-----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, Pb411kui5wskCQ1mc+xXdh/po4Bxq31Y7hN8uAFAKxv70JqdQO6JcbTreR11apM7 Txxi/tghS+gZI2pzOXBgMg== 0001140361-06-005829.txt : 20060413 0001140361-06-005829.hdr.sgml : 20060413 20060413164014 ACCESSION NUMBER: 0001140361-06-005829 CONFORMED SUBMISSION TYPE: 10KSB/A PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060413 DATE AS OF CHANGE: 20060413 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24393 FILM NUMBER: 06758891 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/A 1 form10ksba.txt AURORA GOLD 10-KSBA 12-31-2005 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-KSB/A [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 Employer Identification No.) incorporation or organization) (I.R.S. 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 we 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 we signed seven Memorandum of Understanding ("MOU") covering the Nova Porto, Santa Clara, Ouro Mil, Santa Isabel, Sao Domingos, Sao Joao and Piranhas properties located in the Municipality of Itaituba, Tapajos gold province, State of Para, Brazil. The MOUs provided us a review period, ranging from two months to six months, to access the mineral potential of the properties. Subsequent to year-end we 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 us 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 we will be free of any and all payment commitments yet to be due. In March 2006 we decided not to follow-up our preliminary exploration program on the Novo Porto property and have decided not to exercise our option to acquire the property. 3 The Ouro Mil option agreement allows us 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 we will be free of any and all payment commitments yet to be due. The Santa Isabel option agreement allows us 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 we will be free of any and all payment commitments yet to be due. The Sao Domingos option agreement allows us 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 we will be free of any and all payment commitments yet to be due. The Sao Joao option agreement allows us 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 we will be free of any and all payment commitments yet to be due. In February 2006, we closed a private placement of 8,000,000 of our common shares 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 We conduct our exploration and property acquisition activities through our 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 our 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. We are currently concentrating our exploration activities in Brazil and Canada. We are also examining data relating to the potential acquisition of other exploration properties in Mexico and South America. We have 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 own or control unpatented mining claims in British Columbia, Canada. Our strategy is to concentrate our 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 we 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). We have 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. We have 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 our 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 our other 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. Our properties are in the exploration stage only and are without a known body of Mineral Reserves. Our primary objective is to explore for gold, silver, base metals and industrial minerals and, if warranted, to develop those existing mineral properties. Our secondary objective is to locate, evaluate, and acquire 5 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 our mineral exploration and development activities will result in any discoveries of commercially viable bodies of mineralization. The long-term profitability of our operations will be, in part, directly related to the cost and success of 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 Our interests in our 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 us. (F) Foreign Countries and Regulatory Requirements To the extent that we acquire or continue to develop resource properties outside of the United States of America the mineral exploration and mining activities on our 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 our control and may adversely affect our business. Our 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 us to raise funds for the development of our 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. We encounter 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 us and thus we may be at a disadvantage with respect to some of its competitors. The marketing of minerals is affected by numerous factors, many of which are beyond our control. 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 6 prices. Significant price movements in mineral prices over short periods of time may be affected by numerous factors beyond our control, 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 our properties cannot accurately be predicted. As we are 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 our 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 we have 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. We do not have general liability insurance covering our operations. Payment of any liabilities in excess of our insurance coverage could have a materially adverse effect upon our 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. We have a direct interest in several properties. The properties have no known reserves. We have no history of earnings or cash flow from operations. Historically, the only source of funds available to us is through (i) the sale of its equity shares or (ii) borrowings. Even if the results of future exploration programs are encouraging, we 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 we may generate additional working capital through the operation, development, sale or possible syndication of our properties, there is no assurance that any such funds will be available for operations. The development of any ore deposits, if found on our property, depends upon our ability to obtain financing through joint venturing of properties, debt financing, equity financing or other means. There is no assurance that we will be able to obtain the required financing. Failure to obtain additional financing on a timely basis could cause us to forfeit our interest in such properties, dilute our interest in the properties and/or reduce or terminate our operations. 7 (K) Conflicts of Interest Two of our Directors serve as Directors of other resource exploration companies. To the extent that such other companies may participate in ventures in which we 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 our engaging in transactions in which our Directors and Officers may have an interest. PLEASE REFER TO "ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS." (L) Currency Fluctuations We maintain our accounts in United States dollars. Our operations in Brazil and Canada make us subject to foreign currency fluctuations and such fluctuations may materially affect our financial position and results. At the present time we do not engage in hedging activities. ITEM 2. DESCRIPTION OF PROPERTY Our properties are in the preliminary exploration stage and do not contain any known bodies of ore. In February 1999, we acquired, by staking, a high grade limestone property three (3) square kilometres (741 acres) located on the north shore of Kumealon Inlet, 54 kilometres south-southeast of Prince Rupert, B.C. Canada. This property is highlighted by consistence of purity and whiteness of the limestone zone outcropping along the southwest shore of Kumealon Lagoon. The zone is comprised mostly of white, recrystallized, fine to course grained limestone, striking 150 degrees and can be traced for at least 1200 meters. The zone is estimated to have an average stratigraphic thickness of 180 meters. Chip samples taken across the zone averaged 55.06% CaO, 2.11% insolubles and 43.51% ignition loss. The zone is estimated to contain 19 million tonnes of high-grade limestone over a strike length of 1200 meters, with an average width of 180 meters and an average height above water of 30 meters. We plan to conduct a bedrock-sampling program in fiscal 2006. Subsequent to year-end we 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 our 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 our Santa Isabel property. The Sao Domingos property was a previous large alluvial operation, and the property area covers numerous areas of workings. At this stage, the Atacadao, Esmeril and Fofoca locations on the property are the focus of our current exploration programs. The three current target areas are 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 we are confident of the potential for further mineralisation at depth. 8 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 our 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 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 we decided not to follow-up our preliminary exploration program on the Novo Porto property and have decided not to exercise our option to acquire the property. 9 Ouro Mil The Ouro Mil property 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 our 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 We are not party to any litigation, and have no knowledge of any pending or threatened litigation against us. 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 II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Our Common Stock 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 (1) $- $- $- ------------------------------------------------------------------------------ 2006 - Low $0.69 (1) $- $- $- ------------------------------------------------------------------------------ 2005 - High $0.23 $0.12 $0.83 $0.73 ------------------------------------------------------------------------------ 2005 - Low $0.09 $0.06 $0.06 $0.47 ------------------------------------------------------------------------------ 2004 - High $0.51 $0.38 $0.31 $0.26 ------------------------------------------------------------------------------ 2004 - Low $0.20 $0.24 $0.17 $0.15 ------------------------------------------------------------------------------
Our 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". 10 (1) The high and low bid prices for our Common Stock for the First Quarter of 2006 were for the period January 1, 2006 to March 21, 2006. (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 our cash requirements. (d) Securities authorized for issuance under equity compensation plan: None We have 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, no common shares were issued. We believe 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 We are a mineral exploration company engaged in the exploration of base, precious metals and industrial minerals worldwide. We were incorporated under the laws of the State of Delaware on October 10, 1995, under the name "Chefs Acquisition Corp." We conduct our exploration and property acquisition activities through our head office which is located at 30 Ledgar Road, Balcatta, Western Australia, 6021 Australia. The telephone number is (+61 8) 9240-2836. Our Field office for 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. We had no revenues during fiscal 2005 and 2004. Funds raised in fiscal 2005 and 2004 were used for exploration of our 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 we recorded a loss of $457,271 or $0.02 per share, compared to a loss of $223,763 ($0.01 per share) in 2004. General and administrative expenses - For the year ended December 31, 2005 we recorded general and administrative expenses of $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). Exploration expenditures - For the year ended December 31, 2005 we 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). 11 Depreciation expense - For the year ended December 31, 2005 we recorded depreciation costs of $3,258 compared to $3,666 in fiscal 2004. (C) Capital Resources and Liquidity December 31, 2005 versus December 31, 2004: In fiscal 2005 we 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, we 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 we recorded a loss of $457,271 ($0.02 per share), compared to a loss of $223,763 ($0.01 per share) in 2004. Our general business strategy is to acquire mineral properties either directly or through the acquisition of operating entities. Our consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America and 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 financial statements, we have incurred recurring operating losses and require additional funds to meet our obligations and maintain our operations. Without cash flow from operations, we may need to obtain additional funds (presumably through equity offerings and/or debt borrowing) in order, if warranted, to implement additional exploration programs on our properties. Failure to obtain such additional financing may result in a reduction of our interest in certain properties or an actual foreclosure of its interest. We have no agreements or understandings with any person as to such additional financing. Our exploration properties have not commenced commercial production and we have no history of earnings or cash flow from its operations. While we 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 we intend 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. We will concentrate our 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. Our 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. We are setting up a field operations center at the Sao Domingos property and intend to initially focus exploration on anomalies associated with the Sao Domingos Property. Sao Domingo was selected based on the proximity to our other properties, and the logistics currently in place. Access to Sao Domingo is 12 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. We 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, we intend 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. We 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. Our 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 our financial statements requires us to use estimates and assumptions that affect the reported amounts of assets and liabilities as well as revenues and expenses. Our accounting policies are described in note 2 to its consolidated financial statements. Our accounting policies relating to depreciation and amortization of property, plant and equipment are critical accounting policies that are subject to estimates and assumptions regarding future activities. Our 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, we 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, we 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 our proportionate interest in such activities Generally accepted accounting principles require us to consider at the end of each accounting period whether or not there has been an impairment of the capitalized property, plant and equipment. This assessment is based on whether factors that may indicate the need for a write-down are present. If we determine there has been impairment, then we would be required to write-down the recorded value of our property, plant and equipment costs which would reduce our earnings and net assets. (E) Off-balance Sheet Arrangements and Contractual Obligations We do not have any off-balance sheet arrangements or contractual obligations that are likely to have or are reasonably likely to have a material current or future effect on our financial condition, changes in 13 financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in our financial statements. (F) Market Risk Disclosures We have 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) - ------------------------------------------------------------------------------------------------- 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) F-6 - --------------------------------------------------------------------------------------------------------------------- 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) ------------ 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) ------------ - ------------------------------------------------------------------------------------------------- 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) 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) F-7 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, 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) F-8 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) =================================================================================== ================== 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 No. 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 Financial Statements-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 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 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 our Accountants concerning accounting or financial disclosure. ITEM 8A. CONTROLS AND PROCEEDURES Within 90 days prior to the date of our Annual report on Form 10-KSB, we 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, our management, including the President and Chief Financial Officer, have concluded that our 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. ITEM 8B. OTHER INFORMATION. Not applicable. PART III 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 our executive officers and directors 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, our directors and executive officers were as follows:
Name and Address Age and Position - ---------------- ---------------- - -------------------------------------------------------------------------------------------------- Klaus P Eckhof Age 47, President, Chief Executive Officer and Director (July 5, 2005 30 Ledgar Road, Balcatta to present). Appointed President and Chief Executive Officer on WA 6021, Australia February 27, 2006. - -------------------------------------------------------------------------------------------------- A. Cameron Richardson Age 52, Chief Financial Officer (April 1998 to present), Chief 2 - 238 West 4th Street, Accounting Officer (June 1997 to present) and Director (May 4, 2001 North Vancouver, B.C., to present); Secretary (April 1998 to present). Resigned as President Canada V7M 1H7 (May 4, 2001 to February 27, 2006) on February 27, 2006 - -------------------------------------------------------------------------------------------------- Antonino G. Cacace Age 59, Director since October 1995. Crud-y-Gloyat, Carswell Bay Swansea Wales, U.K. - --------------------------------------------------------------------------------------------------
15 The following is a description of the employment history for each of our directors and officers for the last five years: 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). Chief Financial Officer of Aurora Gold Corporation (April 1998 to present), Chief Accounting Officer (June 1997 to present) and President (May 4, 2001 to February 27, 2006). 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. During the past five years none of our directors, executive officers, promoters or control persons has been: (a) the subject of any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time; (b) convicted in a criminal proceeding or is subject to a pending criminal proceeding (excluding traffic violations and other minor offenses); (c) subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or (d) found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law. There are no family relationships between any of the directors or executive officers. Antonino G. Cacace is the independent audit committee financial expert serving on our audit committee. During the fiscal year ending December 31, 2005 the entire board of directors acted as our compensation committee and 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 our officers and directors, and persons who have more than ten percent of a registered class of our 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 us 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, we believe that during the fiscal year ended December 31, 2005 all filings requirements applicable to its officers, directors and greater than ten percent beneficial owners were complied with. 16 We have adopted a code of ethics that applies to our principal executive officer, principal financial officer and principal accounting officer. A copy of our 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:
- ----------------------------------------------------------------------------------------------------- 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 ($) ($) ($) ($) (#) ($) ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) - ----------------------------------------------------------------------------------------------------- Cameron Richardson 2005 2,728 -0- -0- None None None -0- President and --------------------------------------------------------------------------------- Director 2004 -0- -0- -0- None None None -0- --------------------------------------------------------------------------------- 2003 -0- -0- -0- None None None -0- - ----------------------------------------------------------------------------------------------------- Klaus Eckhof 2005 7,682 -0- -0- None None None -0- Director --------------------------------------------------------------------------------- 2004 -0- -0- -0- None None None -0- --------------------------------------------------------------------------------- 2003 -0- -0- -0- None None None -0- - -----------------------------------------------------------------------------------------------------
None of our officers or directors was party to an employment agreement with us. During the fiscal year ending December 31, 2005 the entire board of directors acted as our compensation committee and audit committee. (B) Options/SAR Grants Table The following table sets forth information concerning individual grants of stock options (whether or not in tandem with stock appreciation rights ("SARs")) and freestanding SARs made during the last completed fiscal year to each of the named executive officers;
- ---------------------------------------------------------------------------------- Option/SAR Grants in Last Fiscal Year (Individual Grants) - ---------------------------------------------------------------------------------- Percent Of Number of Total Options/ Securities SARs Granted Underlying To Employees Exercise Or Expiration Option/SARs In Fiscal Base Price Date Name Granted (#) Year ($/Sh) (M/D/Y) (a) (b) (c) (d) (e) - ---------------------------------------------------------------------------------- Cameron Richardson (1) None 0% $0 - ----------------------- Klaus Eckhof (1) None 0% $0 - ----------------------------------------------------------------------------------
17 Note 1. No options were awarded in 2005 or 2004. (C) Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR Value Table The following table sets forth information concerning each exercise of stock options (or tandem SARs) and freestanding SARs during the last completed fiscal year by each of the named executive officers and the fiscal year-end value of unexercised options and SARs, on an aggregated basis:
- --------------------------------------------------------------------------------- AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES - --------------------------------------------------------------------------------- Number of Securities Value Of Underlying Unexercised Unexercised In-The-Money Shares Options/SARs Options/SARs Acquired Value At FY-End ($) 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 We do not have a Long-term Incentive Plan. (E) Compensation of Directors We do not pay a fee to its outside, non-officer directors. We reimburse our 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 our officers or directors was party to an employment agreement with us. (G) Report on reprising of options/SARs At no time during the last completed fiscal year did we, while a reporting issuer 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 our Common Stock as of March 13, 2006 by (i) each person who is known by us to own beneficially more than five percent (5%) of our outstanding Common Stock; (ii) each of our directors and officers; and (iii) all our 18 directors and officers as a group. As at March 13, 2006 there were 44,218,522 shares of Common Stock issued and outstanding. (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) 0 * 2- 238 West 4th Street, North Vancouver, British Columbia, 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 19 (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 our control. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Our proposed business raises potential conflicts of interests between us and certain of our officers and directors. There have been no transactions during the last two years, or proposed transactions, to which we were or are a party, in which any of our directors or executive officers had or has a direct or indirect material interest. Certain of our directors are directors of other mineral resource companies and, to the extent that such other companies may participate in ventures in which we may participate, our directors may have a conflict of interest in negotiating and concluding terms regarding the extent of such participation. In the event that such a conflict of interest arises at a meeting of our directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases, we will establish a special committee of independent directors to review a matter in which several directors, or Management, may have a conflict. From time to time, several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, involvement in a greater number of programs and reduction of the financial exposure with respect to any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In determining whether we will participate in a particular program and the interest therein to be acquired by us, our directors will primarily consider the potential benefits to us, the degree of risk to which we may be exposed and its financial position at that time. Other than as indicated we have no other procedures or mechanisms to deal with conflicts of interest. We are not aware of the existence of any conflict of interest as described herein. There have been no transactions or proposed transactions with promoters during the last two years to which we are or were a party. ITEM 13. EXHIBITS
(A) Exhibits 3.1.1 Certificate of Incorporation. (1) . 3.1.2 Certificate of Amendment to the Certificate of Incorporation. (1) 3.1.3 Certificate of Restoration and Renewal of Certificate of Incorporation. (1) 3.2.1 By-laws. (1) 3.2.2 Amended and Restated By-laws. (1) 10.1.1 Consulting Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation. (2) 10.1.2 Confidentiality Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation. (2) 10.2.1 Assignment of Novo Porto and Santa Clara Memorandum of Understanding to Aurora Gold Corporation. (2) 10.2.2 Novo Porto Memorandum of Understanding. (2) 10.2.3 Declaration of Translator for translation of Novo Porto Memorandum of Understanding from Portuguese to English. (2) 10.2.4 Novo Porto Option Agreement. (*) 10.2.5 Declaration of Translator for translation of Novo Porto Option Agreement from Portuguese to English. (*) 20 10.2.6 Santa Clara Memorandum of Understanding. (2) 10.2.7 Declaration of Translator for translation of Santa Clara Memorandum of Understanding from Portuguese to English. (2) 10.3.1 Assignment of Ouro Mil Memorandum of Understanding to Aurora Gold Corporation. (2) 10.3.2 Ouro Mil Memorandum of Understanding. (2) 10.3.3 Declaration of Translator for translation of Ouro Mil Memorandum of Understanding from Portuguese to English. (2) 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. (2) 10.4.2 Sao Domingos Memorandum of Understanding. (2) 10.4.3 Declaration of Translator for translation of Sao Domingos Memorandum of Understanding from Portuguese to English. (2) 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. (3) 16.2 Letter on change in certifying accountant. (4) 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. (5)
- -------- 1. Incorporated by reference from Form 10SB12G filed on June 4, 1998 2. Incorporated by reference from Form SB-2 filed December 16, 2005 3. Incorporated by reference from Form 8-K filed on May 16, 2000 4. Incorporated by reference from Form 8-K filed on February 8, 2006 5. Incorporated by reference from Form 10-KSB filed on March 25, 2004 * Previously filed ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES Audit Fees: The aggregate fees billed for professional services by Moore Stephens Ellis Foster Ltd. for the audit of our annual financial statements and review of financial statements included in our Form 10-QSB (17 CFR 249.308b) or services that were normally provided by the accountant in connection with statutory and regulatory filings or engagements during the 2005 fiscal year were $10,234 (2004 - - $5,000). Audit-Related Fees: 21 The aggregate fees billed to us for assurance and related services by Moore Stephens Ellis Foster Ltd. that are reasonably related to the performance of the audit or review of our financial statements and are not reported under audit fees for fiscal 2005 were $0 (2004- $0). Tax Fees: The aggregate fees billed to us for professional services by Moore Stephens Ellis Foster Ltd. for tax compliance, tax advice and tax planning for fiscal 2005 were $0 (2004 - $0). All Other Fees: The aggregate fees billed to us for products and services provided by Moore Stephens Ellis Foster Ltd., other than reported under Audit Fees, Audit-Related Fees and Tax Fees for fiscal 2005 were $0 (2004 - $0). The Audit Committee feels that the services rendered by Moore Stephens Ellis Foster Ltd. were 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: April 12, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof Director Date: April 12, 2006 BY: /s/ Cameron Richardson -------------- --------------------- Cameron Richardson Director 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: April 12, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President, Chief Executive Officer and Director Date: April 12, 2006 BY: /s/ Cameron Richardson -------------- ---------------------- Cameron Richardson Chief Financial Officer and Director 22 EX-31.1 2 ex31_1.txt EXHIBIT 31.1 Exhibit 31.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, 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: April 12, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President and Chief Executive Officer EX-31.2 3 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: April 12, 2006 BY: /s/ A. Cameron Richardson -------------- ------------------------- A. Cameron Richardson Chief Financial Officer EX-32.1 4 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: April 12, 2006 BY: /s/ Klaus Eckhof -------------- ---------------- Klaus Eckhof President and Chief Executive Officer This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. EX-32.2 5 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: April 12, 2006 BY: /s/ Cameron Richardson -------------- ---------------------- Cameron Richardson Chief Financial Officer This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----