to LICENSEE and (ii) adopt, if the nature of the circumstance so allow and with the cooperation of the LICENSEE, including the provisions of item 3 above, all measures within its reach to overcome such obstruction and resume work. 4 7. During the period of suspension of works, the deadlines for conclusion of the Assessment and for payment of the installments of the price referred to in clauses 4(c) to 4(e) shall be extended by a period equal to the suspension. III. COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS 8. During the geological assessment stage of the "Garimpo Novo Porto" referred to in Chapter I above, the LICENSEE may develop mining works therein, provided such mining work does not interfere with the survey activities by AURORA and there is no increase in the production fronts (volume of gold recovered) previously developed and, further: a) its object is exclusively extractable gold; gold prospecting, washing and digging. b) it is limited to open sky works; c) it is limited to a depth not exceeding 25 (twenty-five) metres of the surface quota d) does not employ more workers than those involved to date. IV. THE IMPROVEMENT OF THE MINERAL RIGHTS 9. The parties are aware that part of the mineral rights held by the LICENSEE to pursue what is stipulated in this instrument, may be converted into survey licenses, that is, they will be the object of requests for survey license, and the requests for mining permits on the "Garimpo Novo Porto" as listed in item A above may be extinct or discontinued. 10. It is the undertaking of all Parties that, jointly, they will work to obtain as soon as possible: a. The issue of environmental licences and the proper assignment of mining permits for conversion into survey licenses, issue of survey licenses, for "Garimpo Novo Porto" for the areas object of the requests still under examination by DNPM; b. The proper transformation of the requests for mining permits already assigned and those to be assigned into authorization of mineral survey according to current legislation. 11. For the purposes contained in clause 10 above, the LICENSEE shall give representation powers to AURORA and its lawyer, in the form of annex C1 and 2, before DNPM and the environmental agency of the state of Para, which commits not to object, and to facilitate regarding the transfer, conversion, assent, regarding said mineral rights, and the survey work done by and for AURORA or by and for whomever it indicates, without any onus. 12. The expenses incurred for the purposes of this Chapter IV, including, among other things, obtaining environmental licences, payment of taxes and fess, will be for AURORA's account. V. ANTECIPATED RESCISION OF THE AGREEMENT 13. AURORA shall have the right, with a notice addressed to the LICENSEE, to denounce this Agreement and consider it terminated in all or in part, if: 5 a) The Survey Requests and/or Requests for Mining Permits (PLG's) are not granted or if the conversion of said PLG's into authorization(s) are denied by DNPM; b) The DNPM refuses to approve the assignment of mineral rights in its favour as referred to in Chapter I above; c) At its exclusive discretion, the results of the geological assessment, even if partial, indicate the inexistence or insufficiency of gold reserve for economical industrial use. 13.1 Occurring either of the situations above, the agreement shall be immediately deemed rescinded, and the parties shall be free from the undertakings yet to be due, which both parties reciprocally hereby undertook, and none of the party is entitled to any indemnity or compensation of any nature by virtue of the resulting rescission. 13.2 Still in those situations, AURORA: a) shall not claim reimbursement of any amounts previously paid to the LICENSEE or spent in the course of its survey works; b) shall be dispensed from effecting any payment still to be due, c) Shall withdraw from the surface areas of "Garimpo Novo Porto", returning the mineral rights assigned in the state they were in back to the LICENSEE; d) shall, within 30 (thirty) days from the date of notice of rescission and independently of any payment, supply to the LICENSEE the technical information generated in the course of its survey works. VI. RETURN OF THE MINERAL RIGHTS 14. At any time during the assessment period, if the results of the assessment are unfavourable, and the measures referred to in Chapter I above are unsuccessful, AURORA may notify the LICENSEE personally or via AR at the address indicated, so that it receives in return the rights to the mining permits and/or survey authorizations referred to herein, indicating the place and date for the LICENSEE, or whomever it indicates, to appear and receive back the respective rights, and in case of absence, to be aware to appear in the same place within 48 hours of the date initially indicated by AURORA. 14.1 In case the LICENSEE, after 90 days from the notification, has not done so, that is, has not provided the required documentation in this regard, and presented itself at the office of AURORA for such purpose, AURORA may dispose of those rights as it deems fit, giving up or assigning to third parties. 14.2 AUORA is obliged to return the mining rights and other possessions (if these have been previously given) in perfect condition, that is, valid, to the LICENSEE, without any cost to the LICENSEE. The non-compliance with this item may subject AURORA to respond for loss and damages. And other penalties provided for in the Brazilian legislation. 6 VII. OTHER OBLIGATIONS 15. As provided for in this agreement, the LICENSEE is obliged to, besides other obligations undertaken with AURORA, a) Care for the proper handling of the survey requests and mining permits and comply adequately with all the requirements which are requested by the competent authorities regarding the assignment of Permits, obtaining survey licenses or mining resolutions; b) Execute the mining works in strict obedience to the pertinent legal and regulating norms, observing the limitations covered in Chapter III above; c) Adopt all measures within its reach to guarantee that AURORA may execute its mineral survey by avoiding or stopping the invasion of "Garimpo Novo Porto" by third parties; d) Supply to AURORA, whenever requested, geological data and information regarding "Garimpo Novo Porto", which have been obtained in the course of the mining works. 16. As provided for in this agreement, the AURORA is obliged to, besides other obligations undertaken with AURORA: a) Follow up with DNPM all processes listed in item A, from the date when the survey requests and/or assignments, and/or conversions of the mining permits into survey authorizations were submitted; b) Care for the proper handling of the requests referred to in item (a) above and comply, if necessary with the cooperation of the LICENSEE, all the requirements which are requested by the competent authorities regarding the assignment of survey authorizations; c) Effect full payment (i) of all expenses necessary to obtain the environmental licenses required for the assignment of the survey authorizations referred to in clause 10 above, and (ii) all taxes and fees necessary for the assignment of such survey authorizations; d) Execute mineral survey works in strict compliance with the legal norms and pertinent regulations; VIII. GENERAL CONDITIONS 17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement is signed in an irrevocable manner, and the LICENSEE is obliged not to alienate or promise to alienate, in any way or form, not to burden nor abandon the mineral rights object of this agreement. 18. ASSIGNMENT AND TRANSFER - The LICENSEE hereby agrees and has nothing to oppose that the rights hereby conferred to AURORA in this agreement may in part or in whole be transferred, assigned, alienated, sold to third parties at the exclusive discretion of AURORA, which may also associate with others for the compliance of this agreement, however, AURORA, in case of assignment, alienation, sale and or total transfer of the rights hereby conferred, shall include a clause in this regard, and notify the LICENSEE of its decision. 19. CONFIDENCIALITY - Except where required by law or by the regulations of the Stock Exchange, the parties shall maintain strict confidentiality of the terms and conditions of this agreement and shall not disclose to third parties, in any form, oral or written, information regarding 7 the mining works without prior consent in writing from the non-disclosing party. Each party shall demand from its representatives, employees, consultants and service providers identical confidentiality agreement. 20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under the terms of this agreement are to be made in writing and delivered personally or transmitted by AR to the addresses indicated in the preamble of this agreement on to any other place that each of the party indicates, in the form indicated in this clause and to this effect the present clause is irrevocable, without any possibility of revocation until all the obligations herein established have been complied with. 21. AMENDMENTS - Any amendment to this agreement shall be made in writing and signed by the parties hereby represented. 22. ARBITRATION - The partners elect the Main Court of the city of Belem, State of Para, to resolve any doubts deriving from this agreement which cannot be resolved amicably. IN WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of 2 (two) witnesses below, who also subscribe this instrument. Belem, December 14, 2005 (Signed) (Signed) ALVARO DA SILVA SOUZA AURORA GOLD MINERACAO LTDA. Witnesses: 1. (Signed) 2. (Signed) Name: Soraya Ferraz Name: Bruna Wandermurem de Souza Identity: 07756682-2 SSP-RJ Identity: 20.453.680.9 DIC-RJ Notary Public seal and stamp authenticating the signature of Alvaro da Silva Souza 8 POWER OF ATTORNEY Alvaro da Silva Souza, Brazilian, single, miner prospector, bearer of ID number RG 75528/SSP-RO, and Taxpayer's Registry no. CPF 414.532.122-72, appoints as his attorney, Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single; lawyer, registered with OAB-RJ under no. 80412 and registered at CPF/MF under no. 753.468.697-00, granting him powers to represent him in the condition of titleholder of certain mineral rights in the location named Garimpo do Novo Porto, Municipality of Itaituba, state of Para, comprising of Requests for Mining Permit and Survey Request specified as follows: DNPM, no. 852.875/94 to 852.906/94, 852.908/94 to 852.912/94; 852.914/94 to 852.918/94; 852.920/94 to 852.924/94; 852.926/94 to 852.929/94; 852.931/94 to 852.934/94; 852.936/94 to 852.942/94; 852.944/94 to 852.948/94; 852.957/94 to 852.961/94; 852.963/94 to 852.967/94; 852.969/94 to 852.973/94; 852.975/94 to 852.979/94; 852.981/94 to 852.985/94; 852.987/94 to 852.991/94 and 852.993/94 to 853.000/94, as well as Survey Request DNPM no. 850.567/053; with ample and general powers to: take all necessary steps to receive, transfer and assign, whether free or in payment, the Requests for Mining Permits and the Survey Requests, who may apply whatever is necessary, including request for transformations of the same requests into Mineral Research Licenses or agree with the mineral survey on the same areas, and in this regard, transfer or assign, whether free or not, as well as visit, and so practice such acts, and further in this regard, contact the National Department of Mineral Production (DNPM), the Ministry of Mines and Energy, the Brazilian Institute for Environmental and Renewable Natural Resources, SECTAM, and any other federal, state, municipal or Federal District agencies, Notary Public offices, Government Registries in general, with powers also to sub-establish this Power of Attorney which is valid until 30JUN06. Itaituba, December 14, 2005 (Signed) ALVARO DA SILVA SOUZA Notary Public seal and stamp authenticating the signature of Alvaro da Silva Souza 9 EX-10.2.5 3 ex10_25.txt EXHIBIT 10.2.5 Exhibit 10.2.5 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Option Agreement 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. 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-10.3.4 4 ex10_34.txt EXHIBIT 10.3.4 Exhibit 10.3.4 Option Agreement Celebrated between: RUY BARBOSA DE MENDON A, Brazilian, divorced, businessman, holder of ID card no. RG 0700160 SSP-DF, registered at CPF under no. 020.659.201-44, with address at Rua Bruno Juarez Correia 18a, no 680, Bairro Bella Vista, Itaituba - PA, CEP 68180-000, hereinafter referred to as 1st LICENSEE; IVAM SOUSA BARBOSA, Brazilian, single, businessman, holder of ID card no. RG 1547954 SSP/GO, registered at CPF under no. 371.158.471-34, with address at Garimpo Cripuzirao, in the municipality of Itaituba - PA, hereinafter referred to as 2nd LICENSEE; PAULO RODRIGUES PENHA, Brazilian, married, businessman, holder of ID card no. RG 2869992/SSP/PA, registered at CPF under no. 288.831.102-00, with address in the city of Belem, PA, hereinafter referred to as 3rd LICENSEE; RUTH DE LIMA FERNANDES, Brazilian, single, businesswoman, holder of ID card no. 401576/M.Aer., registered at CPF under no. 032.398.022-87, with address in the city of Belem, PA, hereinafter referred to 4th LICENSEE; all hereby represented by Ruy Barbosa de Mendon a, already qualified above; and CIDINES DA SILVA BATISTA, Brazilian, single, holder of ID card no. 33943-2 SSP-PA, registered at CPF under no. 628.603.302-59, with address at Rua Bruno Juarez Correia, 18a, no. 680, Bairro Bella Vista, in Itaituba, PA, hereinafter referred to as 5th LICENSEE; and when jointly, hereinafter referred to jointly as LICENSEES; AURORA GOLD MINERACAO LTDA, a company registered at CNPJ under no. 07.763.340/0001-50, with office in Av. das Americas, no. 700, bloco 8, lj. 215-A, parte, CEP 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, hereby represented by its attorney, Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association under no. 80412 and registered at CPF/MF under no. 753.468.697-00, hereinafter referred to as AURORA; WHEREAS: A. The LICENSEES are title holders to certain mineral rights in areas located in the location named Garimpo Ouro Mil, in the Municipality of Itaituba, State of Para, made up of Applications for Mining Permission specified as follows: BLOCK 1 according to annex A1 of this present instrument which covers: DNPM no. 851.670/92 - Request for Mining Permission of Ivam Sousa Barbosa; DNPM no. 851.671/92 - Request for Mining Permission of Ivam Sousa Barbosa; DNPM no. 851.672/92 - Request for Mining Permission of Ivam Sousa Barbosa; DNPM no. 851.673/92 - Request for Mining Permission of Ivam Sousa Barbosa; DNPM no. 851.674/92 - Request for Mining Permission of Ivam Sousa Barbosa; BLOCK 2 according to annex A2 of this present instrument which covers: DNPM no. 851.252/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.253/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.254/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.255/95 - Request for Mining Permission of Paulo Rodrigues Penha; 1 DNPM no. 851.256/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.257/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.258/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.259/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.260/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.261/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.262/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.263/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.264/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.265/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.273/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.274/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.275/95 - Request for Mining Permission of Paulo Rodrigues Penha; DNPM no. 851.276/95 - Request for Mining Permission of Paulo Rodrigues Penha; BLOCK 3 according to annex A3 of this present instrument which covers: DNPM no. 851.867/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.869/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.870/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.871/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.872/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.873/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.874/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.875/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.876/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.878/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.879/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.880/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.881/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.882/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.883/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.884/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.885/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.887/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.890/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.891/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.892/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.905/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.906/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.907/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.908/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.910/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.911/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.912/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.913/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.914/95 - Request for Mining Permission of Ruth Lima Fernandes; 2 DNPM no. 851.915/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.916/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.917/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.918/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.919/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.920/95 - Request for Mining Permission of Ruth Lima Fernandes; DNPM no. 851.921/95 - Request for Mining Permission of Ruth Lima Fernandes; BLOCK 4 according to annex A4 of this present instrument which covers: DNPM no. 850.011/06 - Application for Survey Authorization of Cidines da Silva Batista; B. The 1st LICENSEE possesses the ground areas of "Garimpo Ouro Mil" and has been exploring in a rudimentary and continuous manner the areas of "Garimpo Ouro Mil", but due to the scarcity of gold that can be mined and the apparent potential of primary resources, looked for an interested company with technology and resources to survey, explore and make economic use of the gold mineral reserves which may eventually exist therein. C. The LICENSEES signed and celebrated a Memorandum of Understanding on 18OCT2005, hereinafter referred to as "MOU", whereby the LICENSEES allowed Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5a, 80333, Muenchen, hereinafter referred to as "Supply", the rights to survey and acquire the mineral rights of "Garimpo Ouro Mil", against payments, calculated and due under the terms and conditions indicated and declared therein; D. AURORA received from Supply the information regarding the potential primary gold in "Garimpo Ouro Mil" and believes possible the existence of primary minerals and, therefore, became interested in acquiring the pertinent mineral rights; E. Supply identified that the mineral rights indicated in "C" above were not located covering "Garimpo Ouro Mil", and identified that these were recovered mineral rights referred to in "A" above, F. Supply then indicated to AURORA to receive the mineral rights which have been conferred upon Supply by the LICENSEES in the MOU, and the LICENSEES shall then substitute the pertinent mineral rights and jointly resolved to transfer them to AURORA, which the latter agrees to; Therefore, AURORA and LICENSEES agree to execute a definitive agreement, whereby the amounts, deadlines and other clauses and conditions shall be established, and which shall hereon be in force, between the parties hereby present, and in this regard, the parties, AURORA and LICENSEES, agree to the following: I. ASSESSMENT OF GARIMPO OURO MIL 1. The LICENSEES, hereby and in the best form of the law, permit AURORA to execute in "Garimpo Ouro Mil", for a period of 41 (forty-one) months as from the date of this agreement, assessment work and geological survey which it deems necessary to ascertain the existence of 3 primary deposits, which may be economically explored and, consequently, its interest in definitively acquiring or not the respective mineral rights and the properties in question; (the "Assessment"). 2. It shall be up to AURORA to determine the nature, scope and extension of the survey works, and thus, all costs and expenses incurred therein are of its exclusive responsibility. 3. For the purposes of assuring a good execution of the assessment, the LICENSEES: a) Grant to AURORA the right to occupy any of the surface areas of "Garimpo Ouro Mil", which possession they declare to have, free of claims from third parties, and AURORA is assured that in case it cannot exercise its rights due to eventual problems with surface occupants, it is hereby authorized by the LICENSEES to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; b) Authorize AURORA to use the landing strip for airplanes and, if needed, to alter its outline and access roads, facilities and other improvements therein existing, and in this regard the parties shall sign a term of responsibility and/or a "loan for use". c) Shall prepare a survey of the persons involved in the mining works at "Garimpo Ouro Mil" and shall present to AURORA a complete report within 90 (ninety) days from AURORA's request, but AURORA is assured that in case it cannot exercise its rights due to eventual problems with miners, it is hereby authorized by the LICENSEES to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein. 4. The LICENSEES agree to transfer the Request for Survey Authorization to AURORA and the Requests for Mining Permission to VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under no. 600.396.207, ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no 245, casa 01, Rio de Janeiro, RJ, CEP 22753-040, under the terms of annexes B 1, 2 and 3 and the latter, in the condition of depository, shall be the titleholder until when these rights can be transferred to AURORA, according to clause 10, item b below, with the mineral rights to be kept in order and good condition, until they can be assigned to AURORA or eventually returned to the LICENSEES, all this in the manner hereunder stipulated. In consideration of the authorization which is hereby granted in order to proceed with the assessment of "Garimpo Ouro Mil", and by way of price, AURORA shall pay the LICENSEES for the assignment of the mineral rights according to letters A and B: a) US$ 30,000.00 (thirty thousand dollars), upon signing this instrument; b) US$ 70,000.00 (seventy thousand dollars), in 6 months after the signature of this instrument, provided AURORA confirms the mineral rights have priority and are in order and duly registered without any fault or pending issue which affect them negatively; c) US$ 120,000.00 (one hundred and twenty thousand dollars) in 18 months after the signature of this instrument, and provided that the approval of the assignments has been published at this time for the totality of the mineral rights. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; 4 d) US$ 180,000.00 (one hundred and eighty thousand dollars) in 30 months after the signature of this instrument, and provided that the transformation of the Requests for Mining Permission into survey licenses have been published for the totality of this kind of mineral rights referred to herein. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; e) US$ 1,500,000.00 (one million five hundred thousand dollars) in 42 months after the signature of this instrument, or in twelve months from the payment stipulated in item d above, whichever occurs last. 4.1 In addition to the price herein established, AURORA shall pay to the LICENSEE 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 1.5% (one and half percent) of the monthly net results of the primary gold production, as defined below in item 4.1.2. 4.1.2 The participation in the mining results shall be paid by the 10th (tenth) business day of the month subsequent to the production month, and the payment shall be made through a bank deposit as stipulated by the LICENSEE. 4.1.3 For the purposes specified above, the net production result shall correspond to the value of the gross revenue AURORA obtains from the sale of the gold produced by AURORA 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 sale of the gold; and (iv) "financial compensation" as provided for in Law 7790 of December 28, 1989. 4.1.4 AURORA is entitled to the right to redeem the payment obligation on the participation in the mining results upon payment of the equivalent in local currency to US$ 1,000,000.00 (one million US dollars). 4.1.4.1 The above right conferred to AURORA may be exercised at any time, by means of a notice addressed to the LICENSEE. 4.1.4.2 If AURORA 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 4.2 below. 4.2 Amounts due, Conversion and Calculation: On the original due date of each of the portions, "4(a) to 4 (e)" , its amount shall be converted from US dollars to Reals according to the rate obtained by AURORA, when changing the currency 30 (thirty) days prior to the payment, or, in its absence, to the average of the current commercial buying and selling exchange rates obtained on the last business day immediately prior to the date of the referred payment, as informed in the newspaper "Gazeta Mercantil" or in its absence, in another major daily newspaper. 4.2.1 The payment of the amounts shall be made: 5 4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as follows, or any other which the 1st LICENSEE may indicate to AURORA, with the amounts referred to in "4(a) to 4(e)" to be deposited in the 5th LICENSEE's account: 1 Cidines da Silva Batista; BANCO BRADESCO; no. 237, Branch 759-6; CC 20517-6; 4.2.1.2 The above bank account may only be changed by the 1st LICENSEE and up to the 5th business day immediately prior to the date of payment. 4.3 The above payments include indemnities and rentals payable to the surface occupants of the property in which AURORA conducts its survey; in case any surface occupant other than the LICENSEES is found in those areas, the LICENSEES, in view of the Block in question, shall obtain for AURORA access to survey and the right to mining, without onus; otherwise, AURORA may take legal action in this regard and deduct all and any expense which it may incur from the above referred payments. 4.4 The 1st LICENSEE, 2nd LICENSEE, 3rd LICENSEE and 4th LICENSEE recognize and declare that all any sum resulting from this present Agreement shall be owed solely and exclusively to the 5th LICENSEE, in an irrevocable manner; and shall give up the right to demand from AURORA any of the portions, and the 1st LICENSEE is authorized to sign a discharge in its favour. 4.5 The 1st LICENSEE hereby declares and guarantees that the amounts it is owed by AURORA by virtue of this instrument correspond to all and any payment which it is entitled to by way of rent for the occupation of the area, indemnity for possible damages caused, or participation in the results of the mining, based on articles 11, paragraph 2, 27 and 59 of Decree law no. 227/67 (Mining Code). I. TEMPORARY SUSPENSION 5. If for any reason being its control, including, but not limited to, the invasion of "Garimpo Ouro Mil" by third parties and impossibility of access to same due to resistance of its proprietors and/or occupants, AURORA is obstructed from executing mineral research works therein, it shall have the right to suspend work for the period of time which the obstruction lasts. 6. Should this occur, AURORA shall immediately: (i) notify the facts to LICENSEES and (ii) adopt, if the nature of the circumstance so allow and with the cooperation of the LICENSEES, including the provisions of item 3 above, all measures within its reach to overcome such obstruction and resume work. 7. During the period of suspension of works, the deadlines for conclusion of the Assessment and for payment of the installments of the price referred to in clauses 4(c) to 4(e) shall be extended by a period equal to the suspension. II. COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS 8. During the geological assessment stage of the "Garimpo Ouro Mil" referred to in Chapter I above, the LICENSEES may develop mining works therein, provided such mining work does not 6 interfere with the survey activities by AURORA and there is no increase in the production fronts (volume of gold recovered) previously developed and, further: a) its object is exclusively extractable gold; gold panning, prospecting and collecting. b) it is limited to open sky works or to galleries with grinding work ramp; c) it is limited to a depth not exceeding 50 (fifty) meters of the surface quota; d) does not employ more workers than those involved to date. I. THE IMPROVEMENT OF THE MINERAL RIGHTS 9. The parties are aware that part of the mineral rights held by the LICENSEES to pursue what is stipulated in this instrument, may be converted into survey license, that is, they will be the object of requests for survey license, and the requests for mining permission on the "Garimpo Ouro Mil" as listed in item A above may be extinct or discontinued. 10. It is the undertaking of all parties that, jointly, they will work to obtain as soon as possible: a. The issue of environmental licences and the proper assignment of mining permissions for conversion into survey licenses, issue of survey licenses, for "Garimpo Ouro Mil" for the areas object of the requests still under examination by DNPM; b. The proper transformation of the requests for mining permission already assigned and those to be assigned into authorization for mineral survey, according to current legislation. 11. For the purposes contained in clause 10 above, the LICENSEES shall give representation powers to AURORA and its lawyer, in the form of annex C1, 2 and 3, before DNPM and the environmental agency of the state of Para, which commits not to object, and to facilitate regarding the transfer, conversion, assent, regarding said mineral rights, and the survey work done by and for AURORA or by and for whomever it indicates, without any onus. 12. The expenses incurred for the purposes of this Chapter IV, including, among other things, obtaining environmental licences, payment of taxes and fess, shall be for AURORA's account. I. ANTECIPATED RESCISSION OF THE AGREEMENT 13. AURORA shall have the right, with a notice addressed to the LICENSEES, to denounce this Agreement and consider it terminated in all or in part, if: a) The survey licence and the Requests for Mining Permission (PLG's) are not granted or if the conversion of said PLG's into survey authorization(s) are denied by the DNPM; b) The DNPM refuses to approve the assignment, in its favour, of the mineral rights referred to in Chapter I above; c) At its exclusive discretion, the results of the geological assessment, even if partial, indicate the inexistence or insufficiency of gold reserves for economical industrial use. 7 13.1 Occurring either of the situations above, the agreement shall be immediately deemed rescinded, and the parties shall be free from the undertakings yet to be due, which both parties reciprocally hereby undertook, and none of the party is entitled to any indemnity or compensation of any nature by virtue of the resulting rescission. 13.2 Still in those situations, AURORA: a) shall not claim reimbursement of any amounts previously paid to the LICENSEES or spent in the course of its survey works; b) shall be dispensed from effecting any payment still to be due, c) Shall withdraw from the surface areas of "Garimpo Ouro Mil", returning the mineral rights granted in the state they are back to the LICENSEES; d) Shall, within 30 (thirty) days from the date of notice of rescission and independently of any payment, supply to the LICENSEES the technical information generated in the course of its survey works. I. THE RETURN OF THE MINERAL RIGHTS 14. At any time during the assessment period, if the results of the assessment are unfavourable, and the measures referred to in Chapter I above are unsuccessful, AURORA may notify the LICENSEES for them to receive back the rights to the mining permission referred to herein. In case the LICENSEES, after 60 days from the notification, have not done so, that is, have not provided the required documentation in this regard, AURORA may dispose of those rights as it deems fit, giving them up or assigning to third parties. II. OTHER OBLIGATIONS 15. As provided for in this agreement, the LICENSEES are obliged to, besides other obligations undertaken with AURORA: a) Care for the proper handling of the Mining Permissions and comply adequately and in due time with all the requirements which are requested by the competent authorities regarding the assignment of Permissions, obtaining survey licenses and/or mining resolutions; b) Execute the mining works in strict obedience to the pertinent legal and regulating norms, observing the limitations covered in Chapter III above; c) Adopt all measures within its reach to guarantee that AURORA may execute its mineral survey by avoiding or stopping the invasion of "Garimpo Ouro Mil" by third parties; d) Supply to AURORA, whenever requested, geological data and information regarding "Garimpo Ouro Mil", which have been obtained in the course of the mining works. 16. As provided for in this agreement, AURORA is obliged to, besides other obligations undertaken with the LICENSEES: a) Follow up with the DNPM all processes listed in item A, from the date when the survey requests and/or assignments, and/or conversions of the mining permissions into survey authorizations were submitted; 8 b) Care for the proper handling of the requests referred to in item (a) above and comply, if necessary, with the cooperation of the LICENSEES, all the requirements which are requested by the competent authorities regarding the assignment of the survey authorization(s); c) Effect full payment (i) of all expenses necessary to obtain the environmental licenses required for the assignment of the survey authorization(s) referred to in clause 10 above, and (ii) all taxes and fees necessary for the assignment of such survey authorization(s); d) Executive mineral survey works in strict compliance with the pertinent legal norms; VIII. GENERAL CONDITIONS 17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement is signed in an irrevocable manner, and the LICENSEES are obliged not to alienate or promise to alienate, in any way or form, not to burden nor abandon the mineral rights object of this agreement. 18. ASSIGNMENT AND TRANSFER - The LICENSEES hereby agree and have nothing to oppose that the rights hereby conferred to AURORA in this agreement may in part or in whole be transferred, assigned, alienated, sold to third parties at the exclusive discretion of AURORA, which may also associate with others for the compliance of this agreement, however, AURORA, in case of assignment, alienation, sale and or total transfer of the rights hereby conferred, shall include a clause in this regard, and notify the LICENSEES of its decision. 19. CONFIDENTIALITY - Except if required by law or by Stock Exchange regulation, the parties shall maintain strict confidentiality of the terms and conditions of this agreement and shall not disclose to third parties, in any form, oral or written, information regarding the mining or survey works, or their results, without the prior consent in writing of the other non-disclosing party. Each party shall demand from its representatives, employees, consultants and service providers identical confidentiality agreement. 20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under the terms of this agreement are to be made in writing and delivered personally or transmitted by cable to the addresses indicated below, or to any other place that each of the party indicates, in the form indicated in this clause. For the purpose of citation or even notification, it is expressly agreed hereby that the LICENSEES may be cited and notified in reciprocal representation, considering all as attorneys of the other, and as such the present clause is an irrevocable instrument, without possibility of revocation until all the rights hereby established are extinguished. To the Licensees: Address: Rua Bruno Juarez Correa 18a., no. 680, Bairro Bela Vista, Itaituba, PA, CEP 68180-000. Contact: Ruy Barbosa de Mendonca To Aurora: Address: Av. das Americas, no. 700, bl. 8, lja. 215-A, Barra da Tijuca, Rio de Janeiro, RJ, CEP 22640-100. Contact: Luis Mauricio Azevedo 9 21. AMENDMENTS - Any amendment to this agreement shall be made in writing and signed by the parties hereby represented. 22. ARBITRATION - The partners elect the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, to resolve any doubts deriving from this agreement which can not be resolved amicably. IN WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of two witnesses who also subscribe this instrument. Belem, January 20, 2006 (Signed) RUY BARBOSA DE MENDONCA (Signed) IVAM SOUSA BARBOSA Pp Ruy Barbosa de Mendonca (Signed) PAULO RODRIGUES PENHA Pp Ruy Barbosa de Mendonca (Signed) RUTH DE LIMA FERNANDES Pp Ruy Barbosa de Mendon a (Signed) Pp CIDINES DA SILVA BATISTA (Signed) AURORA GOLD MINERACAO LTDA. Witnesses: 1) (Signed) CPF 657.415.497-30 2) (Signed) CPF 969.133.127-68 Seal and stamp of Notary Public signed in Itaituba on 25JAN06 authenticating the signature of Ruy Barbosa de Mendonca. 10 EX-10.3.5 5 ex10_35.txt EXHIBIT 10.3.5 Exhibit 10.3.5 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Option Agreement 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. 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-10.4.4 6 ex10_44.txt EXHBITY 10.4.4 Exhibit 10.4.4 OPTION AGREEMENT which is hereby entered into between ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearer of ID card RG 5116343 SSP-PA, registered at CPF/MF under no. 070.601.652-15, with address at Av. Maranhao, no 91, Municipio de Itaituba-PA, CEP 68181-140, hereinafter referred to as LICENSEE; and AURORA GOLD MINERACAO LTDA, a company registered with CNPJ under no. 07.763.340/0001-50, with its Office at Av. das Americas, no 700, bl. 8, lj. 215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, in this act represented by its attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753. 468.697-00, hereinafter referred to as AURORA; WHEREAS: A. The LICENSEE is the titleholder of certain mineral rights in areas located in the region named Garimpo Sao Domingos, Municipality of Itaituba, State of Para, comprised of Requests for Mining Permit specified as follows: BLOCK 1 according to annex A-1 of the present instrument, and includes Requests for Mining Permit DNPM no. 850.991/95, 850.992/95, 850.993/95, 850.994/95, 850.995/95, 850.996/95, 850.997/95, 850.998/95, 850.999/95, 851.000/95, 851.001/95, 851.002/95, 851.003/95, 851.004/95, 851.005/95, 851.006/95, 851.007/95, 851.008/95, 851.009/95, 851.010/95, 851.011/95, 851.012/95; B. The LICENSEE possesses the ground areas "Garimpo Sao Domingos" and has been exploring in a rudimentary and continuous manner the areas of "Garimpo Sao Domingos", but due to the scarcity of gold that can be mined and the apparent potential of primary resources, looked for an interested company with technology and resources to survey, explore and make economic use of the gold mineral reserves which may eventually exist therein. C. The LICENSEE signed and celebrated a Memorandum of Understanding on 09DEC2005, hereinafter referred to as "MOU", whereby the LICENSEE allowed Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5a, Muenchen, hereinafter referred to as "Supply", the rights to survey and acquire the mineral rights of "Garimpo Sao Domingos", against payments, calculated and due under the terms and conditions indicated and declared therein; D. AURORA received from Supply the information regarding the potential primary gold in "Garimpo Sao Domingos" and believes possible the existence of primary minerals and, therefore, is interested in acquiring the pertinent mineral rights; E. Supply then indicated to AURORA to receive the mineral rights which have been conferred upon Supply by the LICENSEE in the MOU, and the LICENSEE then 1 substituted the pertinent mineral rights and jointly resolved to transfer them to AURORA, which the latter agrees to; Therefore, AURORA and LICENSEE agree to execute a definitive agreement, whereby the amounts, deadlines and other clauses and conditions shall be established, and which shall hereon be in force, between the parties hereby present, and in this regard, the parties AURORA and LICENSEE agree to the following: I. ASSESSMENT OF GARIMPO SAO DOMINGOS 1. The LICENSEE, hereby and in the best form of the law, permits AURORA to execute in "Garimpo Sao Domingos", for a period of 41 (forty-one) 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, consequently, its interest in definitively acquiring or not the respective mineral rights and the properties in question; (the "Assessment"). 2. It shall be up to AURORA to determine the nature, scope and extension of the survey works, and thus, all costs and expenses incurred therein are of its exclusive responsibility. 3. For the purposes of assuring a good execution of the Assessment, the LICENSEE: a) Grants to AURORA the right to occupy any of the surface areas of "Garimpo Sao Domingos", which possession he declares to have, free of claims from third parties, and AURORA is assured that in case it cannot exercise its rights due to eventual problems with surface occupants, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; b) Authorizes AURORA to use the landing strip for airplanes and, if needed, to alter its outline and access roads, facilities and other improvements therein existing, and in this regard the parties shall sign a term of responsibility and/or a "loan for use". c) Shall prepare a survey of the persons involved in the mining works at "Garimpo Sao Domingos" and shall present to AURORA a complete report within 90 (ninety) days from AURORA's request, but AURORA is assured that in case it cannot exercise its rights due to eventual problems with miners, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; 4. The LICENSEE agrees to transfer the Requests for Mining Permit to VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, bearer of ID no. 1816002 IFP/RJ, and registered at CPF/MF under no. 600.396.207-00, with address at Rua Barra do Mendes, no 245, casa 1, Rio de Janeiro, RJ, CEP 22753-040, under the terms of annex B 1, and the latter, in the condition of depository, shall be the titleholder until when these rights can be transferred to AURORA, according to clause 10, item b below, with the mineral rights to be kept in order and good condition, until they can be assigned to AURORA or eventually returned to the LICENSEE, all this in the manner hereunder stipulated. In consideration for the authorization which is now being granted to proceed with the Assessment of "Garimpo Sao Domingos", and as price, AURORA shall pay the LICENSEE for the assignment of 2 the mineral rights and the rights of possession over their surface area, according to items A and B: a) US$ 31,500.00 (thirty-one thousand dollars), on 30JAN2006, upon signing this instrument; b) US$ 67,500.00 (sixty-seven thousand five hundred dollars), on 30JUL2006, provided AURORA confirms the mineral rights have priority and are in order and duly registered without any fault or pending issue which affect them negatively; c) US$ 112,500.00 (one hundred and twelve thousand and five hundred dollars) on 30JUL2007, and provided that the approval of the assignments has been published at this time for the totality of the mineral rights. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within five days upon total compliance with such stipulations; d) US$ 139,500.00 (one hundred and thirty-nine thousand and five hundred dollars) on 30JUL2008, and provided that the transformation of the Requests for Mining Permit into survey licenses have been published for the totality of this kind of mineral rights referred to herein. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within five days upon total compliance with such stipulations; e) US$ 675,000.00 (six hundred and seventy-five thousand dollars) on 30DEC2008, or in twelve months from the payment stipulated in item d above, whichever occurs last. 4.1 In addition to the price herein established, AURORA shall pay to the LICENSEE 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 4.1.2. 4.1.2 The participation in the mining results shall be paid by the 10th (tenth) business day of the month subsequent to the production month, and the payment shall be made through a bank deposit as stipulated by the LICENSEE. 4.1.3 For the purposes specified above, the production net result shall correspond to the value of the gross revenue AURORA obtains from the sale of the gold produced by AURORA 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 trading of the gold; and (iv) "financial compensation" as provided for in Law 7790 of December 28, 1989. 4.1.4 AURORA is entitled to the right to redeem the obligation for participation payment in the mining results upon payment, in local currency, of US$ 500,000.00 (five hundred thousand US dollars). 4.1.4.1 The above right conferred to AURORA may be exercised at any time, by means of 3 a notice addressed to the LICENSEE. 4.1.4.2 If AURORA 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 4.2 below. 4.2 Amounts due, Conversion and Calculation: On the original due date of each of the portions, "4(a) to 4 (e)" , its amount shall be converted from US dollars to Reals according to the exchange rate obtained by AURORA for the foreign exchange transaction occurring during the 30 (thirty) days prior to the payment, or, in its absence, to the average of the current commercial buying and selling exchange rates obtained on the last business day immediately prior to the date of the referred payment, as informed in the newspaper "Gazeta Mercantil" or in its absence, in another major daily newspaper. 4.2.1 The payment of the amounts shall be made: 4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as follows, or any other which the LICENSEE may indicate to AURORA: - - Maria Zizeuda Lima Marques, CPF 110.441.442-20, Banco Bradesco, no 237, Branch 524-0, CC (Current Account) 28477; 4.2.1.2 The above bank account may only be changed up to the 5th business day immediately prior to the date of payment. 4.3 The above payments include indemnities and rentals payable to the surface occupants of the property in which AURORA conducts its survey; in case any surface occupant other than the LICENSEE is found in those areas, the LICENSEE, in view of the Block in question, should obtain for AURORA access to survey and the right to mining, without onus; otherwise, AURORA may take legal action in this regard and deduct all and any expense which it may incur from the above referred payments. II TEMPORARY SUSPENSION 5. If for any reason beyond its control, including, but not limited to, the invasion of "Garimpo Sao Domingos" by third parties and impossibility of access to same due to resistance of its proprietors and/or occupants, AURORA is obstructed from executing mineral research works therein, it shall have the right to suspend work for the period of time which the obstruction lasts. 6. Should this occur, AURORA shall immediately: (i) notify the facts to the LICENSEE and (ii) adopt, if the nature of the circumstance so allows and with the cooperation of the LICENSEE, including the provisions of item 3 above, all measures within its reach to overcome such obstruction and resume work. 7. During the period of suspension of works, the deadlines for conclusion of the 4 Assessment and for payment of the instalments of the price referred to in clauses 4(c) to 4(e) shall be extended by a period equal to the suspension. III COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS 8. During the geological assessment stage of the "Garimpo Sao Domingos" referred to in Chapter I above, the LICENSEE may develop mining works therein, provided such mining work does not interfere with the survey activities by AURORA and there is no increase in the production fronts (volume of gold recovered) previously developed and, further: a) its object is exclusively extractable gold; gold panning, prospecting and collecting. b) it is limited to open sky works; c) it is limited to a depth not exceeding 25 (twenty-five) meters of the surface quota; d) does not employ more workers than those involved to date. THE IMPROVEMENT OF THE MINERAL RIGHTS 9. The parties are aware that part of the mineral rights held by the LICENSEE to pursue what is stipulated in this instrument, may be converted into survey license, that is, they will be the object of requests for survey license, and the requests for mining permits on the "Garimpo Sao Domingos" as listed in item A above may be extinct or discontinued. 10. It is the undertaking of all parties that, jointly, they will work to obtain as soon as possible: a) The issue of environmental licences and the proper assignment of mining permits for conversion into survey licenses, issue of survey licenses, for "Garimpo Sao Domingos" for the areas object of the requests still under examination by DNPM; b) The proper transformation of the requests for mining permits already assigned and those to be assigned into authorization of mineral survey, according to current legislation. 11. For the purposes contained in clause 10 above, the LICENSEE shall give representation powers to AURORA and its lawyer, in the form of annex C1, before the DNPM and the environmental agency of the state of Para, which commits not to object, and to facilitate regarding the transfer, conversion, assent, regarding said mineral rights, and the survey work done by and for AURORA or by and for whomever it indicates, without any onus. 12. The expenses incurred for the purposes of this Chapter IV, including, among other things, obtaining environmental licences, payment of taxes and fess, shall be for AURORA's account. V ANTECIPATED RESCISION OF THE AGREEMENT 13. AURORA shall have the right, with a notice addressed to the LICENSEE, to denounce this Agreement and consider it terminated in all or in part, if: 5 a) The Requests for Mining Permits (PLG's) are not granted or if the conversion of said PLG's into authorization(s) are denied by DNPM; b) the DNPM refuses to approve the assignment in its favour of the mineral rights referred to in Chapter I above; c) At its exclusive discretion, the results of the geological assessment, even if partial, indicate the inexistence or insufficiency of gold reserve for economical industrial use. 13.1 Occurring either of the situations above, the agreement shall be immediately deemed rescinded, and the parties shall be free from the undertakings yet to be due, which both parties reciprocally hereby undertook, and none of the party is entitled to any indemnity or compensation of any nature by virtue of the resulting rescission. 13.2 Still in those situations, AURORA: a) Shall not be entitled to the reimbursement of any amounts previously paid to the LICENSEE or spent in the survey works; b) Shall be dispensed from effecting any payment still to be due, c) Shall withdraw from the surface areas of "Garimpo Sao Domingos", returning the mineral rights granted in the state they are back to the LICENSEE; d) Shall, within 30 (thirty) days from the date of notice of rescission and independently of any payment, supply to the LICENSEE the technical information generated in the course of its survey works. VI RETURN OF THE MINERAL RIGHTS 14. At any time during the assessment period, if the results of the assessment are unfavourable, and the measures referred to in Chapter I above are unsuccessful, AURORA may notify the LICENSEE so that it receives back the rights to the mining permits referred to herein. In case the LICENSEE, after 60 days from the notification, has not done so, that is, has not provided the required documentation in this regard, AURORA may dispose of those rights as it deems fit, giving them up or assigning to third parties. VII OTHER OBLIGATIONS 15. As provided for in this agreement, the LICENSEE is obliged to, besides other obligations undertaken with AURORA, Care for the proper handling of the mining permits and comply adequately with all the requirements which are requested by the competent authorities regarding the assignment of Permits, obtaining survey licenses or mining resolutions; b) Execute the mining works in strict obedience to the pertinent legal and regulating norms, 6 observing the limitations covered in Chapter III above; c) Adopt all measures within its reach to guarantee that AURORA may execute its mineral survey by avoiding or stopping the invasion of "Garimpo Sao Domingos" by third parties; d) Supply to AURORA, whenever requested, geological data and information regarding "Garimpo Sao Domingos", which have been obtained in the course of the mining works. 16. As provided for in this agreement, AURORA is obliged to, besides other obligations undertaken with the LICENSEE: a) Follow up with DNPM all processes listed in item A, from the date when the survey requests and/or assignments, and/or conversions of the mining permits into survey authorizations were submitted; b) Care for the proper handling of the requests referred to in item (a) above and comply, if necessary, with the cooperation of the LICENSEE, all the requirements which are requested by the competent authorities regarding the assignment of survey authorizations; c) Effect full payment (i) of all expenses necessary to obtain the environmental licenses required for the assignment of the survey authorizations referred to in clause 10 above, and (ii) all taxes and fees necessary for the assignment of such survey authorizations; d) Executive mineral survey works in strict compliance with the pertinent legal norms; VIII GENERAL CONDITIONS 17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement is signed in an irrevocable manner, and the LICENSEE is obliged not to alienate or promise to alienate, in any way or form, not to burden nor abandon the mineral rights object of this agreement. 18. ASSIGNMENT AND TRANSFER - The LICENSEE hereby agrees and has nothing to oppose that the rights hereby conferred to AURORA in this agreement may in part or in whole be transferred, assigned, alienated, sold to third parties at the exclusive discretion of AURORA, which may also associate with others for the compliance of this agreement, however, AURORA, in case of assignment, alienation, sale and or total transfer of the rights hereby conferred, shall include a clause in this regard, and notify the LICENSEE of its decision. 19. CONFIDENTIALITY - Except if required by law or by Stock Exchange regulation, the parties shall maintain strict confidentiality of the terms and conditions of this agreement and shall not disclose to third parties, in any form, oral or written, information regarding the mining or survey works, or their results, without the prior consent in writing of the other non-disclosing party. Each party shall demand from its representatives, employees, consultants and service providers identical confidentiality agreement. 7 20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under the terms of this agreement are to be made in writing and delivered personally or transmitted by cable to the addresses indicated in the preamble of this agreement, or to any other place that each of the party indicates, in the form indicated in this clause, and to this effect the present clause is irrevocable, without any possibility of revocation until all the obligations herein established have been complied with. 21. AMENDMENTS - Any amendment to this agreement shall be made in writing and signed by the parties hereby represented. 22. ARBITRATION - The partners elect the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, to resolve any doubts deriving from this agreement which can not be resolved amicably. IN WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of two witnesses who also subscribe this instrument. Belem, January 26, 2006 ANTONIO BARROS DE SOUZA AURORA GOLD MINERACAO LTDA. WITNESSES: 1) 2) Name: Name: CPF: CPF: 8 Annex B 1 TO THE DIRECTOR OF THE NATIONAL DEPARTMENT OF MINERAL PRODUCTION (DNPM) Process DNPM NO: 850.991/95 851.002/95 850.992/95 851.003/95 850.993/95 851.004/95 850.994/95 851.005/95 850.995/95 851.006/95 850.996/95 851.007/95 850.997/95 851.008/95 850.998/95 851.009/95 850.999/95 851.010/95 851.000/95 851.011/95 851.001/95 851.012/95 ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearer of ID card RG 5116343 SSP-PA, registered at CPF/MF under no. 070.601.652-15, with address at Av. Maranhao, no 91, Municipality of Itaituba, PA, CEP 68181-140, hereinafter referred to as ASSIGNOR; and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under o no 600. 396.207-00, ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no 245, Casa 1, Rio de Janeiro, CEP 22753-040, hereinafter referred to as ASSIGNEE, hereby inform and request the follows On 26JAN06, the ASSIGNOR, holder of the above-mentioned mineral rights, executed with the ASSIGNEE an "Agreement of Assignment of Mineral Rights", transferring to the latter the aforesaid mineral rights, in accordance with the document submitted to this DNPM as per annex I, and as such, the parties hereby present resolve to apply for the filing and registry of the requests for assignment and registration of the transfer. We remain, Requesting your approval, Belem, January 26, 2006 ANTONIO BARROS DE SOUZA VERA LUCIA LOPES FERRAZ 9 PRIVATE AGREEMENT FOR THE ASSIGNMENT AND TRANSFER OF MINERAL RIGHTS AS FOLLOWS: ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearer of ID card RG 5116343 SSP-PA, registered at CPF/MF under no. 070.601.652-15, with address at Av. Maranhao, no 91, Municipality of Itaituba, PA, CEP 68181-140, hereinafter referred to as ASSIGNOR; and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under o no 600. 396.207-00, ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no 245, Casa 1, Rio de Janeiro, CEP 22753-040, hereinafter referred to as ASSIGNEE, WHEREAS the ASSIGNOR is the titleholder of the Requests for Mining Permits, DNPM no 850.991/95, 850.992/95, 850.993/95, 850.994/95, 850.995/95, 850.996/95, 850.997/95, 850.998/95, 850.999/95, 851.000/95, 851.001/95, 851.002/95, 851.003/95, 851.004/95, 851.005/95, 851.006/95, 851.007/95, 851.008/95, 851.009/95, 851.010/95, 851.011/95, 851.012/95; WHEREAS the above-mentioned Requests for Mining Permits, herein referred to as Mining Rights, are free and clear of any claims, liens or encumbrances; WHEREAS the ASSIGNOR wishes to assign to the ASSIGNEE the Mineral Rights, and the latter being in agreement with such transfer, the Parties agree to execute this Agreement of Assignment and Transfer of Mineral Rights, in accordance with the following clauses and conditions: 1. By this present private agreement entered into, and as prescribed by law, the ASSIGNOR assigns and transfer to the ASSIGNEE the Mineral Rights, as they are in fact assigned and transferred, in a definitive manner. 2. It is up to the ASSIGNEE to verify with the DNPM the correctness, validity and legal status of the Mineral Rights now being assigned, and it is agreed that this present instrument will automatically loose any legal effect with regard to any of the Mineral Rights which for any reason are denied or declined by the DNPM, and as such nothing shall be alleged against the ASSIGNOR, and the parties shall mutually endeavour their best efforts to obtain the registration of the assignment now being agreed upon. 3. It is the responsibility of the ASSIGNEE, independently of the registration of the Mineral Rights referred to herein, to pay all and any taxes or expenses. 4. The ASSIGNOR hereby grants the ASSIGNEE, with regard to the Mineral Rights, full representation powers with the DNPM - National Department of Mineral Production, the Ministry of Mines and Energy, the State Secretary for Environment of the State of Para, and IBAMA - the Brazilian Institute of Environment and Renewable Natural Resources, with full powers to request and apply for the registration of the assignment, provide declarations and clarifications, to sign, present or withdraw any document, to meet requirements, make payments, receive the correspondent receipts, to ratify or rectify, or to 10 compromise as well as to practice any and all acts necessary for the good compliance of the powers herein granted. 5. This present instrument is irrevocable and the signatories, their heirs or successors, are obliged to comply with the terms and conditions set forth herein, and any previous document signed between the parties with the object being the assignment and transfer of the Mineral Rights referred to herein shall be null and void. 6. 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, with the waiver of any other, prevailing over any others. IN 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. Belem, January 20, 2006 ANTONIO BARROS DE SOUZA VERA LUCIA LOPES FERRAZ 11 ANNEX C 1. POWER OF ATTORNEY ANTONIO BARROS DE SOUZA, Brazilian, married, cattle breeder, bearer of ID card RG 5116343 SSP-PA, registered at CPF/MF under no. 070.601.652-15, with address at Av. Maranhao, no 91, Municipality of Itaituba, PA, CEP 68181-140, 468.697appoints as his attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under no 80412, and registered at CPF under no 753.468.697-00, with office at Av. das Americas, 700, Bloco 8, sala 215-A, Barra da Tijuca, Rio de Janeiro, RJ, CEP 22640-100, granting him powers to represent him in the condition of titleholder of certain mineral rights in the location named Garimpo Sao Domingos, in the Municipality of Itaituba, PA, comprised of Requests for Survey Authorization DNPM no. 850. 991/95, 850. 992/95, 850. 993/95, 850. 994/95, 850.995/95, 850.996/95, 850.997/95, 850.998/95, 850.999/95, 851.000/95, 851.001/95, 851.002/95, 851.003/95, 851.004/95, 851.005/95, 851.006/95, 851.007/95, 851.008/95, 851.009/95, 851.010/95, 851.011/95, 851.012/95; with ample and general powers to: take all necessary steps to receive, transfer and assign, whether free or in payment, the Requests Survey, who may apply whatever is necessary, including request for transformations of the same requests into Mineral Research Licenses or agree with the mineral survey on the same areas, regarding transfer or assign, whether free or not, as well as visit, and so practice such acts, and further in this regard, contact the NATIONAL DEPARTMENT OF MINERAL PRODUCTION - DNPM, the Ministry of Mines and Energy, the Brazilian Institute of Environment and Renewable Natural Resources, SECTAM, and federal, state or municipal agencies, Lawyers and Notary Public offices and Government Registries in general, with powers also to sub-establish this Power of Attorney, in whole or in part, which now signs irrevocably. Itaituba, January 26, 2006 ANTONIO BARROS DE SOUZA 12 EX-10.4.5 7 ex10_45.txt EXHIBIT 10.4.5 Exhibit 10.4.5 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Option Agreement 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. 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-10.5.1 8 ex10_51.txt EXHIBIT 10.5.1 Exhibit 10.5.1 OPTION AGREEMENT which is hereby entered into between PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as LICENSEE and AURORA GOLD MINERACAO LTDA, a company registered with CNPJ under no. 07.763.340/0001-50, with its Office at Av. das Americas, no 700, bl. 8, lj. 215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, in this act represented by its attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753.468.697-00, hereinafter referred to as AURORA; WHEREAS: A. The LICENSEE is the titleholder of certain mineral rights in areas located in the region named Garimpo Santa Isabel, Municipality of Itaituba, State of Para, comprised of Requests for Mining Permit specified as follows: BLOCK 1 according to annex A-1 of the present instrument, and includes Requests for Mining Permit DNPM no. 850.624/94, 850.625/94, 850.626/94, 850.627/94, 850.628/94, 850.629/94, 850.630/94, 850.631/94, 850.632/94, 850.633/94, 850.634/94, 850.635/94, 850.636/94, 850.637/94, 850.638/94, 850.639/94, 850.640/94, 850.641/94, 850.642/94, 850.643/94, 850.644/94, 850.645/94, 850.646/94, 850.647/94, 850.648/94, 850.649/94, 850.650/94, 850.651/94, 850.652/94, 850.653/94, 850.654/94, 850.655/94, 850.656/94, 850.657/94, 850.658/94, 850.659/94, 850.660/94, 850.661/94, 850.662/94, 850.663/94, 850.664/94, 850.665/94, 850.666/94, 850.667/94, 850.668/94, 850.669/94, 850.670/94, 850.671/94, 850.672/94, 850.673/94, 850.674/94, 854.717/97, 854.718/97, 854.719/97, 854.720/97,854.721/97, 854.722/94, 854.723/97, 854.724/97, 854.725/97, 855.726/97, 854.727/97, 854.728/97, 854.729/97, 854.730/97, 854.731/97, 854.732/97, 854.733/97, 854.734/97, 854.735/97, 854.736/97, 854.737/97, 854.738/97. B. The LICENSEE is also the owner of part of the possession of the property which covers the mineral rights referred to in item A above, and, for a better identification of its limits, a location plant of the property is attached to this present instrument as annex A-3. C. The LICENSEE has been exploring in a rudimentary and continuous manner the areas of "Garimpo Santa Isabel", and is looking for an interested company with technology and resources to survey, explore and make economic use of the gold mineral reserves which may eventually exist therein. D. The LICENSEE signed and celebrated a Memorandum of Understanding on 21NOV2005, hereinafter referred to as "MOU", whereby the LICENSEE allowed Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5a, Muenchen, hereinafter referred to as "Supply", the rights to survey and acquire the mineral rights of 1 "Garimpo Santa Isabel", against payments, calculated and due under the terms and conditions indicated and declared therein; E. AURORA received from Supply the information regarding the potential primary gold in "Garimpo Santa Isabel" and believes possible the existence of primary minerals and, therefore, is interested in acquiring the pertinent mineral rights; F. Supply resolved to transfer to AURORA the rights which have been conferred upon Supply by the LICENSEE in the MOU, which the latter agrees to; Therefore, AURORA and LICENSEE agree to execute a definitive agreement, whereby the amounts, deadlines and other clauses and conditions shall be established, and which shall hereon be in force, between the parties hereby present, and in this regard, the parties AURORA and LICENSEE agree to the following: I. ASSESSMENT OF GARIMPO SANTA ISABEL 1. The LICENSEE, hereby and in the best form of the law, permits AURORA to execute in "Garimpo Santa Isabel", 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, consequently, its interest in definitively acquiring or not the respective mineral rights and the properties in question; (the "Assessment"). 2. It shall be up to AURORA to determine the nature, scope and extension of the survey works, and thus, all costs and expenses incurred therein are of its exclusive responsibility. 3. For the purposes of assuring a good execution of the Assessment, the LICENSEE: a) Grants to AURORA the right to occupy any of the surface areas of "Garimpo Santa Isabel", which possession he declares to have, free of claims from third parties, and AURORA is assured that in case it cannot exercise its rights due to eventual problems with surface occupants, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; b) Authorizes AURORA to use the landing strip for airplanes and, if needed, to alter its outline and access roads, facilities and other improvements therein existing, and in this regard the parties shall sign a term of responsibility and/or a "loan for use". c) Shall prepare a survey of the persons involved in the mining works at "Garimpo Santa Isabel" and shall present to AURORA a complete report within 90 (ninety) days from AURORA's request, but AURORA is assured that in case it cannot exercise its rights due to eventual problems with miners, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein. d) AURORA acknowledges that the surface areas of "Garimpo Santa Isabel" do not include the totality of the mineral rights referred to in BLOCK 1, therefore, in case AURORA cannot exercise its rights due to eventual problems with surface occupants, the actions 2 resulting thereof are the responsibility of AURORA, although the LICENSEE shall assist in whatever possible. 4. The LICENSEE agrees, at the discretion of AURORA, to: a) transfer the mineral rights of "Garimpo Santa Isabel" represented by Requests for Mining Permit to VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, bearer of ID no. 1816002 IFP/RJ, and registered at CPF/MF under no. 600.396.207-00, with address at Rua Barra do Mendes, no 245, casa 1, Rio de Janeiro, RJ, CEP 22753-040, under the terms of annex B 1, and the latter in the condition of depository, shall be the titleholder until when these rights can be transferred to AURORA, according to clause 10, item b below, with the mineral rights to be kept in order and good condition, until they can be assigned to AURORA or eventually returned to the LICENSEE, all this in the manner hereunder stipulated; or b) that on the mineral rights of "Garimpo Santa Isabel" represented by Requests for Mining Permit, requests for mineral survey be requested in favour of the LICENSEE and these be transferred to AURORA, all this in the manner hereunder stipulated. 4.1 In consideration for the authorization which is now being granted to proceed with the Assessment of "Garimpo Santa Isabel", and as price, AURORA shall pay the LICENSEE for the assignment of the mineral rights and the rights of possession over their surface area, according to items A and B: a) US$ 25,000.00 (twenty-five thousand dollars), on 21JAN2006, upon signing instrument; b) US$ 60,000.00 (sixty thousand dollars), on 21JUL2006, provided AURORA confirms the mineral rights have priority and are in order and duly registered without any fault or pending issue which affect them negatively; c) US$ 80,000.00 (Eighty thousand dollars), on 21JUL2007, and provided that the approval of the assignments has been published at this time for the totality of the mineral rights. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; d) US$ 100,000.00 (one hundred thousand dollars), on 21JUL2008, and provided that the transformation of the Requests for Mining Permit into survey licenses has been published for the totality of this kind of mineral rights referred to herein. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; e) U$ 1,500,000.00 (one million five hundred thousand dollars), on 21JUL2009, or in twelve months from the payment stipulated in item d above, whichever occurs last. 4.1.1 In addition to the price herein established, AURORA shall pay to the LICENSEE 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 1.5% (one and half percent) of the monthly net results of the primary gold production, as defined below in item 4.1.2. 4.1.2 The participation in the mining results shall be paid by the 10th (tenth) business day 3 of the month subsequent to the production month, and the payment shall be made through a bank deposit as stipulated by the LICENSEE. 4.1.3 For the purposes specified above, the production net result shall correspond to the value of the gross revenue AURORA obtains from the sale of the gold produced by AURORA 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 trading of the gold; and (iv) "financial compensation" as provided for in Law 7790 of December 28, 1989. 4.1.4 AURORA is entitled to the right to redeem the obligation for participation payment in the mining results upon payment, in local currency, of US$ 1,000,000.00 (one million US dollars). 4.1.4.1 The above right conferred to AURORA may be exercised at any time, by means of a notice addressed to the LICENSEE. 4.1.4.2 If AURORA 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 4.2 below. 4.2 Amounts due, Conversion and Calculation: On the original due date of each of the portions, "4(a) to 4 (e)", its amount shall be converted from US dollars to Reals according to the exchange rate obtained by AURORA when effecting the foreign exchange transaction during the 30 (thirty) days prior to the payment, or, in its absence, to the average of the current commercial buying and selling exchange rates obtained on the last business day immediately prior to the date of the referred payment, as informed in the newspaper "Gazeta Mercantil" or in its absence, in another major daily newspaper. 4.2.1 The payment of the amounts shall be made: 4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as follows, or any other which the LICENSEE may indicate to AURORA, with the amounts referring to in "4(a) to 4(e) to be deposited in the LICENSEE's account: - - Paulo Alves da Silva - BANCO BRADESCO no. 237, Branch 0759-5 CC (Current Account) 018333-4; 4.2.1.2 The above bank account may only be changed up to the 5th business day immediately prior to the date of payment. 4.3 The above payments include indemnities and rentals payable to the surface occupants of the property in which AURORA conducts its survey; in case any surface occupant other than the LICENSEE is found in those areas, the LICENSEE, in view of the Block in question, should obtain for AURORA access to survey and the right to mining, without onus; otherwise, AURORA may take legal action in this regard and deduct all and any expense which it may incur from the above referred payments. 4 II TEMPORARY SUSPENSION 5. If for any reason beyond its control, including, but not limited to, the invasion of "Garimpo Santa Isabel" by third parties and impossibility of access to same due to resistance of its proprietors and/or occupants, AURORA is obstructed from executing mineral research works therein, it shall have the right to suspend work for the period of time which the obstruction lasts. 6. Should this occur, AURORA shall immediately: (i) notify the facts to the LICENSEE and (ii) adopt, if the nature of the circumstance so allows and with the cooperation of the LICENSEE, including the provisions of item 3 above, all measures within its reach to overcome such obstruction and resume work. 7. During the period of suspension of works, the deadlines for conclusion of the Assessment and for payment of the instalments of the price referred to in clauses 4(c) to 4(e) shall be extended by a period equal to the suspension. III COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS 8. During the geological assessment stage of the "Garimpo Santa Isabel" referred to in Chapter I above, the LICENSEE may develop mining works therein, provided such mining work does not interfere with the survey activities by AURORA and there is no increase in the production fronts (volume of gold recovered) previously developed and, further: a) its object is exclusively extractable gold; gold panning, prospecting and collecting. b) it is limited to open sky works; c) it is limited to a depth not exceeding 25 (twenty-five) meters of the surface quota; d) does not employ more workers than those involved to date. IV. THE IMPROVEMENT OF THE MINERAL RIGHTS 9. The parties are aware that part of the mineral rights held by the LICENSEE to pursue what is stipulated in this instrument, may be converted into survey license, that is, they will be the object of requests for survey license, and the requests for mining permits on the "Garimpo Santa Isabel" as listed in item A above may be extinct or discontinued. 10. It is the undertaking of all parties that, jointly, they will work to obtain as soon as possible: a) The issue of environmental licenses and the proper assignment of mining permits for conversion into survey licenses, issue of survey licenses, for "Garimpo Santa Isabel" for the areas object of the requests still under examination by DNPM; b) The proper transformation of the requests for mining permits already assigned and those to be assigned into authorization of mineral survey, according to current legislation. 5 11. For the purposes contained in clause 10 above, the LICENSEE shall give representation powers to AURORA and its lawyer, in the form of annex C1, before DNPM and the environmental agency of the state of Para, which commits not to object, and to facilitate regarding the transfer, conversion, assent, regarding said mineral rights, and the survey work done by and for AURORA or by and for whomever it indicates, without any onus. 12. The expenses incurred for the purposes of this Chapter IV, including, among other things, obtaining environmental licences, payment of taxes and fess, shall be for AURORA's account. V ANTECIPATED RESCISION OF THE AGREEMENT 13. AURORA shall have the right, with a notice addressed to the LICENSEE, to denounce this Agreement and consider it terminated in all or in part, if: a) The Requests for Mining Permits (PLG's) are not granted or if the conversion of said PLG's into authorization(s) are denied by DNPM; b) the DNPM refuses to approve the assignment in its favour of the mineral rights referred to in Chapter I above; c) At its exclusive discretion, the results of the geological assessment, even if partial, indicate the inexistence or insufficiency of gold reserve for economical industrial use. 13.1 Occurring either of the situations above, the agreement shall be immediately deemed rescinded, and the parties shall be free from the undertakings yet to be due, which both parties reciprocally hereby undertook, and none of the party is entitled to any indemnity or compensation of any nature by virtue of the resulting rescission. 13.2 Still in those situations, AURORA: a) Shall not be entitled to the reimbursement of any amounts previously paid to the LICENSEE or spent in the survey works; b) Shall be dispensed from effecting any payment still to be due, c) Shall withdraw from the surface areas of "Garimpo Santa Isabel", returning the mineral rights granted in the state they are back to the LICENSEE; d) Shall, within 30 (thirty) days from the date of notice of rescission and independently of any payment, supply to the LICENSEE the technical information generated in the course of its survey works. VI RETURN OF THE MINERAL RIGHTS 14. At any time during the assessment period, if the results of the assessment are unfavourable, and the measures referred to in Chapter I above are unsuccessful, AURORA may notify the LICENSEE so that it receives in return the rights to the mining permits referred to herein. In case the LICENSEE, after 60 days from the notification, has not done so, that is, has not provided the required documentation in this regard, AURORA may dispose of those rights as it deems fit, giving them up or assigning to third parties. 6 VII OTHER OBLIGATIONS 15. As provided for in this agreement, the LICENSEE is obliged to, besides other obligations undertaken with AURORA, a) Care for the proper handling of the survey requests and mining permits and comply adequately with all the requirements which are requested by the competent authorities regarding the assignment of Permits, obtaining survey licenses or mining resolutions; b) Execute the mining works in strict obedience to the pertinent legal and regulating norms, observing the limitations covered in Chapter III above; c) Adopt all measures within its reach to guarantee that AURORA may execute its mineral survey by avoiding or stopping the invasion of "Garimpo Santa Isabel" by third parties; d) Supply to AURORA, whenever requested, geological data and information regarding "Garimpo Santa Isabel", which have been obtained in the course of the mining works. 16. As provided for in this agreement, AURORA is obliged to, besides other obligations undertaken with the LICENSEE: a) Follow up with DNPM all processes listed in item A, from the date when the survey requests and/or assignments, and/or conversions of the mining permits into survey authorizations were submitted; b) Care for the proper handling of the requests referred to in item (a) above and comply, if necessary, with the cooperation of the LICENSEE, all the requirements which are requested by the competent authorities regarding the assignment of survey authorizations; c) Effect full payment (i) of all expenses necessary to obtain the environmental licenses required for the assignment of the survey authorizations referred to in clause 10 above, and (ii) all taxes and fees necessary for the assignment of such survey authorizations; d) Executive mineral survey works in strict compliance with the pertinent legal norms; VIII GENERAL CONDITIONS 17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement is signed in an irrevocable manner, and the LICENSEE is obliged not to alienate or promise to alienate, in any way or form, not to burden nor abandon the mineral rights object of this agreement. 18. ASSIGNMENT AND TRANSFER - The LICENSEE hereby agrees and has nothing to oppose that the rights hereby conferred to AURORA in this agreement may in part or in whole be transferred, assigned, alienated, sold to third parties at the exclusive discretion of AURORA, which may also associate with others for the compliance of this agreement, however, AURORA, in case of assignment, alienation, sale and or total transfer of the rights hereby conferred, shall include a clause in this regard, and notify the LICENSEE of its decision. 19. CONFIDENTIALITY - Except if required by law or by Stock Exchange regulation, the parties shall maintain strict confidentiality of the terms and conditions of this agreement and shall not disclose to third parties, in any form, oral or written, information regarding the 7 mining or survey works, or their results, without the prior consent in writing of the other non-disclosing party. Each party shall demand from its representatives, employees, consultants and service providers identical confidentiality agreement. 20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under the terms of this agreement are to be made in writing and delivered personally or transmitted by cable to the addresses indicated in the preamble of this agreement, or to any other place that each of the party indicates, in the form indicated in this clause, and to this effect the present clause is irrevocable, without any possibility of revocation until all the obligations herein established have been complied with. 21. AMENDMENTS - Any amendment to this agreement shall be made in writing and signed by the parties hereby represented. 22. ARBITRATION - The partners elect the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, to resolve any doubts deriving from this agreement which can not be resolved amicably. IN WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of two witnesses who also subscribe this instrument. Belem, January 20, 2006 (Signed) (Signed) PAULO ALVES DA SILVA AURORA GOLD MINERACAO LTDA. WITNESSES: 1) 2) Name: Name: Identity Card No.: Identity Card No.: Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 8 Annex B 1 TO THE DIRECTOR OF THE NATIONAL DEPARTMENT OF MINERAL PRODUCTION (DNPM) 850.624/94 850.642/94 850.660/94 854.720/97 850.625/94 850.643/94 850.661/94 854.721/97 850.626/94 850.644/94 850.662/94 854.722/97 850.627/94 850.645/94 850.663/94 854.723/97 850.628/94 850.646/94 850.664/94 854.724/97 850.629/94 850.647/94 850.665/94 854.725/97 850.630/94 850.648/94 850.666/94 854.726/97 850.631/94 850.649/94 850.667/94 854.727/97 850.632/94 850.650/94 850.668/94 854.728/97 850.633/94 850.651/94 850.669/94 854.729/97 850.634/94 850.652/94 650.670/94 854.730/97 850.635/94 850.653/94 850.671/94 854.731/97 850.636/94 850.654/94 850.672/94 854.732/97 850.637/94 850.655/94 850.673/94 854.733/97 850.638/94 850.656/94 850.674/94 854.734/97 850.639/94 850.657/94 854.717/97 854.735/97 850.640/94 850.658/94 854.718/97 854.736/97 850.641/94 850.659/94 854.719/97 854.737/97 854.738/97 PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as ASSIGNOR and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under no. 600.396.207-00, with ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no. 245, casa 01, RJ, CEP 22753-040, hereinafter referred to as ASSIGNEE, hereby inform and request the following On 20JAN06, the ASSIGNOR, applicant of the above-mentioned mineral rights, executed with the ASSIGNEE an "Agreement of Assignment of Mineral Rights", transferring to the latter the aforesaid mineral rights, in accordance with the document submitted to this DNPM as per annex I, and as such, the parties hereby present resolve to apply for the filing and registry of the requests for assignment and registration of the transfer. We remain, Requesting your approval, Belem, January 20, 2006 (Signed) PAULO ALVES DA SILVA VERA LUCIA LOPES FERRAZ Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 9 PRIVATE AGREEMENT FOR THE ASSIGNMENT AND TRANSFER OF MINERAL RIGHTS AS FOLLOWS: PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as ASSIGNOR and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under no. 600.396.207-00 and ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no. 245, casa 01, RJ, CEP 22753-040, hereinafter referred to as ASSIGNEE WHEREAS the ASSIGNOR is the titleholder of the REQUEST FOR MINING PERMITS, DNMP no. 850624/94, 850.625/94, 850.626/94, 850.627/94, 850.628/94, 850.629/94, 850.630/94, 850.631/94, 850.632/94, 850.633/94, 850.634/94, 850.635/94, 850.636/94, 850.637/94, 850.638/94, 850.639/94, 850.640/94, 850.641/94, 850.642/94, 850.643/94, 850.644/94, 850.645/94, 850.646/94, 850.647/94, 850.648/94, 850.649/94, 850.650/94, 850.651/94, 850.652/94, 850.653/94, 850.654/94, 850.655/94, 850.656/94, 850.657/94, 850.658/94, 850.659/94, 850.660/94, 850.661/94, 850.662/94, 850.663/94, 850.664/94, 850.665/94, 850.666/94, 850.667/94, 850.668/94, 850.669/94, 850.670/94, 850.671/94, 850.672/94, 850.673/94, 850.674/94, 854.717/97, 854.718/97, 854.719/97, 854.720/97, 854.721/97, 854.722/97, 854.723/97, 854.724/97, 854.725/97, 854.726/97, 854.727/97, 854.728/97, 854.729/97, 854.730/97, 854.731/97, 854.732/97, 854.733/97, 854.734/97, 854.735/97, 854.736/97, 854.737/97, 854.738/97. WHEREAS the above-mentioned Requests for Mining Permits, herein referred to as Mining Rights, are free and clear of any claims, liens or encumbrances; WHEREAS the ASSIGNOR wishes to assign to the ASSIGNEE the Mineral Rights, and the latter being in agreement with such transfer, the Parties agree to execute this Agreement of Assignment and Transfer of Mineral Rights, in accordance with the following clauses and conditions: 1. By this present private agreement entered into, and as prescribed by law, the ASSIGNOR assigns and transfer to the ASSIGNEE the Mineral Rights, as they are in fact assigned and transferred, in a definitive manner. 2. It is up to the ASSIGNEE to verify with the DNPM the correctness, validity and legal status of the Mineral Rights now being assigned, and it is agreed that this present instrument will automatically loose any legal effect with regard to any of the Mineral Rights which for any reason are denied or declined by the DNPM, and as such nothing shall be alleged against the ASSIGNOR, and the parties shall mutually endeavour their best efforts to obtain the registration of the assignment now being agreed upon. 3. It is the responsibility of the ASSIGNEE, independently of the registration of the Mineral Rights referred to herein, to pay all and any taxes or expenses. 10 4. The ASSIGNOR hereby grants the ASSIGNEE, with regard to the Mineral Rights, full representation powers with the DNPM - National Department of Mineral Production, the Ministry of Mines and Energy, the State Secretary for Environment of the State of Para, and IBAMA - the Brazilian Institute of Environmental and Renewable Natural Resources, with full powers to request and apply for the registration of the assignment, provide declarations and clarifications, to sign, present or withdraw any document, to meet requirements, make payments, receive the correspondent receipts, to ratify or rectify, or to compromise as well as to practice any and all acts necessary for the good compliance of the powers herein granted. 5. This present instrument is irrevocable and the signatories, their heirs or successors, are obliged to comply with the terms and conditions set forth herein, and any previous document signed between the parties with the object being the assignment and transfer of the Mineral Rights referred to herein shall be null and void. 6. 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, with the waiver of any other, prevailing over any others. IN 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. Belem, January 20, 2006 (Signed) (Signed) PAULO ALVES DA SILVA VERA LUCIA LOPES FERRAZ Witnesses: 1) 2) Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 11 ANNEX C 1. POWER OF ATTORNEY PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, appoints as his attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under n 80412, and registered at CPF under no 753. 468.697-00, granting him powers to represent him in the condition of titleholder of certain mineral rights in the location named Garimpo Santa Isabel, in the Municipality of Itaituba, PA, comprised of Requests for Mining Permit specified as follows: DNPM no. 850.624/94, 850.625/94, 850.626/94, 850.627/94, 850.628/94, 850.629/94, 850.630/94, 850.631/94, 850.632/94, 850.633/94, 850.634/94, 850.635/94, 850.636/94, 850.637/94, 850.638/94, 850.639/94, 850.640/94, 850.641/94, 850.642/94, 850.643/94, 850.644/94, 850.645/94, 850.646/94, 850.647/94, 850.648/94, 850.649/94, 850.650/94, 850.651/94, 850.652/94, 850.653/94, 850.654/94, 850.655/94, 850.656/94, 850.657/94, 850.658/94, 850.659/94, 850.660/94, 850.661/94, 850.662/94, 850.663/94, 850.664/94, 850.665/94, 850.666/94, 850.667/94, 850.668/94, 850.669/94, 850.670/94, 850.671/94, 850.672/94, 850.673/94, 850.674/94, 854.717/97, 854.718/97, 854.719/97, 854.720/97, 854.721/97, 854.722/97, 854.723/97, 854.724/97, 854.725/97, 854.726/97, 854.727/97, 854.728/97, 854.729/97, 854.730/97, 854.731/97, 854.732/97, 854.733/97, 854.734/97, 854.735/97, 854.736/97, 854.737/97, 854.738/97, with ample and general powers to: take all necessary steps to receive, transfer and assign, whether free or in payment, the Requests for Mining Permits, who may apply whatever is necessary, including request for transformation of the same requests into mineral research licenses or agree with the mineral survey on the same areas, transfer or assign, whether free or not, as well as visit, and so practice such acts, and further in this regard, contact the DNPM, the Ministry of Mines and Energy, the Brazilian Institute of Environmental and Renewable Natural Resources, SECTAM, and federal, state and municipal agencies, Notary Public offices and Government Registries in general, with powers also to sub-establish this Power of Attorney, in all or in part, which is signed irrevocably. Itaituba, January 20, 2006 (Signed) PAULO ALVES DA SILVA Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 12 EX-10.5.2 9 ex10_52.txt EXHIBIT 10.5.2 Exhibit 10.5.2 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Option Agreement regarding Santa Isabel 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. 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-10.6.1 10 ex10_61.txt EXHIBIT 10.6.1 Exhibit 10.6.1 OPTION AGREEMENT which is hereby entered into between PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as LICENSEE; and AURORA GOLD MINERACAO LTDA, a company registered with CNPJ under no. 07.763.340/0001-50, with its Office at Av. das Americas, no 700, bl. 8, lj. 215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, in this act represented by its attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753.468.697-00, hereinafter referred to as AURORA WHEREAS: A. The LICENSEE is the titleholder of certain mineral rights in areas located in the region named Garimpo Sao Joao, Municipality of Itaituba, State of Para, comprised of Requests for Mining Permit specified as follows: BLOCK 1 according to annex A-1 of the present instrument, and includes Requests for Mining Permit DNPM no. 851.533/94, 851.534/94, 851.535/94, 851.536/94, 851.537/94, 851.538/94, 851.539/94, 851.540/94, 851.541/94, 851.542/94, 851.543/94, 851.544/94, 851.545/94, 851.546/94, 851.547/94, 851.548/94, 851.549/94, 851.550/94, 851.551/94, 851.552/94, 851.553/94, 851.554/94, 851.555/94, 851.556/94, 851.557/94, 851.558/94, 851.559/94, 851.560/94, 851.561/94, 851.562/94, 851.563/94. 851.564/94, 851.565/94. 851.566/94, 851.567/94, 851.568/94, 851.569/94, 851.570/94, 851.571/94, 851.572/94, 851.573/94, 851.574/94, 851.575/94, 851.576/94, 851.577/94, 851.578/94, 851.579/94, 851.580/94, 851.581/94, 851.582/94, 851.583/94, 851.584/94, 851.585/94, 851.586/94, 851.587/94, 851.588/94, 851.589/94, 851.590/94, 851.591/94, 851.592/94. B. The LICENSEE is also the owner of part of the possession of the property which covers the mineral rights referred to in item A above, and, for a better identification of its limits, a location plant of the property is attached to this present instrument as annex A-3. C. The LICENSEE has been exploring in a rudimentary and continuous manner the areas of "Garimpo Sao Joao", and is looking for an interested company with technology and resources to survey, explore and make economic use of the gold mineral reserves which may eventually exist therein. D. The LICENSEE signed and celebrated a Memorandum of Understanding on 12DEC2005, hereinafter referred to as "MOU", whereby the LICENSEE allowed Supply Consult, a company with its Head Office in Germany at Karolinen Platz 5a, Muenchen, hereinafter referred to as "Supply", the rights to survey and acquire the mineral rights of "Garimpo Sao Joao", against payments, calculated and due under the terms and conditions indicated and declared therein; 1 E. AURORA received from Supply the information regarding the potential primary gold in "Garimpo Sao Joao" and believes possible the existence of primary minerals and, therefore, is interested in acquiring the pertinent mineral rights; F. Supply resolved to transfer to AURORA the rights which have been conferred upon Supply by the LICENSEE in the MOU, which the latter agrees to; Therefore, AURORA and LICENSEE agree to execute a definitive agreement, whereby the amounts, deadlines and other clauses and conditions shall be established, and which shall hereon be in force, between the parties hereby present, and in this regard, the parties AURORA and LICENSEE agree to the following: I. ASSESSMENT OF GARIMPO SAO JOAO 1. The LICENSEE, hereby and in the best form of the law, permits AURORA to execute in "Garimpo Sao Joao", for a period of 45 (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, consequently, its interest in definitively acquiring or not the respective mineral rights and the properties in question; (the "Assessment"). 2. It shall be up to AURORA to determine the nature, scope and extension of the survey works, and thus, all costs and expenses incurred therein are of its exclusive responsibility. 3. For the purposes of assuring a good execution of the Assessment, the LICENSEE: a) Grants to AURORA the right to occupy any of the surface areas of "Garimpo Sao Joao", which possession he declares to have, free of claims from third parties, and AURORA is assured that in case it cannot exercise its rights due to eventual problems with surface occupants, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; b) Authorizes AURORA to use the landing strip for airplanes and, if needed, to alter its outline and access roads, facilities and other improvements therein existing, and in this regard the parties shall sign a term of responsibility and/or a "loan for use". c) Shall prepare a survey of the persons involved in the mining works at "Garimpo Sao Joao" and shall present to AURORA a complete report within 90 (ninety) days from AURORA's request, but AURORA is assured that in case it cannot exercise its rights due to eventual problems with miners, it is hereby authorized by the LICENSEE to take legal action in this regard, and eventual expenses or compensations paid to them shall be deducted from the payments stipulated herein; d) AURORA acknowledges that the surface areas of "Garimpo Sao Joao" do not include the totality of the mineral rights referred to in BLOCK 1, therefore, in case AURORA cannot exercise its rights due to eventual problems with surface occupants, the actions resulting thereof are the responsibility of AURORA, although the LICENSEE shall assist in whatever possible. 2 4. The LICENSEE agrees, at the discretion of AURORA, to: a) transfer the mineral rights of "Garimpo Sao Joao" represented by Requests for Mining Permit to VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, bearer of ID no. 1816002 IFP/RJ, and registered at CPF/MF under no. 600.396.207-00, with address at Rua Barra do Mendes, no 245, casa 1, Rio de Janeiro, RJ, CEP 22753-040, under the terms of annex B 1, and the latter in the condition of depository, shall be the titleholder until when these rights can be transferred to AURORA, according to clause 10, item b below, with the mineral rights to be kept in order and good condition, until they can be assigned to AURORA or eventually returned to the LICENSEE, all this in the manner hereunder stipulated; or b) that on the mineral rights of "Garimpo Sao Joao" represented by Requests for Mining Permit, requests for mineral survey be requested in favour of the LICENSEE and these be transferred to AURORA, all this in the manner hereunder stipulated. 4.1 In consideration for the authorization which is now being granted to proceed with the Assessment of "Garimpo Sao Joao", and as price, AURORA shall pay the LICENSEE for the assignment of the mineral rights and the rights of possession over their surface area, according to items A and B: a) US$ 20,000.00 (twenty thousand dollars), on 12APR2006; b) US$ 25,000.00 (twenty-five thousand dollars), on 12SEP2006, provided AURORA confirms the mineral rights have priority and are in order and duly registered without any fault or pending issue which affect them negatively; c) US$ 60,000.00 (sixty thousand dollars), on 12SEP2007, and provided that the approval of the assignments has been published at this time for the totality of the mineral rights. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; d) US$ 80,000.00 (eighty thousand dollars), on 12SEP2008, and provided that the transformation of the Requests for Mining Permit into survey licenses has been published for the totality of this kind of mineral rights referred to herein. In the absence of such facts, and within the referred period, the above-mentioned payment is to be suspended and shall be paid within 5 (five) days upon total compliance with such stipulations; e) U$ 1,250,000.00 (one million two hundred and fifty thousand dollars), on 12SEP2009, or in twelve months from the payment stipulated in item d above, whichever occurs last. 4.1.1 In addition to the price herein established, AURORA shall pay to the LICENSEE 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 1.5% (one and half percent) of the monthly net results of the primary gold production, as defined below in item 4.1.2. 4.1.2 The participation in the mining results shall be paid by the 10th (tenth) business day of the month subsequent to the production month, and the payment shall be made through a 3 bank deposit as stipulated by the LICENSEE. 4.1.3 For the purposes specified above, the production net result shall correspond to the value of the gross revenue AURORA obtains from the sale of the gold produced by AURORA 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 trading of the gold; and (iv) "financial compensation" as provided for in Law 7790 of December 28, 1989. 4.1.4 AURORA is entitled to the right to redeem the obligation for participation payment in the mining results upon payment, in local currency, of US$ 1,000,000.00 (one million US dollars). 4.1.4.1 The above right conferred to AURORA may be exercised at any time, by means of a notice addressed to the LICENSEE. 4.1.4.2 If AURORA 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 4.2 below. 4.2 Amounts due, Conversion and Calculation: On the original due date of each of the portions, "4(a) to 4 (e)", its amount shall be converted from US dollars to Reals according to the exchange rate obtained by AURORA when effecting the foreign exchange transaction during the 30 (thirty) days prior to the payment, or, in its absence, to the average of the current commercial buying and selling exchange rates obtained on the last business day immediately prior to the date of the referred payment, as informed in the newspaper "Gazeta Mercantil" or in its absence, in another major daily newspaper. 4.2.1 The payment of the amounts shall be made: 4.2.1.1 Personally, or via deposit in bank account in Itaituba, specified as follows, or any other which the LICENSEE may indicate to AURORA, with the amounts referring to in "4(a) to 4(e) to be deposited in the LICENSEE's account: - - Paulo Alves da Silva - Banco Bradesco, no 237, Branch 0759-5, CC (Current Account) 018333-4; 4.2.1.2 The above bank account may only be changed up to the 5th business day immediately prior to the date of payment. 4.3 The above payments include indemnities and rentals payable to the surface occupants of the property in which AURORA conducts its survey; in case any surface occupant other than the LICENSEE is found in those areas, the LICENSEE, in view of the Block in question, should obtain for AURORA access to survey and the right to mining, without onus; otherwise, AURORA may take legal action in this regard and deduct all and any expense which it may incur from the above referred payments. 4 II TEMPORARY SUSPENSION 5. If for any reason beyond its control, including, but not limited to, the invasion of "Garimpo Sao Joao" by third parties and impossibility of access to same due to resistance of its proprietors and/or occupants, AURORA is obstructed from executing mineral research works therein, it shall have the right to suspend work for the period of time which the obstruction lasts. 6. Should this occur, AURORA shall immediately: (i) notify the facts to the LICENSEE and (ii) adopt, if the nature of the circumstance so allows and with the cooperation of the LICENSEE, including the provisions of item 3 above, all measures within its reach to overcome such obstruction and resume work. 7. During the period of suspension of works, the deadlines for conclusion of the Assessment and for payment of the instalments of the price referred to in clauses 4(c) to 4(e) shall be extended by a period equal to the suspension. III COMPATIBILITY BETWEEN SURVEY WORKS AND MINING WORKS 8. During the geological assessment stage of the "Garimpo Sao Joao" referred to in Chapter I above, the LICENSEE may develop mining works therein, provided such mining work does not interfere with the survey activities by AURORA and there is no increase in the production fronts (volume of gold recovered) previously developed and, further: a) its object is exclusively extractable gold; gold panning, prospecting and collecting. b) it is limited to open sky works; c) it is limited to a depth not exceeding 25 (twenty-five) meters of the surface quota; d) does not employ more workers than those involved to date. IV. THE IMPROVEMENT OF THE MINERAL RIGHTS 9. The parties are aware that part of the mineral rights held by the LICENSEE to pursue what is stipulated in this instrument, may be converted into survey license, that is, they will be the object of requests for survey license, and the requests for mining permits on the "Garimpo Sao Joao" as listed in item A above may be extinct or discontinued. 10. It is the undertaking of all parties that, jointly, they will work to obtain as soon as possible: a) The issue of environmental licences and the proper assignment of mining permits for conversion into survey licenses, issue of survey licenses, for "Garimpo Sao Joao" for the areas object of the requests still under examination by DNPM; b) The proper transformation of the requests for mining permits already assigned and those to be assigned into authorization of mineral survey, according to current legislation. 11. For the purposes contained in clause 10 above, the LICENSEE shall give representation 5 powers to AURORA and its lawyer, in the form of annex C1, before DNPM and the environmental agency of the state of Para, which commits not to object, and to facilitate regarding the transfer, conversion, assent, regarding said mineral rights, and the survey work done by and for AURORA or by and for whomever it indicates, without any onus. 12. The expenses incurred for the purposes of this Chapter IV, including, among other things, obtaining environmental licences, payment of taxes and fess, shall be for AURORA's account. V ANTECIPATED RESCISION OF THE AGREEMENT 13. AURORA shall have the right, with a notice addressed to the LICENSEE, to denounce this Agreement and consider it terminated in all or in part, if: a) The Requests for Mining Permits (PLG's) are not granted or if the conversion of said PLG's into authorization(s) are denied by DNPM; b) the DNPM refuses to approve the assignment in its favour of the mineral rights referred to in Chapter I above; c) At its exclusive discretion, the results of the geological assessment, even if partial, indicate the inexistence or insufficiency of gold reserve for economical industrial use. 13.1 Occurring either of the situations above, the agreement shall be immediately deemed rescinded, and the parties shall be free from the undertakings yet to be due, which both parties reciprocally hereby undertook, and none of the party is entitled to any indemnity or compensation of any nature by virtue of the resulting rescission. 13.2 Still in those situations, AURORA: a) Shall not be entitled to the reimbursement of any amounts previously paid to the LICENSEE or spent in the survey works; b) Shall be dispensed from effecting any payment still to be due, c) Shall withdraw from the surface areas of "Garimpo Sao Joao", returning the mineral rights granted in the state they are back to the LICENSEE; d) Shall, within 30 (thirty) days from the date of notice of rescission and independently of any payment, supply to the LICENSEE the technical information generated in the course of its survey works. VI RETURN OF THE MINERAL RIGHTS 14. At any time during the assessment period, if the results of the assessment are unfavourable, and the measures referred to in Chapter I above are unsuccessful, AURORA may notify the LICENSEE so that it receives in return the rights to the mining permits referred to herein. In case the LICENSEE, after 60 days from the notification, has not done so, that is, has not provided the required documentation in this regard, AURORA may dispose of those rights as it deems fit, giving them up or assigning to third parties. VII OTHER OBLIGATIONS 6 15. As provided for in this agreement, the LICENSEE is obliged to, besides other obligations undertaken with AURORA, a) Care for the proper handling of the survey requests and mining permits and comply adequately with all the requirements which are requested by the competent authorities regarding the assignment of Permits, obtaining survey licenses or mining resolutions; b) Execute the mining works in strict obedience to the pertinent legal and regulating norms, observing the limitations covered in Chapter III above; c) Adopt all measures within its reach to guarantee that AURORA may execute its mineral survey by avoiding or stopping the invasion of "Garimpo Sao Joao" by third parties; d) Supply to AURORA, whenever requested, geological data and information regarding "Garimpo Sao Joao", which have been obtained in the course of the mining works. 16. As provided for in this agreement, AURORA is obliged to, besides other obligations undertaken with the LICENSEE: a) Follow up with DNPM all processes listed in item A, from the date when the survey requests and/or assignments, and/or conversions of the mining permits into survey authorizations were submitted; b) Care for the proper handling of the requests referred to in item (a) above and comply, if necessary, with the cooperation of the LICENSEE, all the requirements which are requested by the competent authorities regarding the assignment of survey authorizations; c) Effect full payment (i) of all expenses necessary to obtain the environmental licenses required for the assignment of the survey authorizations referred to in clause 10 above, and (ii) all taxes and fees necessary for the assignment of such survey authorizations; d) Executive mineral survey works in strict compliance with the pertinent legal norms; VIII GENERAL CONDITIONS 17. IRREVOCABILITY - Except as provided for in clause 13 above, this agreement is signed in an irrevocable manner, and the LICENSEE is obliged not to alienate or promise to alienate, in any way or form, not to burden nor abandon the mineral rights object of this agreement. 18. ASSIGNMENT AND TRANSFER - The LICENSEE hereby agrees and has nothing to oppose that the rights hereby conferred to AURORA in this agreement may in part or in whole be transferred, assigned, alienated, sold to third parties at the exclusive discretion of AURORA, which may also associate with others for the compliance of this agreement, however, AURORA, in case of assignment, alienation, sale and or total transfer of the rights hereby conferred, shall include a clause in this regard, and notify the LICENSEE of its decision. 19. CONFIDENTIALITY - Except if required by law or by Stock Exchange regulation, the parties shall maintain strict confidentiality of the terms and conditions of this agreement and shall not disclose to third parties, in any form, oral or written, information regarding the mining or survey works, or their results, without the prior consent in writing of the other 7 non-disclosing party. Each party shall demand from its representatives, employees, consultants and service providers identical confidentiality agreement. 20. COMMUNICATIONS/CITATIONS - All communications and notices transmitted under the terms of this agreement are to be made in writing and delivered personally or transmitted by cable to the addresses indicated in the preamble of this agreement, or to any other place that each of the party indicates, in the form indicated in this clause, and to this effect the present clause is irrevocable, without any possibility of revocation until all the obligations herein established have been complied with. 21. AMENDMENTS - Any amendment to this agreement shall be made in writing and signed by the parties hereby represented. 22. ARBITRATION - The partners elect the Main Court of the city of Rio de Janeiro, State of Rio de Janeiro, to resolve any doubts deriving from this agreement which can not be resolved amicably. IN WITNESS WHEREOF, the parties execute this instrument in 3 (three) counterparts of identical tenor and form, in the presence of two witnesses who also subscribe this instrument. Belem, January 20, 2006 (Signed) (Signed) PAULO ALVES DA SILVA AURORA GOLD MINERACAO LTDA. WITNESSES: 1) 2) Name: Name: CPF: CPF: Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 8 Annex B 1 TO THE DIRECTOR OF THE NATIONAL DEPARTMENT OF MINERAL PRODUCTION (DNPM) 851.533/94 851.534/94 851.535/94 851.536/94 851.537/94 851.538/94 851.539/94 851.540/94 851.541/94 851.542/94 851.543/94 851.544/94 851.545/94 851.546/94 851.547/94 851.548/94 851.549/94 851.550/94 851.551/94 851.552/94 851.553/94 851.554/94 851.555/94 851.556/94 851.557/94 851.558/94 851.559/94 851.560/94 851.561/94 851.562/94 851.563/94 851.564/94 851.565/94 851.566/94 851.567/94 851.568/94 851.569/94 851.570/94 851.571/94 851.572/94 851.573/94 851.574/94 851.575/94 851.576/94 851.577/94 851.578/94 851.579/94 851.580/94 851.581/94 851.582/94 851.583/94 851.584/94 851.585/94 851.586/94 851.587/94 851.588/94 851.589/94 851.590/94 851.591/94 851.592/94 PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as ASSIGNOR and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under no. 600.396.207-00, with ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no. 245, casa 01, RJ, CEP 22753-040, hereinafter referred to as ASSIGNEE, hereby inform and request the following On 20JAN06, the ASSIGNOR, applicant of the above-mentioned mineral rights, executed with the ASSIGNEE an "Agreement of Assignment of Mineral Rights", transferring to the latter the aforesaid mineral rights, in accordance with the document submitted to this DNPM as per annex I, and as such, the parties hereby present resolve to apply for the filing and registry of the requests for assignment and registration of the transfer. We remain, Requesting your approval, Belem, January 20, 2006 (Signed) PAULO ALVES DA SILVA VERA LUCIA LOPES FERRAZ Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 9 PRIVATE AGREEMENT FOR THE ASSIGNMENT AND TRANSFER OF MINERAL RIGHTS AS FOLLOWS: PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, hereinafter referred to as ASSIGNOR and VERA LUCIA LOPES FERRAZ, Brazilian, married, businesswoman, registered at CPF under no. 600.396.207-00 and ID card no. RG 1816002 IFP/RJ, with address at Rua Barra do Mendes, no. 245, casa 01, RJ, CEP 22753-040, hereinafter referred to as ASSIGNEE WHEREAS the ASSIGNOR is the titleholder of the REQUESTS FOR MINING PERMITS, DNMP no. 851.533/94, 851.534/94, 851.535/94, 851.536/94, 851.537/94, 851.538/94, 851.539/94, 851.540/94, 851.541/94, 851.542/94, 851.543/94, 851.544/94, 851.545/94, 851.546/94, 851.547/94, 851.548/94, 851.549/94, 851.550/94, 851.551/94, 851.552/94, 851.553/94, 851.554/94, 851.555/94, 851.556/94, 851.557/94, 851.558/94, 851.559/94, 851.560/94, 851.561/94, 851.562/94, 851.563/94, 851.564/94, 851.565/94, 851.566/94, 851.567/94, 851.568/94, 851.569/94, 851.570/94, 851.571/94, 851.572/94, 851.573/94, 851.574/94, 851.575/94. 851.576/94, 851.577/94, 851.578/94, 851.579/94, 851.580/94, 851.581/94, 851.582/94, 851.583/94, 851.584/94, 851.585/94, 851.586/94, 851.587/94, 851.588/94, 851.589/94, 851.590/90, 851.591/94, 851.592/94. WHEREAS the above-mentioned Requests for Mining Permits, herein referred to as Mining Rights, are free and clear of any claims, liens or encumbrances; WHEREAS the ASSIGNOR wishes to assign to the ASSIGNEE the Mineral Rights, and the latter being in agreement with such transfer, the Parties agree to execute this Agreement of Assignment and Transfer of Mineral Rights, in accordance with the following clauses and conditions: 1. By this present private agreement entered into, and as prescribed by law, the ASSIGNOR assigns and transfer to the ASSIGNEE the Mineral Rights, as they are in fact assigned and transferred, in a definitive manner. 2. It is up to the ASSIGNEE to verify with the DNPM the correctness, validity and legal status of the Mineral Rights now being assigned, and it is agreed that this present instrument will automatically loose any legal effect with regard to any of the Mineral Rights which for any reason are denied or declined by the DNPM, and as such nothing shall be alleged against the ASSIGNOR, and the parties shall mutually endeavour their best efforts to obtain the registration of the assignment now being agreed upon. 3. It is the responsibility of the ASSIGNEE, independently of the registration of the Mineral Rights referred to herein, to pay all and any taxes or expenses. 4. The ASSIGNOR hereby grants the ASSIGNEE, with regard to the Mineral Rights, full representation powers with the DNPM - National Department of Mineral Production, the 10 Ministry of Mines and Energy, the State Secretary for Environment of the State of Para, and IBAMA - the Brazilian Institute of Environmental and Renewable Natural Resources, with full powers to request and apply for the registration of the assignment, provide declarations and clarifications, to sign, present or withdraw any document, to meet requirements, make payments, receive the correspondent receipts, to ratify or rectify, or to compromise as well as to practice any and all acts necessary for the good compliance of the powers herein granted. 5. This present instrument is irrevocable and the signatories, their heirs or successors, are obliged to comply with the terms and conditions set forth herein, and any previous document signed between the parties with the object being the assignment and transfer of the Mineral Rights referred to herein shall be null and void. 6. 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, with the waiver of any other, prevailing over any others. IN 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. Belem, January 20, 2006 (Signed) PAULO ALVES DA SILVA VERA LUCIA LOPES FERRAZ Witnesses: 1) 2) Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 11 ANNEX C 1. POWER OF ATTORNEY PAULO ALVES DA SILVA, Brazilian, single, businessman, bearer of ID card RG 89.634-SSP/PA and registered at CPF/MF under no. 065.581.602-00, with address at Rua Dr. Hugo de Mendonca, no. 10, Centro, in the city of Itaituba, PA, appoints as his attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered with the Brazilian Bar Association (RJ) under no 80412, and registered at CPF under no 753. 468.697-00, granting him powers to represent him in the condition of titleholder of certain mineral rights in the location named Garimpo Sao Joao, in the Municipality of Itaituba, PA, comprised of Requests for Mining Permit specified as follows: DNPM no. 851.533/94, 851.534/94, 851.535/94, 851.536/94, 851.537/94, 851.538/94, 851.539/94, 851.540/94, 851.541/94, 851.542/94, 851.543/94, 851.544/94, 851.545/94, 851.546/94, 851.547/94, 851.548/94, 851.549/94, 851.550/94, 851.551/94, 851.552/94, 851.553/94, 851.554/94, 851.555/94, 851.556/94, 851.557/94, 851.558/94, 851.559/94, 851.560/94, 851.561/94, 851.562/94, 851.563/94, 851.564/94, 851.565/94, 851.566/94, 851.567/94, 851.568/94, 851.569/94, 851.570/94, 851.571/94, 851.572/94, 851.573/94, 851.574/94, 851.575/94, 851.576/94, 851.577/94, 851.578/94, 851.579/94, 851.580/94. 851.581/94, 851.582/94, 851.583/94, 851.584/94, 851.585/94, 851.586/94, 851.587/94, 851.588/94, 851.589/94, 851.590/94, 851.591/94, 851.592/94, with ample and general powers to: take all necessary steps to receive, transfer and assign, whether free or in payment, the Requests for Mining Permits, who may apply whatever is necessary, including request for transformation of the same requests into mineral research licenses or agree with the mineral survey on the same areas, transfer or assign, whether free or not, as well as visit, and so practice such acts, and further in this regard, contact the DNPM, the Ministry of Mines and Energy, the Brazilian Institute of Environmental and Renewable Natural Resources, SECTAM, and federal, state and municipal agencies, Notary Public offices and Government Registries in general, with powers also to sub-establish this Power of Attorney, in all or in part, which is signed irrevocably. Itaituba, January 20, 2006 (Signed) PAULO ALVES DA SILVA Seal and stamp of Notary Public signed in Itaituba on 24JAN06 authenticating the signature of Paulo Alves da Silva 12 EX-10.6.2 11 ex10_62.txt EXHIBIT 10.6.2 Exhibit 10.6.2 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia Tel. 604-687-4432 Fax 604-687-4709 Attention: Cameron Richardson Email: c.richardson@telus.net ---------------------- From: Tomas Almeida, Certified Translator Re: Translation of Option Agreement regarding Sao Joao 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. 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-10.7.1 12 ex10_71.txt EXHIBIT 10.7.1 Exhibit 10.7.1 (Translated from Portuguese) MEMORANDUM OF UNDERSTANDING By this present Agreement entered into by, on the one side, AURORA GOLD MINERACAO LTDA, a company with its Office at Av. das Americas, no 700, bloco 8, lj. 215-A, parte, CEP: 22640-100, Barra da Tijuca, Rio de Janeiro, RJ, hereinafter referred to as AURORA, in this act represented by its attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered at the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753.468.697-00; and on the other side, MARIA TEREZA BARBOSA DA SILVA, Brazilian, divorced, businesswoman, bearing the Identity Card No. RG 3717073/SSPA, and duly enrolled in the Individual Taxpayer's Register under no. 110. 808.762-00, with address at Av. Primeiro de Maio, no 764, Bairro Hidraulica, Rio Grande, state of Rio Grande do Sul, CEP 96202-000, hereinafter referred to as GARIMPEIRA, and collectively referred to as "CONTRACTING PARTIES", AURORA and GARIMPEIRA have decided amongst themselves as righteous and agreed upon the following: OBJECT: Hereinafter named Garimpo Piranhas, this object is made up of Processes DNPM no. 855.892/96 to 856.289/96, being titleholder Maria Tereza Barbosa da Silva, and 853.597/93 to 853.638/93, ESTATE of Sebastiao Balbino de Souza, in this act represented by the spouse of the deceased and executrix MARIA TEREZA BARBOSA DA SILVA, by authorization issued by His Justice of the ___th Family and Probate Court of the District of___________, State of _________, on ________, which is part of his estate of which she is the executrix, according to annex A of this instrument. A. WHEREAS GARIMPEIRA is the titleholder of certain mineral rights located in the region of Garimpo Piranhas, in the Municipality of Itaituba, PA, which rights refer to PLG Processes DNPM no. 855.892/96 to 856.289/96 and 853.597/93 to 853.638/93, with assured priority, and being the said mineral rights, for the better understanding, specified in Annex A of this instrument, in two blocks with distinct titles, and hereinafter referred to as GARIMPO. B. WHEREAS AURORA 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 GARIMPEIRA, who agrees to this, with the knowledge that the work done is at AURORA's expense and risk. C. WHEREAS AURORA has the necessary technological and economic means to develop gold mineral reserves 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 AURORA will appoint a person of trust to act on its behalf by means of a specific agreement which model is hereto attached, annex B. In order to preserve the negotiation, the parties agree to execute this temporary instrument, hereinafter referred to as "Memorandum of Understanding", hereinafter named "ME", 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 1 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 AURORA, 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 180 (one hundred and eighty) days and for such purpose shall sign a Power of Attorney according to the attach model, annex C, and, therefore, 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 MOU, AURORA hereby undertakes to pay GARIMPEIRA the equivalent of R$ 8,000.00 (eight thousand reals) for the 6 (six) months of validity of this MOU, of which in this act are advanced, namely, R$ 20,000.00 (twenty thousand reals) as deposit, for the sole and exclusive right to appraise duly and in detail the GARIMPO. 1.2 - The payment of the DEPOSIT is made hereby, with the signing of this instrument as proof of payment, while the subsequent payments shall be made through a bank deposit in favour of MARIA TEREZA BARBOSA DA SILVA, chequing account no. 0540531-9 with Branch 0412-0 of Bradesco S/A, in the city of Rio Grande, RS, which GARIMPEIRA will indicate to AURORA. 1.3 - GARIMPEIRA, as from the date of the execution hereof and within the term of 180 (one hundred and eighty) 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, agrees to make available for AURORA to inspect and examine all and any data it might have access to in regard to GARIMPO. During this period, AURORA shall make site visits, examine the data and decide to exercise its option to acquire the GARIMPO. In case AURORA decides to exercise its option to acquire the GARIMPO, it shall notify GARIMPEIRA of its decision at least five days prior to the expiration of the abovementioned period. 2 - ASSIGNMENT AND TRANSFER OF RIGHTS 2.1 - In accordance with item 1.3. of this MOU, having AURORA notified GARIMPEIRA of its interest to acquire the GARIMPO, the parties hereby shall celebrate within 30 days an Agreement for the Assignment and Transfer of Rights and Other Covenants, 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 as price for the assignment of the mineral rights and the possession rights, the values established as follows:
Date Payment US$ I 30 JUN 2006 30,000.00 II 21 JUL 2006 * 70,000.00 III 21 JUL 2007 ** 120,000.00 IV 21 JUL 2008 180,000.00 V 21 JUL 2009 1,600,000.00 Total US$2,000,000.00
2 * The payment of this instalment and others shall be made provided registration of the transfer of rights in question has been made. ** The payment of this instalment and others shall be made provided survey authorization for the mineral rights in question has been obtained. 2.1.1 In addition to the price herein established, AURORA shall pay to GARIMPEIRA 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 1.5% (one and half percent) of the monthly net results of the primary gold production, as defined below in item 2.1.3, in any of the mineral rights in question. 2.2.2 The participation in the mining results shall be paid by the 10th (tenth) business day of the month subsequent to the production month, and the payment shall be made through a bank deposit as stipulated by GARIMPEIRA. 2.1.3 For the purposes specified above, the production net result shall correspond to the value of the gross revenue AURORA obtains from the sale of the gold produced by AURORA 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. 2.2 - GARIMPEIRA agrees to transfer the mineral rights referring to GARIMPO immediately upon the interest by AURORA is confirmed and against payment of amount (I) and upon confirmation of its priority. 2.2.1 GARIMPEIRA shall, under the terms of this instrument, hereby and in the best form of the law, permit AURORA to execute in the GARIMPO, for a period of 44 (forty-four) months as from the date of this MOU, and in case the GARIMPO is acquired, assessment work and geological survey which it deems necessary to ascertain the existence of possible primary deposits which may be economically explored. It should be noted that during the geological assessment of the GARIMPO, GARIMPEIRA may develop works therein provided that work in the said mining site does not interfere with AURORA's research activities. 2.2.2 - Regarding the ownership, GARIMPEIRA 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. above. In case of absence of authorizations or eventual problems with access or title to the surface areas, these shall be resolved by GARIMPEIRA, and in the absence of a solution, AURORA is authorized to resolve such matters and shall deduct all and any cost incurred from the values to GARIMPEIRA. 2.2.3 - For such purpose, GARIMPEIRA agrees to the best of its ability to provide to AURORA with technical, legal and operational support, as well as undertake to endeavour its best efforts to give AURORA 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 AURORA being responsible for the financial expenses incurred to obtain such results. 3 2.3 - AURORA may, after the registration of the assignment and transfer of rights, 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. 2.4 - At any time, AURORA shall be entitled to terminate the Agreement and drop the GARIMPO PROJECT, by means of a notice, fax, cable or advice to GARIMPEIRA to this effect, being henceforth free of any and all payment commitments yet to be due. If AURORA decides to exercise its option to terminate the Agreement, it shall deliver to GARIMPEIRA in due course a detailed technical report which shall include all and any information gathered to date. 2.5 - 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, GARIMPEIRA is responsible for the environmental damages caused to the GARIMPO up to the signing of this agreement. In case of non-compliance of such obligations, AURORA is authorized to provide for eventual recovery work, deducting the expenses incurred from the amounts payable according to above item 2.1. 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 being linked to the stock market and disclosure is required by law. 4. COMMUNICATION 4.1. Any notice and communication related to the GARIMPO 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. 5. REPRESENTATIONS AND WARRANTIES 5.1. Each of the CONTRACTING PARTIES herein represents and warrants to each other that: (a) They 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, 4 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 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 item 2.1, with regard to the mineral rights herein referred, 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 DISPOSITIONS 6.1. This MOU represents and comprises all the understanding and commitments agreed amongst the CONTRACTING 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 MOU the signatories, their successors and any authorized assignees are obliged to comply with the terms and conditions set forth herein. 6.3. This MOU 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 representative of each party. 6.4. No tolerance by any of the CONTRACTING PARTIES with regard to future non-compliance of this instrument shall constitute an amendment or novation of the conditions agreed upon herein. 6.5. This MOU 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. 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 30JUN06. 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 Itaituba, Para, with the waiver of any other, prevailing over any 5 others. However, the parties are entitled to solve any dispute by means of arbitration at the court of the city of Itaituba, Para, provided that they have reached this decision by mutual agreement. IN WITNESS WHEREOF, the parties execute this instrument in 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, December 21, 2005 (Signature) MARIA TEREZA BARBOSA DA SILVA (Signature) AURORA GOLD MINERACAO LTDA Witnesses 1) (Signature) 2) (Signature) Seal and stamp of notaries public authenticating the signatures of Maria Tereza Barbosa da Silva and Luis Mauricio Ferraiuoli de Azevedo. 6 PRIVATE AGREEMENT FOR THE ASSIGNMENT AND TRANSFER OF MINERAL RIGHTS AS FOLLOWS: By this present Agreement entered into by, on the one side: MARIA TEREZA BARBOSA DA SILVA, Brazilian, divorced, businesswoman, bearing the Identity Card No. RG 3717073/SSPA, and duly enrolled in the Individual Taxpayer's Register under no. 110.808.762-00, with address at Av. Primeiro de Maio, no 764, Bairro Hidraulica, Rio Grande, state of Rio Grande do Sul, CEP 96202-000, hereinafter referred to as ASSIGNOR, and xxxxxxxxxxxxxxxxxxxxxxxx hereinafter referred to as ASSIGNEE. WHEREAS the ASSIGNOR is the titleholder of PLG Processes DNPM no. 855.892/96 to 856.289/96 and 853.597/93 to 853.638/93, hereinafter referred to as Mineral Rights, which are free and clear of any claims, liens or encumbrances; WHEREAS the ASSIGNOR wishes to assign to the ASSIGNEE the Mineral Rights, and the latter being in agreement with such transfer, the Parties agree to execute this Agreement of Assignment and Transfer of Mineral Rights, in accordance with the following clauses and conditions: 1. By this present private agreement entered into, and as prescribed by law, the ASSIGNOR assigns and transfer to the ASSIGNEE the Mineral Rights, as they are in fact assigned and transferred in a definitive manner. 2. It is up to the ASSIGNEE to verify with the DNPM the correctness, validity and legal status of the Mineral Rights now being assigned, and it is agreed that this present instrument will automatically loose any legal effect with regard to any of the Mineral Rights which for any reason is denied or declined by the DNPM, and as such nothing shall be alleged against the ASSIGNOR, and the parties shall mutually endeavour their best efforts to obtain the registration of the assignment now being agreed upon. 3. It is the responsibility of the ASSIGNEE, independently of the registration of the Mineral Rights referred to herein, to pay all and any taxes or expenses. 4. The ASSIGNOR hereby grants the ASSIGNEE, with regard to the Mineral Rights, full representation powers with the DNPM - National Department of Mineral Production, the Ministry of Mines and Energy, the State Secretary for Environment of the State of Para, and IBAMA - the Brazilian Institute of Environmental and Renewable Natural Resources, with full powers to request and apply for the registration of the assignment, provide declarations and clarifications, to sign, present or withdraw any document, to meet requirements, make payments, receive the correspondent receipts, to ratify or rectify, or to compromise as well as to practice any and all acts necessary for the good compliance of the powers herein granted. 5. This present instrument is irrevocable and the signatories, their heirs or successors, are obliged to comply with the terms and conditions set forth herein, and any previous document signed between the parties with the object being the assignment and transfer of the Mineral Rights referred herein shall be null and void. 7 6. The Parties hereby agree that any and all dispute arising from this agreement shall be resolved at the Main Court of the city of Itaituba, Para, with the waiver of any other, prevailing over any others. IN 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. Belem, June 30, 2005 GALDINO ANTONIO DA SILVA LUZ xxxxxxxxxxx WITNESSES: 1) 8 TO THE DIRECTOR OF THE NATIONAL DEPARTMENT OF MINERAL PRODUCTION (DNPM) DNPM no. 855.892/96 to 856.289/96 and 853.597/93 to 853.638/93 MARIA TEREZA BARBOSA DA SILVA, Brazilian, divorced, businesswoman, bearing the Identity Card No. RG 3717073/SSPA, and duly enrolled in the Individual Taxpayer's Register under no. 110.808.762-00, with address at Av. Primeiro de Maio, no 764, Bairro Hidraulica, Rio Grande, state of Rio Grande do Sul, CEP 96202-000, for herself and as executrix of the estate of Sebasti o Balbino de Souza, hereinafter referred to as ASSIGNOR, and xxxxxxxxxxxxxxxxxxxxx hereinafter referred to as ASSIGNEE, hereby inform and request the following: On 21 DEC 05, the ASSIGNOR, applicant of the above-mentioned mineral rights, executed with the ASSIGNEE an "Agreement of Assignment of Mineral Rights", transferring to the latter the aforesaid mineral rights, in accordance with the document submitted to this DNPM as per annex I, and as such, the parties hereby present resolve to apply for the filing and registry of the requests for assignment and registration of the transfer. Requesting your approval, Belem, June 30, 2005 MARIA TEREZA BARBOSA DA SILVA xxxxxxxxxxxxxxx 9 POWER OF ATTORNEY By this present Power of Attorney, MARIA TEREZA BARBOSA DA SILVA, Brazilian, divorced, businesswoman, bearing the Identity Card No. RG 3717073/SSPA, and duly enrolled in the Individual Taxpayer's Register under no. 110.808.762-00, with address at Av. Primeiro de Maio, no 764, Bairro Hidraulica, Rio Grande, state of Rio Grande do Sul, CEP 96202-000, for herself and as executrix of the estate of Sebasti o Balbino de Souza, appoints as her attorney Luis Mauricio Ferraiuoli de Azevedo, Brazilian, single, lawyer, registered at the Brazilian Bar Association (RJ) under no. 80412 and registered at CPF/MF under no. 753.468.697-00, to represent her as titleholder of certain mineral rights in areas located in the region named Garimpo do Novo Porto, in the Municipality of Itaituba, state of Para, comprising of Applications for Mining Permits specified as follows: DNPM no. 855.892/96 a 856. 289/96 and 853.597/93 to 853.638/93 with ample and general powers to: Take all necessary steps to look up and copy Requests for Mining Permits at the NATIONAL DEPARTMENT OF MINERAL PRODUCTION - DNPM, the Ministry of Mines and Energy, the Brazilian Institute of Environmental and Renewable Natural Resources, SECTAM, and at federal, state, municipal or Federal District agencies, Notary Public offices, Government Registries in general, with powers also to sub-establish this Power of Attorney which is valid until 30JUN06. Itaituba, December 21, 2005 (Signature) MARIA TEREZA BARBOSA DA SILVA Seal and stamp of Notary Public authenticating the above signature 10 EX-10.7.2 13 ex10_72.txt EXHIBIT 10.7.2 Exhibit 10.7.2 March 20, 2006 To: Aurora Gold Corporation 30 Ledger Road, Balcatta, Western Australia, 6021 Australia 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 Piranha 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. 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-31.1 14 ex31_1.txt EXHIBIT 31.1 Exhibit 31.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, Klaus Eckhof, certify that: 1. I have reviewed this Form 10-KSB of Aurora Gold Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this interim report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this interim report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data and information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 24, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President and Chief Executive Officer EX-31.2 15 ex31_2.txt EXHIBIT 31.2 Exhibit 31.2 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, A. Cameron Richardson, certify that: 1. I have reviewed this Form 10-KSB of Aurora Gold Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this interim report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this interim report based on such evaluation; and c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weakness in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial data and information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 24, 2006 BY: /s/ A. Cameron Richardson -------------- ------------------------- A. Cameron Richardson Chief Financial Officer EX-32.1 16 ex32_1.txt EXHIBIT 32.1 Exhibit 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 I, Klaus Eckhof, President and Chief Executive Officer of Aurora Gold Corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Annual Report on Form 10-KSB of the Company for the period ended December 31, 2005 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 24, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President and Chief Executive Officer EX-32.2 17 ex32_2.txt EXHIBIT 32.2 Exhibit 32.2 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 I, Cameron Richardson, Chief Financial Officer of Aurora Gold Corporation (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: 1. The Annual Report on Form 10-KSB of the Company for the period ended December 31, 2005 which this certification accompanies fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. Date: March 24, 2006 BY: /s/ Cameron Richardson -------------- ------------------------- Cameron Richardson Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----