UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2012
x QUARTERLY REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
¨ TRANSITION REPORT UNDER SECTION 13 0R 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission file number 0-24393
AURORA GOLD CORPORATION
(Exact name of registrant as specified in its charter)
Incorporated in the State of Delaware
(State or other jurisdiction of incorporation or organization)
13-3945947
(I.R.S. Employer Identification No.)
Coresco AG, Level 3, Gotthardstrasse 20, 6304 Zug, Switzerland
(Address of principal executive offices)
+41 7887 96966
(Issuer’s telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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.
x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Larger accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company x
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes x No
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at May 14, 2012 |
| Common Stock - $0.001 par value | 111,903,489 |
This quarterly report contains statements that plan for or anticipate the future and are not historical facts. In this Report these forward looking statements are generally identified by words such as “anticipate,” “plan,” “believe,” “expect,” “estimate,” and the like. Because forward looking statements involve future risks and uncertainties, these are factors that could cause actual results to differ materially from the estimated results. These risks and uncertainties are detailed in this report.
The Private Securities Litigation Reform Act of 1995, which provides a “safe harbor” for such statements, may not apply to this Report.
| INDEX | ||
| PART I – FINANCIAL INFORMATION | 3 | |
| ITEM 1 – FINANCIAL STATEMENTS | 3 | |
| CONSOLIDATED BALANCE SHEETS | 3 | |
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | 4 | |
| CONSOLIDATED STATEMENTS OF CASH FLOWS | 5 | |
| CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY) | 6 | |
| NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | 10 | |
| ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | 20 | |
| ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 27 | |
| ITEM 4 – CONTROLS AND PROCEDURES | 27 | |
| PART II – OTHER INFORMATION | 28 | |
| ITEM 1 – LEGAL PROCEEDINGS | 28 | |
| ITEM 1A – RISK FACTORS | 28 | |
| ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | 28 | |
| ITEM 3 – DEFAULTS UPON SENIOR SECURITIES | 28 | |
| ITEM 4 – MINING SAFETY DISCLOSURES | 28 | |
| ITEM 5 – OTHER INFORMATION | 28 | |
| ITEM 6 – EXHIBITS | 28 | |
| SIGNATURES | 31 |
| 2 | AURORA GOLD CORPORATION |
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
| AURORA GOLD CORPORATION | ||||||||
| (An exploration stage enterprise) | As at | As at | ||||||
| Consolidated Balance Sheets | March 31 | December 31 | ||||||
| 2012 (Unaudited) | 2011 | |||||||
| (Expressed in U.S. Dollars) | $ | $ | ||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash | 81,828 | 237,426 | ||||||
| Total current assets | 81,828 | 237,426 | ||||||
| Total assets (all current) | 81,828 | 237,426 | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | 433,862 | 400,644 | ||||||
| Advances payable | - | 45,000 | ||||||
| Advances payable – related party | 32,000 | 92,000 | ||||||
| Total current liabilities | 465,862 | 537,644 | ||||||
| Stockholders’ Equity (Deficiency) | ||||||||
| Common stock | ||||||||
| Authorized: 300,000,000 (December 31, 2011: 300,000,000) common shares with par value of $0.001 each | ||||||||
| Issued and outstanding: | ||||||||
| 111,903,489 (December 31, 2011: 109,912,589) common shares | 111,904 | 109,913 | ||||||
| Advances for stock subscriptions | 37,513 | 20,000 | ||||||
| Additional paid-in capital | 22,202,138 | 22,040,994 | ||||||
| Accumulated deficit during the exploration stage | (22,646,410 | ) | (22,400,600 | ) | ||||
| Accumulated other comprehensive income (loss) | (89,179 | ) | (70,525 | ) | ||||
| Stockholder’ equity (deficiency) | (384,034 | ) | (300,218 | ) | ||||
| Total liabilities and stockholders’ equity (deficiency) | 81,828 | 237,426 | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 3 | AURORA GOLD CORPORATION |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| AURORA GOLD CORPORATION | Cumulative | For the | For the | |||||||||
| (An exploration stage enterprise) | October 19, 1995 | Three Months | Three Months | |||||||||
| Consolidated Statements of Comprehensive | (inception) | Ended | Ended | |||||||||
| Income (Loss) | to March 31 | March 31 | March 31 | |||||||||
| (Unaudited) | 2012 | 2012 | 2011 | |||||||||
| (Expressed in U.S. Dollars) | $ | $ | $ | |||||||||
| Operating Expenses | ||||||||||||
| General and administrative | 2,425,587 | 88,673 | 54,738 | |||||||||
| Depreciation and amortization | 145,126 | - | 5,101 | |||||||||
| Imputed interest on loan payable – related party | 1,560 | - | - | |||||||||
| Interest and bank charges | 394,119 | (138 | ) | 2,750 | ||||||||
| Foreign exchange loss (gain) | (13,756 | ) | 1,563 | 594 | ||||||||
| Professional fees – accounting and legal | 1,816,207 | 8,171 | 35,958 | |||||||||
| Property search and negotiation | 479,695 | - | - | |||||||||
| Salaries, management and consulting fees | 3,590,432 | 119,259 | 116,009 | |||||||||
| Exploration expenses | 9,759,621 | 28,282 | 169,551 | |||||||||
| Write-off of equipment | 240,338 | - | - | |||||||||
| 18,838,929 | 245,810 | 384,701 | ||||||||||
| Other income (loss) | ||||||||||||
| Gain (loss) on disposition of subsidiary | (2,541,037 | ) | - | - | ||||||||
| Interest income | 22,353 | - | - | |||||||||
| Gain on sale of rights to Matupa agreement (net) | 80,237 | - | - | |||||||||
| Loss on investments | (37,971 | ) | - | - | ||||||||
| Loss on spun-off operations | (316,598 | ) | - | - | ||||||||
| Loss on debt extinguishment | (1,014,465 | ) | - | - | ||||||||
| (3,807,481 | ) | - | - | |||||||||
| Net Loss | (22,646,410 | ) | (245,810 | ) | (384,701 | ) | ||||||
| Other comprehensive income (loss) | ||||||||||||
| Foreign currency translation adjustments | (18,654 | ) | 420 | |||||||||
| Comprehensive income (loss) | (264,464 | ) | (384,281 | ) | ||||||||
| Net Loss Per Share – Basic and Diluted | * | * | ||||||||||
| Weighted Average Shares Outstanding – Basic and Diluted | 110,284,515 | 88,703,868 | ||||||||||
* amount is less than $(0.01) per share
The accompanying notes are an integral part of these consolidated financial statements.
| 4 | AURORA GOLD CORPORATION |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| AURORA GOLD CORPORATION | Cumulative | For the | For the | |||||||||
| (An exploration stage enterprise) | October 19, 1995 | Three Months | Three Months | |||||||||
| Consolidated Statements of Cash Flows | (inception) | Ended | Ended | |||||||||
| to March 31 | March 31 | March 31 | ||||||||||
| (Unaudited) | 2012 | 2012 | 2011 | |||||||||
| (Expressed in U.S. Dollars) | $ | $ | $ | |||||||||
| Cash Flows From Operating Activities | ||||||||||||
| Net loss for the period | (22,646,410 | ) | (245,810 | ) | (384,701 | ) | ||||||
| Adjustments to reconcile net loss to cash used in operating activities | ||||||||||||
| Depreciation and amortization | 145,126 | - | 5,101 | |||||||||
| Stock compensation expense on stock option grants | 1,612,033 | 43,681 | - | |||||||||
| Expenses satisfied with issuance of common stock | 1,202,054 | - | - | |||||||||
| Expenses satisfied with transfer of marketable securities | 33,903 | - | - | |||||||||
| Imputed interest on loan payable - related parties | 1,560 | - | - | |||||||||
| Write-off of mineral property assets | 240,338 | - | - | |||||||||
| Adjustment for spin-off of Aurora Metals (BVI) Limited | 316,498 | - | - | |||||||||
| Loss on disposal of subsidiary | 2,757,511 | - | - | |||||||||
| Realized loss on investments | 37,971 | - | - | |||||||||
| Gain on sale of rights to Matupa agreement (net) | (80,237 | ) | - | - | ||||||||
| Realized loss on debt extinguishment | 1,014,465 | - | - | |||||||||
| Foreign exchange (gain) loss related to notes payable | (24,534 | ) | - | - | ||||||||
| Change in operating assets and liabilities | ||||||||||||
| Decrease (Increase) in receivables and other assets | (206,978 | ) | - | - | ||||||||
| (Increase) decrease in prepaid expenses and other assets | (20,459 | ) | - | (22,720 | ) | |||||||
| Increase (decrease) in accounts payable and accrued expenses (including related party) | 1,137,210 | 30,159 | (41,938 | ) | ||||||||
| Net Cash Used in Operating Activities | (14,479,949 | ) | (171,970 | ) | (444,258 | ) | ||||||
| Cash Flows From Investing Activities | ||||||||||||
| Purchase of equipment | (205,348 | ) | - | - | ||||||||
| Proceeds on disposal of equipment | 16,761 | - | - | |||||||||
| Payment for mineral property Reclamation Bonds | (245,221 | ) | - | - | ||||||||
| Proceeds from disposition of marketable securities | 32,850 | - | - | |||||||||
| Acquisition of mineral property costs and related equipment | (672,981 | ) | - | - | ||||||||
| Payment for incorporation cost | (11,511 | ) | - | - | ||||||||
| Net Cash Used in Investing Activities | (1,085,450 | ) | - | - | ||||||||
| Cash Flows From Financing Activities | ||||||||||||
| Proceeds from common stock less issuance costs | 14,061,952 | 17,513 | - | |||||||||
| Loan proceeds from related party | 289,000 | - | - | |||||||||
| Net proceeds from (payments on) convertible notes and loans | 969,252 | - | - | |||||||||
| Net proceeds from (payments on) advances payable | 45,000 | - | - | |||||||||
| Net proceeds from (payments on) advances payable – related parties | 92,000 | - | - | |||||||||
| Net Cash Provided by Financing Activities | 15,457,204 | 17,513 | - | |||||||||
| Effect of Exchange Rate Changes on Cash | 190,023 | (1,141 | ) | 319 | ||||||||
| (Decrease) Increase in Cash | 81,828 | (155,598 | ) | (443,939 | ) | |||||||
| Cash at Beginning of Period | - | 237,426 | 579,191 | |||||||||
| Cash at End of Period | 81,828 | 81,828 | 135,252 | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 | AURORA GOLD CORPORATION |
CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY (DEFICIENCY)
| AURORA GOLD INCORPORATED | Accumulated | Accumulated | Total | |||||||||||||||||||||||||
| (An exploration stage enterprise) | Additional | Advances for | (deficit) during | other | stockholders' | |||||||||||||||||||||||
| Consolidated Statements of Stockholder’s Equity (Deficiency) | Common Stock | paid-in | Stock | Exploration | comprehensive | equity | ||||||||||||||||||||||
| October 19, 1995 (inception) to March 31, 2012 | Shares | Amount | capital | Subscriptions | Stage | income (loss) | (deficiency) | |||||||||||||||||||||
| (Expressed in U.S. Dollars) | # | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Balance, October 10, 1995 | - | - | - | - | - | - | - | |||||||||||||||||||||
| Issuance of common stock for settlement of indebtedness | 11,461,153 | 11,461 | - | - | - | - | 11,461 | |||||||||||||||||||||
| Net (loss) for the period | - | - | - | - | - | |||||||||||||||||||||||
| Balance December 31, 1995 | 11,461,153 | 11,461 | - | - | - | - | 11,461 | |||||||||||||||||||||
| Adjustment for reverse stock split | (7,640,766 | ) | (7,641 | ) | - | - | - | - | (7,641 | ) | ||||||||||||||||||
| Issuance of common stock for - cash at $0.001 per share | 5,800,000 | 5,800 | 341,761 | - | - | - | 347,561 | |||||||||||||||||||||
| - resource property | 300,000 | 300 | 2,700 | - | - | - | 3,000 | |||||||||||||||||||||
| Net (loss) for the period | (361,208 | ) | - | (361,208 | ) | |||||||||||||||||||||||
| Balance December 31, 1996 | 9,920,387 | 9,920 | 344,461 | (361,208 | ) | - | (6,827 | ) | ||||||||||||||||||||
| 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 | - | - | - | 745,158 | |||||||||||||||||||||
| Net (loss) for the period | - | (615,880 | ) | - | (615,880 | ) | ||||||||||||||||||||||
| Balance December 31, 1997 | 10,670,387 | 10,670 | 1,088,869 | - | (977,088 | ) | - | 122,451 | ||||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - settlement of indebtedness | 96,105 | 96 | 68,601 | - | - | - | 68,697 | |||||||||||||||||||||
| - cash in May 1998 at $1.25 per share | 200,000 | 200 | 249,800 | - | - | - | 250,000 | |||||||||||||||||||||
| - cash in November 1998 at $0.75 per share | 71,667 | 72 | 53,678 | - | - | - | 53,750 | |||||||||||||||||||||
| - cash in December 1998 at $0.75 per share | 143,333 | 143 | 107,357 | - | - | - | 107,500 | |||||||||||||||||||||
| Grant of options to employees and directors | 518,900 | - | - | - | 518,900 | |||||||||||||||||||||||
| Grant of options to consultants | 172,100 | - | - | - | 172,100 | |||||||||||||||||||||||
| Net (loss) for the period | - | (1,151,604 | ) | - | (1,151,604 | ) | ||||||||||||||||||||||
| Balance December 31, 1998 | 11,181,492 | 11,181 | 2,259,304 | - | (2,128,692 | ) | - | 141,794 | ||||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - settlement of indebtedness | 231,286 | 231 | 160,151 | - | - | - | 160,382 | |||||||||||||||||||||
| - cash in March 1999 at $0.656 per share | 22,871 | 23 | 14,977 | - | - | - | 15,000 | |||||||||||||||||||||
| - finder's fee in February 1999 at $0.81 per share | 25,000 | 25 | 20,287 | - | - | - | 20,312 | |||||||||||||||||||||
| Grant of options to consultants | 29,500 | - | - | - | 29,500 | |||||||||||||||||||||||
| Cash advanced on stock subscriptions | 425,000 | - | 425,000 | |||||||||||||||||||||||||
| Net (loss) for the period | - | (855,391 | ) | - | (855,391 | ) | ||||||||||||||||||||||
| Balance December 31, 1999 | 11,460,649 | 11,461 | 2,484,219 | 425,000 | (2,984,083 | ) | - | (63,403 | ) | |||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - settlement of indebtedness | 199,000 | 199 | 99,301 | - | - | - | 99,500 | |||||||||||||||||||||
| - cash in March 2000 at $0.50 per share | 350,000 | 350 | 174,650 | (175,000 | ) | - | - | - | ||||||||||||||||||||
| - cash in March 2000 at $0.455 per share | 550,000 | 550 | 249,450 | (250,000 | ) | - | - | - | ||||||||||||||||||||
| Cancellation of shares in April 2000 | (90,706 | ) | (91 | ) | (56,600 | ) | - | - | - | (56,691 | ) | |||||||||||||||||
| Exercise of options in June 2000 | 405,000 | 405 | 3,645 | - | - | - | 4,050 | |||||||||||||||||||||
| Spin-off of Aurora Metals (BVI) Limited | 316,498 | - | - | - | 316,498 | |||||||||||||||||||||||
| Net (loss) for the period | - | (677,705 | ) | - | (677,705 | ) | ||||||||||||||||||||||
| Balance December 31, 2000 | 12,873,943 | 12,874 | 3,271,163 | - | (3,661,788 | ) | - | (377,751 | ) | |||||||||||||||||||
| - Net income for the period | - | 128,545 | - | 128,545 | ||||||||||||||||||||||||
| 6 | AURORA GOLD CORPORATION |
| AURORA GOLD INCORPORATED | Accumulated | Accumulated | Total | |||||||||||||||||||||||||
| (An exploration stage enterprise) | Additional | Advances for | (deficit) during | other | stockholders' | |||||||||||||||||||||||
| Consolidated Statements of Stockholder’s Equity (Deficiency) | Common Stock | paid-in | Stock | Exploration | comprehensive | equity | ||||||||||||||||||||||
| October 19, 1995 (inception) to March 31, 2012 | Shares | Amount | capital | Subscriptions | Stage | income (loss) | (deficiency) | |||||||||||||||||||||
| (Expressed in U.S. Dollars) | # | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| - Unrealized holding losses on available-for-sale securities | - | - | (141,928 | ) | (141,928 | ) | ||||||||||||||||||||||
| Balance December 31, 2001 | 12,873,943 | 12,874 | 3,271,163 | - | (3,533,243 | ) | (141,928 | ) | (391,134 | ) | ||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - settlement of indebtedness | 3,708,038 | 3,708 | 351,492 | - | - | - | 355,200 | |||||||||||||||||||||
| - Net loss for the period | - | (137,329 | ) | - | (137,329 | ) | ||||||||||||||||||||||
| - Unrealized holding losses on available-for-sale securities | - | - | 141,928 | 141,928 | ||||||||||||||||||||||||
| Balance, December 31, 2002 | 16,581,981 | 16,582 | 3,622,655 | - | (3,670,572 | ) | - | (31,335 | ) | |||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - settlement of indebtedness | 2,752,450 | 2,752 | 114,806 | - | - | - | 117,558 | |||||||||||||||||||||
| - cash in December 2003 at $0.25 per share | 100,000 | 100 | 24,900 | - | - | - | 25,000 | |||||||||||||||||||||
| - Net loss for the period | - | (96,404 | ) | - | (96,404 | ) | ||||||||||||||||||||||
| - Unrealized holding losses on available-for-sale securities | - | - | - | - | ||||||||||||||||||||||||
| Balance, December 31, 2003 | 19,434,431 | 19,434 | 3,762,361 | - | (3,766,976 | ) | - | 14,819 | ||||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - cash in January 2004 at $0.25 per share, less issuance costs | 100,000 | 100 | 22,400 | - | - | - | 22,500 | |||||||||||||||||||||
| Imputed interest | 1,560 | - | - | - | 1,560 | |||||||||||||||||||||||
| - Net loss for the period | - | (223,763 | ) | - | (223,763 | ) | ||||||||||||||||||||||
| - Unrealized holding losses on available-for-sale securities | - | - | - | - | ||||||||||||||||||||||||
| Balance, December 31, 2004 | 19,534,431 | 19,534 | 3,786,321 | - | (3,990,739 | ) | - | (184,884 | ) | |||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - cash in July 2005 at $0.05 per share | 13,000,000 | 13,000 | 637,000 | - | - | - | 650,000 | |||||||||||||||||||||
| - settlement of indebtedness | 3,684,091 | 3,684 | 158,816 | - | - | - | 162,500 | |||||||||||||||||||||
| - Net (loss) for the period | - | (457,271 | ) | - | (457,271 | ) | ||||||||||||||||||||||
| - Unrealized holding losses on available-for-sale securities | - | - | (4,614 | ) | (4,614 | ) | ||||||||||||||||||||||
| Balance, December 31, 2005 | 36,218,522 | 36,218 | 4,582,137 | - | (4,448,010 | ) | (4,614 | ) | 165,731 | |||||||||||||||||||
| Issuance of common stock for - cash in February 2006 at $0.50 per share less issuance costs of $110,000: | 8,000,000 | 8,000 | 3,882,000 | - | - | - | 3,890,000 | |||||||||||||||||||||
| - non cash finder's fee in December 200 at $0.70 per share | 250,000 | 250 | 174,750 | - | - | - | 175,000 | |||||||||||||||||||||
| - cash in December 2006 at $0.50 per share | 1,000,000 | 1,000 | 499,000 | - | - | - | 500,000 | |||||||||||||||||||||
| - Net (loss) for the period | - | (5,463,855 | ) | - | (5,463,855 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | (3,692 | ) | (3,692 | ) | ||||||||||||||||||||||
| - Reclassification adjustment for losses on available-for-sale securities included in net loss | - | - | 4,614 | 4,614 | ||||||||||||||||||||||||
| Balance, December 31, 2006 | 45,468,522 | 45,468 | 9,137,887 | - | (9,911,865 | ) | (3,692 | ) | (732,202 | ) | ||||||||||||||||||
| Issuance of common stock for: | ||||||||||||||||||||||||||||
| - cash in March 2007 at $0.50 per share | 500,000 | 500 | 249,500 | - | - | - | 250,000 | |||||||||||||||||||||
| - cash in July 2007 at $0.25 per share | 5,000,000 | 5,000 | 1,245,000 | - | - | - | 1,250,000 | |||||||||||||||||||||
| - settlement of indebtedness in August 2007 at $0.20 per share | 250,000 | 250 | 49,750 | - | - | - | 50,000 | |||||||||||||||||||||
| - cash in September 2007 at $0.20 per share | 4,000,000 | 4,000 | 796,000 | - | - | - | 800,000 | |||||||||||||||||||||
| Stock option compensation expense | 454,295 | - | - | - | 454,295 | |||||||||||||||||||||||
| - Net (loss) for the period | - | (3,259,732 | ) | - | (3,259,732 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | (65,255 | ) | (65,255 | ) | ||||||||||||||||||||||
| Balance, December 31, 2007 | 55,218,522 | 55,218 | 11,932,432 | - | (13,171,597 | ) | (68,947 | ) | (1,252,894 | ) | ||||||||||||||||||
| 7 | AURORA GOLD CORPORATION |
| AURORA GOLD INCORPORATED | Accumulated | Accumulated | Total | |||||||||||||||||||||||||
| (An exploration stage enterprise) | Additional | Advances for | (deficit) during | other | stockholders' | |||||||||||||||||||||||
| Consolidated Statements of Stockholder’s Equity (Deficiency) | Common Stock | paid-in | Stock | Exploration | comprehensive | equity | ||||||||||||||||||||||
| October 19, 1995 (inception) to March 31, 2012 | Shares | Amount | capital | Subscriptions | Stage | income (loss) | (deficiency) | |||||||||||||||||||||
| (Expressed in U.S. Dollars) | # | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| - Issuance of common stock for - non cash finder's fee in July 2008 at $0.10 per share | 250,000 | 250 | 24,750 | - | - | - | 25,000 | |||||||||||||||||||||
| - settlement of indebtedness in December2008 at $0.06 per share | 2,603,333 | 2,603 | 153,597 | - | - | - | 156,200 | |||||||||||||||||||||
| - Net (loss) for the period | - | (520,105 | ) | - | (520,105 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | 36,259 | 36,259 | ||||||||||||||||||||||||
| Balance, December 31, 2008 | 58,071,855 | 58,071 | 12,110,779 | - | (13,691,702 | ) | (32,688 | ) | (1,555,540 | ) | ||||||||||||||||||
| - Issuance of common stock for - settlement of indebtedness in September 2009 at $0.15 per share | 5,000,000 | 5,000 | 1,748,616 | - | - | - | 1,753,616 | |||||||||||||||||||||
| - cash in September 2009 at $0.10 per share less finder's fee | 3,000,000 | 3,000 | 255,000 | - | - | - | 258,000 | |||||||||||||||||||||
| - non cash finder's fee September 2009 at $0.10 per share | 420,000 | 420 | 41,580 | - | - | - | 42,000 | |||||||||||||||||||||
| - settlement of indebtedness in November 2009 at $0.18 per share | 100,000 | 100 | 17,899 | - | - | - | 17,999 | |||||||||||||||||||||
| - settlement of indebtedness in November 2009 at $0.24 per share | 150,000 | 150 | 35,611 | - | - | - | 35,761 | |||||||||||||||||||||
| - cash in December 2009 at $0.30 per share | 1,666,667 | 1,667 | 498,333 | - | - | - | 500,000 | |||||||||||||||||||||
| - Net (loss) for the period | - | (1,779,477 | ) | - | (1,779,477 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | (60,171 | ) | (60,171 | ) | ||||||||||||||||||||||
| Balance, December 31, 2009 | 68,408,522 | 68,408 | 14,707,818 | - | (15,471,179 | ) | (92,859 | ) | (787,812 | ) | ||||||||||||||||||
| - Issuance of common stock for cash in April 2010 at $0.30 per share less finder's fee (paid with 1,126,111 shares included herein) | 14,109,446 | 14,110 | 3,880,890 | - | - | - | 3,895,000 | |||||||||||||||||||||
| - non cash property acquisition in June 2010 at $0.40 per share | 5,000,000 | 5,000 | 1,995,000 | - | - | - | 2,000,000 | |||||||||||||||||||||
| - settlement of indebtedness in September 2010 at $0.30 per share | 160,500 | 161 | 47,989 | - | - | - | 48,150 | |||||||||||||||||||||
| - settlement of indebtedness in September 2010 at $0.30 per share | 325,400 | 325 | 97,295 | - | - | - | 97,620 | |||||||||||||||||||||
| - payment of expenses in September 2010 at $0.30 per share | 200,000 | 200 | 59,800 | - | - | - | 60,000 | |||||||||||||||||||||
| - non cash finder's fee in September 2010 related to the June 2010 property acquisition at $0.30 per share | 500,000 | 500 | 149,500 | - | - | - | 150,000 | |||||||||||||||||||||
| - Net (loss) for the period | - | (2,302,083 | ) | - | (2,302,083 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | (198 | ) | (198 | ) | ||||||||||||||||||||||
| Balance, December 31, 2010 | 88,703,868 | 88,704 | 20,938,292 | - | (17,773,262 | ) | (93,057 | ) | 3,160,677 | |||||||||||||||||||
| -Issuance of common stock for non cash finder’s fee in May 2011 at $0.042 per share | 450,000 | 450 | (450 | ) | - | - | - | - | ||||||||||||||||||||
| -Issuance of common stock for cash in September 2011 at $0.10 per share | 1,671,000 | 1,671 | 165,429 | - | - | - | 167,100 | |||||||||||||||||||||
| -Issuance of common stock for settlement of indebtedness in September 2011 at $0.16 per share | 150,000 | 150 | 24,350 | - | - | - | 24,500 | |||||||||||||||||||||
| -Issuance of common stock for settlement of indebtedness in December 2011 at $0.02 per share | 10,937,721 | 10,938 | 207,816 | 218,754 | ||||||||||||||||||||||||
| -Issuance of common stock for cash in December 2011 at $0.04 per share | 8,000,000 | 8,000 | 312,000 | 320,000 | ||||||||||||||||||||||||
| 8 | AURORA GOLD CORPORATION |
| AURORA GOLD INCORPORATED | Accumulated | Accumulated | Total | |||||||||||||||||||||||||
| (An exploration stage enterprise) | Additional | Advances for | (deficit) during | other | stockholders' | |||||||||||||||||||||||
| Consolidated Statements of Stockholder’s Equity (Deficiency) | Common Stock | paid-in | Stock | Exploration | comprehensive | equity | ||||||||||||||||||||||
| October 19, 1995 (inception) to March 31, 2012 | Shares | Amount | capital | Subscriptions | Stage | income (loss) | (deficiency) | |||||||||||||||||||||
| (Expressed in U.S. Dollars) | # | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| -Issuance of common stock for cash in December 2011 at $0.04 per share - oversubscribed | 20,000 | 20,000 | ||||||||||||||||||||||||||
| -Stock option compensation expense | 393,557 | 393,557 | ||||||||||||||||||||||||||
| - Net (loss) for the period | - | (4,627,338 | ) | - | (4,627,338 | ) | ||||||||||||||||||||||
| - Foreign currency translation adjustments | - | - | 22,532 | 22,532 | ||||||||||||||||||||||||
| Balance, December 31, 2011 | 109,912,589 | 109,913 | 22,040,994 | 20,000 | (22,400,600 | ) | (70,525 | ) | (300,218 | ) | ||||||||||||||||||
| Issuance of common stock for settlement of indebtedness in March 2012 at $0.06 per share | 1,990,900 | 1,991 | 117,463 | 119,454 | ||||||||||||||||||||||||
| Issuance of common stock for cash in March 2012 at $0.06 per share – shares not issued as at March 31, 2012 | 17,513 | 17,513 | ||||||||||||||||||||||||||
| Stock option compensation expense | 43,681 | 43,681 | ||||||||||||||||||||||||||
| - Net (loss) for the period | (245,810 | ) | (245,810 | ) | ||||||||||||||||||||||||
| - Foreign currency translation adjustments | (18,654 | ) | (18,654 | ) | ||||||||||||||||||||||||
| Balance, March 31, 2012 | 111,903,489 | 111,904 | 22,202,138 | 37,513 | (22,646,410 | ) | (89,179 | ) | (384,034 | ) | ||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| 9 | AURORA GOLD CORPORATION |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
| 1. | Organization, Nature of Business, Going Concern and Management’s Plans |
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’s focus is on the exploration and development of its exploration properties located in the Tapajos Gold Province, State of Pará, Brazil (see Note 3). 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 interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The general business strategy of the Company is to acquire mineral properties either directly or through the acquisition of operating entities. The Company has incurred recurring operating losses since inception, has not generated any operating revenues to date and during the period ended March 31, 2012, operating activities used cash of $171,970 (March 31, 2011:$444,258). The Company requires additional funds to meet its obligations and maintain its operations.
These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in this regard are to raise equity financing through private or public equity investment in order to support existing operations and expand its business. The Company currently has a Prospectus out on offer and these details are included in further detail in these notes. There is however no assurance that such additional funding will be available to the Company when required, or on terms acceptable to the Company. In the event that the Company cannot obtain additional funds, on a timely basis, or the operations do not generate sufficient cash flow, the Company may be forced to curtail development or cease activities. These consolidated financial statements do not include any adjustments that might result from this uncertainty.
| 2. | Summary of Significant Accounting Policies |
| a. | Basis of Preparation |
The Company follows accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets accounting principles generally accepted (GAAP) in the United States that the Company follows to ensure they consistently report their financial condition, results of operations, and cash flows. References to GAAP issued by the FASB in these footnotes are to the FASB Accounting Standards Codification (ASC) or also referred to as Codification.
These interim consolidated financial statements have been prepared in accordance with GAAP and include the accounts of the Company and its wholly owned subsidiaries, Aurora Gold Mineração Ltda ("Aurora Gold Mineração") and AGC Resources LLC (“AGC”) (through to date of disposition of AGC, June 14, 2011). Collectively, they are referred to herein as "the Company". Significant inter-company accounts and transactions have been eliminated.
Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such Securities and Exchange Commission (SEC) rules and regulations. The interim period consolidated financial statements should be read together with the audited consolidated financial statements and accompanying notes included in the Company’s audited consolidated financial statements for the year ended December 31, 2011. In the opinion of the management of the Company, the unaudited consolidated financial statements contained herein contain all adjustments (consisting of a normal recurring nature) necessary to present a fair statement of the results of the interim periods presented.
| b. | Use of Estimates |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and assumptions.
| 10 | AURORA GOLD CORPORATION |
| 2. | Summary of Significant Accounting Policies (Continued) |
| c. | Cash Equivalents |
Cash equivalents comprise certain highly liquid instruments with a maturity date of three months or less when purchased. The Company did not have any cash equivalents at March 31, 2012 and 2011. Amounts paid for income taxes during the periods ended March 31, 2012 and 2011 were nil; and for interest paid nil respectively.
| d. | Buildings and Equipment |
Buildings and equipment are carried at cost (including development and preproduction costs, capitalized interest, other financing costs and all direct administrative support costs incurred during the construction period, net of cost recoveries and incidental revenues), less accumulated depletion and depreciation including write-downs. Following the construction period, interest, other financing costs and administrative costs are expensed as incurred. On the commencement of commercial production, depletion of each mining property is provided on the unit-of-production basis, using estimated proven and probable reserves as the depletion basis. Buildings and equipment utilized directly in commercial mining activities are depreciated, following the commencement of commercial production, over their expected economic lives using either the unit-of-production method or the straight-line method. Depreciation for non-mining equipment is provided over the following useful lives:
| - | Vehicles | 10 years |
| - | Office equipment, furniture and fixtures | 2 to 10 years |
The Company reviews the carrying values of its buildings and equipment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. An impairment is considered to exist if total estimated future cash flows, or probability-weighted cash flows on an undiscounted basis, are less than the carrying value of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows associated with values beyond proven and probable reserves and resources. In estimating future cash flows, assets are grouped at the lowest level for which there is identifiable future cash flows that are largely independent of cash flows from other asset groups. Generally, in estimating future cash flows, all assets are grouped at a particular property for which there are identifiable cash flows. Buildings and equipment utilized directly in commercial mining activities are depreciated, following the commencement of commercial production, over their expected economic lives using either the unit-of-production method or the straight-line method.
| e. | Mineral Property Reclamation Bonds and Other Related Refundable Costs |
Costs paid for the purchase of reclamation bonds and other related costs that are refundable are capitalized. If amounts paid are not to be refunded then they will be expensed when it is determined they will not be refunded.
| f. | Mineral Properties and Exploration Expenses |
The Company accounts for its mineral properties on a cost basis whereby all direct costs, net of pre-production revenue, relative to the acquisition of the properties are capitalized. All sales and option proceeds received are first credited against the costs of the related property, with any excess credited to earnings. Once commercial production has commenced, the net costs of the applicable property will be charged to operations using the unit-of-production method based on estimated proven and probable recoverable reserves. The net costs related to abandoned properties are charged to operations.
Exploration costs are charged to operations as incurred until such time that proven reserves are discovered. From that time forward, the Company will capitalize all costs to the extent that future cash flow from mineral reserves equals or exceeds the costs deferred. The deferred costs will be amortized over the recoverable reserves when a property reaches commercial production. As at March 31, 2012 and 2011, the Company does not have proven reserves. Exploration activities conducted jointly with others are reflected at the Company's proportionate interest in such activities.
The Company reviews the carrying values of its mineral properties on a regular basis by reference to the project economics including the timing of the exploration or development work, the program of works and the exploration results experienced by the Company and others. The review of the carrying value of any producing property will be made by reference to the estimated future operating results and net cash flows. When the carrying value of a property exceeds its estimated net recoverable amount, provision is made for the decline in value.
| 11 | AURORA GOLD CORPORATION |
| 2. | Summary of Significant Accounting Policies (Continued) |
The recoverability of the amounts recorded for mineral properties is dependent on the confirmation of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to successfully complete their development and the attainment of future profitable operations or proceeds from disposal.
Estimated costs related to site restoration programs during the commercial development stage of the property are accrued over the life of the project.
| g. | Stock-Based Compensation |
The Company accounts for share-based payments under the fair value method of accounting for stock-based compensation consistent with GAAP. Under the fair value method, stock-based compensation cost is measured at the grant date based on the fair value of the award using the Black-Sholes option pricing model and is recognized to expense on a straight-line basis over the requisite service period, which is generally the vesting period. Where upon grant the options vest immediately the stock-based costs are expensed immediately.
| h. | Interest Expense |
Interest expense for the periods ended March 31, 2012 and 2011 were nil.
| i. | Foreign Currency Translation and Transactions |
The Company's reporting currency is the United States Dollar (USD). Aurora Gold Mineração Ltda is a foreign operation and its functional currency is the Brazilian Real (Real). Certain contractual obligations in these consolidated financial statements are stated in Brazilian Real’s. At the periods ended March 31, 2012 and 2011 the Brazilian Real exchange rate to the USD was $0.5982 to 1 Real (March 31, 2011: USD $0.53570 to 1 Real).
The Company translates foreign assets and liabilities of its subsidiaries, other than those denominated in USD, at the rate of exchange at the balance sheet date. Income and expenses of these subsidiaries are translated at the average rate of exchange throughout the reporting period. Gains or losses from these translations are reported as a separate component of other comprehensive income (loss) until all or a part of the investment in the subsidiaries is sold or liquidated. The translation adjustments do not recognize the effect of income tax because the Company expects to reinvest the amounts indefinitely in operations.
Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the local functional currency are included in foreign exchange (gain) loss in the consolidated statements of operations.
| j. | Concentration of Credit Risk |
Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash with high credit quality financial institutions in Brazil and Canada. The Company occasionally has cash deposits in excess of federally insured limits. The Company had funds deposited in banks beyond the insured limits as of March 31, 2012 and 2011 respectively. The Company has not experienced any losses related to these balances, and management believes the credit risk to be minimal.
| 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, accounts payable, accrued expenses and advances payable (including related parties) approximate their fair value because of the short-term nature of these instruments.
| 12 | AURORA GOLD CORPORATION |
| 2. | Summary of Significant Accounting Policies (Continued) |
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 (primarily in Brazil) and is exposed to foreign currency risk due to the fluctuation between the currency in which the Company operates in and the USD.
| l. | Income Taxes |
The Company has adopted ASC 740, 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 carrying 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. In July 2006, the FASB issued an interpretation, which clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with GAAP. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Estimated interest and penalties related to recording uncertain tax positions when recorded are included as a component of income tax expense on the consolidated statement of operations. The Company has not recorded any liabilities for uncertain tax positions or any related interest and penalties. The Company’s tax returns are open to audit for the years ending December 31, 2008 to 2011 respectively.
| m. | Basic and Diluted Net Income (Loss) Per Share |
Earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the reporting period including common stock issued effective the date committed. Common stock issuable is considered outstanding as of the original approval date for the purposes of earnings per share computations. Diluted earnings (loss) per common share is computed by dividing net earnings (loss) by the sum of (a) the basic weighted average number of shares of common stock outstanding during the period and (b) additional shares that would have been issued and potentially dilutive securities. During the three months ended March 31, 2012 and 2011 the diluted earnings (loss) per share was equivalent to the basic earnings (loss) per share because all potentially dilutive securities were anti-dilutive due to the net losses incurred. Potentially dilutive securities consist of stock options and warrants outstanding at the end of the reporting period. Stock options outstanding as at March 31, 2012 were 10,450,000 (2011:1,700,000). Warrants outstanding as at March 31, 2012 were 8,000,000 (2011:nil).
| n. | Interim Financial Statements |
In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments which include only normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.
The unaudited financial statements should be read in conjunction with the Company’s audited financial statements and notes for the year ended December 31, 2011, which are included in the Company’s Annual Report on Form 10-K.
| 13 | AURORA GOLD CORPORATION |
| 2. | Summary of Significant Accounting Policies (Continued) |
| o. | Recent Accounting Pronouncements |
The Company considers the effects of new accounting pronouncements on the accounting, presentation and disclosure of its consolidated financial statements, as such pronouncements become known. In June 2011, the FASB issued Accounting Standards Update ("ASU") No. 2011-05, Comprehensive Income or ASU 2011-05. The guidance in ASU 2011-05 revises the manner in which entities present comprehensive income in their financial statements. An entity is required to report the components of comprehensive income in either one or two consecutive financial statements:
- A single, continuous statement must present the components of net income and total net income, the components of other comprehensive income and total other comprehensive income, and a total for comprehensive income.
- In a two-statement approach, an entity must present the components of net income and total net income in the first statement. That statement must be immediately followed by a financial statement that presents the components of other comprehensive income, a total for other comprehensive income, and a total for comprehensive income.
ASU 2011-05 does not change the items that must be reported in other comprehensive income. The amendments in ASU 2011-05 are effective for fiscal years beginning after December 15, 2011 and the Company adopted this guidance effective January 1, 2012. In the consolidated statements of comprehensive income (loss) the Company has presented comprehensive income in a single continuous statement.
At present, there are no other such pronouncements not yet effective that the Company expects will have a material impact on these consolidated financial statements.
| 14 | AURORA GOLD CORPORATION |
| 3. | Mineral Properties and Exploration Expenses |
| (a) | São Domingos Project in the Municipality of Itaituba, in the Tapajos gold province of the State of Para, Brazil, Department of National Production Minerals (DNPM) Processes 850.684/06 and 850.782/05: |
| i. | DNPM Processes 850.684/06: |
Aurora has good title over the mineral rights, which were granted as DNPM Process number 850.684/06 and which is valid and in force, free and clear of any judicial and extrajudicial encumbrances and taxes. The São Domingos mineral rights are located at the Municipality of Itaituba, State of Pará, and are registered in the name of Aurora. On September 13, 2006 the Company applied to the DNPM for the conversion of the Application to an Exploration Permit covering an area of 4,914.18 hectares. No payments or royalties are due regarding DNPM Process 850.384/06.
| ii. | DNPM Processes 850.782/05: |
Aurora has good title over the mineral rights object of the DNPM Process No. 850.782/05, which is valid and in force, free and clear of any judicial and extrajudicial encumbrances and taxes. On November 8, 2005 it was submitted to DNPM the Exploration Claim for gold in the Municipality of Itaituba, State of Pará. The Exploration Permit was granted on November 28, 2006 for a three-year period. The transfer to Aurora was approved on March 24, 2009 and on September 28, 2009 it was requested the renewal of the Exploration Permit. This area was reduced from 6,756 hectares to 5,651.98 hectares due to the overlapping with Garimpeira (alluvial) Mining properties held by Mr Celio Paranhos. However the DNPM´s general attorney in Brasilia agreed with Aurora’s legal thesis and nullified all applications filed by Mr Paranhos (about to 1,900 applications). A new Exploration Permit rectifying the previous one was granted on August 20, 2010 for a three-year period, for an area of 6,656.20 hectares. No payments or royalties are due regarding the DNPM Process 850.782/05 since it was acquired through a permutation agreement with Altoro Mineração Ltda.
| iii. | DNPM Processes 850.012/06 and 850.013/06: |
The exploration claims were submitted to DNPM on January 19, 2006, for gold covering an area of 1,128.08 hectares and 750.55 hectares respectively, in the Municipality of Itaituba, State of Pará. According to information obtained such claims were correctly prepared and the required documents are in place. The tenements 850.012/06 and 850.013/06 are held by Mr Antonio Oliveira Ferreira and were submitted to DNPM on January 19, 2006. The tenements are located at Itaituba, State of Pará and are valid and in force, free and clear of any judicial and extrajudicial encumbrances and taxes, but the area was blocked since it is inside of a Garimpeira Reserve. The transfer to Aurora will be submitted after the Exploration Permits are granted. There are no payments or royalties related to the tenements according to the agreement entered into with the previous owner.
| iv. | DNPM Process 850.119/06: |
The exploration claim was submitted to DNPM on March 7, 2006, for gold covering an area of 1,068.72 hectares, in the Municipality of Itaituba, State of Pará. Aurora has good title over the mineral rights object of the DNPM Process No. 850.119/06, which is valid and in force, free and clear of any judicial and extrajudicial encumbrances and taxes. Aurora is the sole registered and beneficial holder of and owns and possesses good title to the referred mineral rights. The Exploration Permit has not been granted yet. The above-mentioned area is not related to any payments or royalties to third parties since Aurora claimed them directly.
| v. | DNPM Process 859.587/95: |
The tenement, which is held by Vera Lucia Lopes, is valid and in force, and is free and clear of any judicial and extrajudicial encumbrances and taxes. It is located at the Municipality of Itaituba, State of Pará. On November 27, 1995, it was submitted to DNPM the Exploration Claim for gold. The Exploration Permit was granted on September 15, 2006, for a three-year period covering an area of 5,000 hectares, and it was valid until September 15, 2009. On July 15, 2009, it was requested the renewal of the Exploration Permit but it hasn’t been analyzed by the DNPM yet. The transfer to Aurora was submitted on November 23, 2006, but it hasn’t been approved yet. There are no payments or royalties related to the tenements since all payments due under the terms of the agreement entered into with the previous owner have been already made.
| 15 | AURORA GOLD CORPORATION |
| 3. | Mineral Properties and Exploration Expenses (continued) |
| (b) | Gold properties in the Municipality of Itaituba, in the Tapajos gold province of the State of Para, Brazil, Department of National Production Minerals (DNPM) Processes |
| vi. | Comandante Araras Project - DNPM Processes 853.785/93 to 853.839/93 inclusive (relinquished): |
On October 17, 2011 the Company terminated this licence and Option Agreement by providing written notice to Samba. The Company is free of all and any future payment commitments. The interest in the properties was formally relinquished in January 2012.
| vii. | São João Project - DNPM Processes 851.533/94 to 851.592/94 inclusive (relinquished): |
On October 17, 2011 the Company terminated this licence and Option Agreement by providing written notice to Samba. The Company is free of all and any future payment commitments. The interest in the properties was formally relinquished in January 2012.
| viii. | DNPM Processes 850.014/06, 850.581/06 and 850.256/07: |
The Company has the right to acquire good title over the mineral rights object of the Tenements. The Tenements are registered in the name of Antonio Oliveira Ferreira. The exploration claims were submitted to DNPM respectively on January 19, 2006, August 8, 2006 and April 17, 2007 for gold covering the areas of 421.45 hectares, 4276.03 hectares and 4036.00 hectares, in the Municipality of Itaituba and Jacareacanga, State of Pará. According to information obtained such claims were correctly prepared and the required documents are in place. The tenement 850.014/06 has not been transferred to Samba yet since the Exploration Permit has not been granted so far. The Exploration Permit for the Process 850.581/06 was granted on February 15, 2011 for a three-year period, for an area of 4273.03 hectares. The transfer to Samba Brazil Mineração Ltda has not been presented yet. The Exploration Permit for the Process 850.256/07 was granted on November 30, 2007 for a three-year period but it was cancelled on May 21, 2008 because the holder didn’t pay the annual fees on time. On June 10, 2008 it was presented an appeal to have the annulment dismissed, which hasn’t been analyzed yet. However, if the appeal is not approved, Samba Brazil’s rights over this tenement are guaranteed since only Samba Brazil has presented a Bid application for this process on July 18 2008. According to the Agreement signed between Samba Brazil and Antonio Oliveira Ferreira on June 5, 2008, a total amount of 120,000 Brazilian Real’s has already been paid by Samba Brazil for the acquisition of the Tenements.
| (c) | British Columbia, Canada – Kumealon Property (relinquished) |
On January 20, 2012 the Company’s Kumealon claim over the property was relinquished.
| 4. | Advances Payable |
During March 2012, the Company entered into debt settlement agreements for $105,000 of advances received from a director of the Company and a company during fiscal 2011. As at March 31, 2012 advances payable were $32,000.
| 5. | Common Stock |
The Company intends to finance activities by raising capital through the equity markets. In October 2011 the Company filed a Registration Statement on Form S-1 offering up to a maximum of 50,000,000 units of the Company's securities at an offering price of $0.10 per Unit in a direct public offering, without any involvement of underwriters or broker-dealers. Each Unit consists of one (1) share of common stock at a $0.001 par value per share and one (1) Stock Purchase Warrant. Each full Warrant entitles the holder to purchase one additional share of common stock at a price of $0.20 for a period of two years commencing November 1, 2011 through October 31, 2013. The Units will be sold by the Chief Executive Officer and Chief Financial Officer. To date, no funds have been obtained from this offering.
During March 2012, the Company entered into debt settlement agreements for advances received from a director of the Company and a company during fiscal 2011 as well as $14,454 of amounts in accounts payable and accrued expenses. $119,454 was settled for 1,990,900 shares of common stock at an issue price of $0.06 per share. As at March 31, 2012 advances on stock subscriptions were $37,513 and received during this quarter.
| 16 | AURORA GOLD CORPORATION |
| 5. | Common Stock (continued) |
In March 2012, the Company entered into subscription agreements for 625,217 shares of common stock at a purchase price of $0.06 per share for a gross aggregate price of $37,513. Share certificates were not issued as at March 31, 2012. Pursuant to the subscription agreements, each of the Investors has represented that they are not a U.S. person; as such term is defined in Regulation S. In connection with the offering, the Company has agreed to pay a cash commission equal to 8% of all funds received or an aggregate of up $48,000 on the total maximum $600,000 subscription that is being offered.
On December 20, 2011, the Company entered into subscription agreements for 8,000,000 shares of common stock at a purchase price of $0.04 per share for a gross aggregate price of $320,000. Attached to each unit of common stock is one (1) series A stock purchase warrant. Each full Series A warrant entitles the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.08 per share for a period of eighteen months commencing on December 20, 2011 and expiring on June 20, 2013. Pursuant to the subscription agreements, each of the Investors has represented that they are not a U.S. person; as such term is defined in Regulation S. In connection with the offering, the Company has agreed to pay a cash commission equal to 8% of all funds received or an aggregate of up $25,600. The actual amount included in creditors for the period ended March 31, 2012 was $8,800. It is anticipated this will be the total amount of commission paid.
On December 15, 2011, the Company entered into debt settlement agreements with creditors and related parties in consideration for the issue of the Company’s common stock at a per share price of $0.02 per share. $218,754 was settled for 10,937,721 shares of common stock.
In September 2011, 1,671,000 shares were issued to an individual for cash at $0.10 per share. In September 2011, 150,000 shares were issued to a company for services rendered at $0.16 per share.
In April 2011, as an incentive to assist with future private placements, the Company authorized the payment of a non-cash finder’s fee of 450,000 shares of common stock of the Company in connection with the private placement completed in April 2010. The shares were issued in May 2011. All shares issued were to individuals and companies who reside outside the United States of America. The issuance of the shares was exempt from the registration requirements of Securities Act by virtue of Section 4(2) thereof as well as the exemption from registration requirements afforded by Regulation S.
| 6. | Stock Options |
In 2007, the Company's Board of Directors approved the 2007 Stock Option Plan (amended September 29, 2008) (“the Plan”) to offer an incentive to obtain services of key employees, directors and consultants of the Company. The Plan provides for the reservation for awards of an aggregate of 10% of the total shares of Common Stock outstanding from time to time. No Plan participant may receive stock options exercisable for more than 2,500,000 shares of Common Stock in any one calendar 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 term of stock options granted under the Plan is not to exceed ten years and the stock options vest immediately upon granting.
| 17 | AURORA GOLD CORPORATION |
| 6. | Stock Options (continued) |
The following is a summary of stock option activity and the status of stock options outstanding and exercisable at March 31, 2012:
| Stock Options # | Weighted Average Exercise Price $ | Remaining Contractual Life (years) As At | Aggregate Intrinsic value As At | |||||||||||||
| Outstanding and exercisable at December 31, 2011 | 9,050,000 | 0.11 | 4.28 | 36,500 | ||||||||||||
| Forfeited during March 31, 2012 | (200,000 | ) | 0.26 | - | - | |||||||||||
| Granted during March 31, 2012 | 1,600,000 | 0.05 | - | - | ||||||||||||
| Outstanding and exercisable at March, 31, 2012 | 10,450,000 | 0.09 | 4.21 | 42,000 | ||||||||||||
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value for all “in-the-money” options (i.e. the difference between the Company’s closing stock price on the last trading day of the fiscal year and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on March 31, 2012.
On June 15, 2011 Michael Montgomery resigned from the board of directors, an exercise notice for the 500,000 options held was not lodged and consequently the options lapsed on July 15, 2011.
Effective October 11, 2011, the Company’s board of directors granted 4,200,000 stock purchase options pursuant to the Company’s 2007 Stock Option Plan. Each of the Options has an issue date, effective date and vesting date of October 11, 2011, with an exercise price of $0.12 per share. The term of these Options are five years. The Options are exercisable at any time from the grant date up to and including October 10, 2016.
Effective November 24, 2011, the Company’s board of directors granted 3,650,000 stock purchase options pursuant to the Company’s 2007 Stock Option Plan. Each of the Options has an issue date, effective date and vesting date of November 24, 2011, with an exercise price of $0.05 per share. The term of these Options are five years. The Options are exercisable at any time from the grant date up to and including November 23, 2016.
During the quarter ended March 31, 2012, Cameron Richardson departed the Company, an exercise notice for the 200,000 options held was not lodged and consequently the options lapsed during the quarter.
Effective January 13, 2012, the Company’s board of directors granted 1,600,000 stock purchase options pursuant to the Company’s 2007 Stock Option Plan. Each of the Options has an issue date, effective date and vesting date of January 13, 2012, with an exercise price of $0.05 per share. The term of these Options are five years. The Options are exercisable at any time from the grant date up to and including January 12, 2017.
The total fair value of options granted for the period ended March 31, 2012 was $43,681 (March 31, 2011: nil) and expensed in full as options were vested in full on grant. The fair value of options are determined using the Black Scholes option pricing model that takes into account the exercise price, the expected life of the option, the share price at grant date (January 13, 2012) and expected price volatility of the underlying share, the expected dividend yield (nil assumed) and the risk free interest rate (4.50% used) for the term of the option. Management determined 2.50 years to be the average expected likely life of the options and utilized the simplified method due to the fact that the Company has not had significant options granted to develop historical data to provide a reasonable basis to estimate option lives. Volatility rates were calculated at the grant date of the option tranche and a rate of 120.89% was used.
As of March 31, 2012, there are outstanding Warrants to purchase 8,000,000 shares of common stock with an exercise price of $0.08 expiring June 2013.
| 18 | AURORA GOLD CORPORATION |
| 7. | Related Party Transactions |
Related party transactions not disclosed elsewhere in these consolidated financial statements include:
| a) | During the reporting period ended March 31, 2012 consulting fees of $110,751 (March 31, 2011:$84,277) were incurred to directors and officers (or companies of the officers and directors) of the Company. The transactions were recorded at the exchange amount, being the value established and agreed to by the related parties. |
| b) | Included in accounts payable and accrued expenses (related parties) as at March 31, 2012 and December 31, 2011 were $94,103 and $nil respectively payable to an officer and director of the Company for consulting fees and various expenses incurred on behalf of the Company. |
| c) | Effective January 13, 2012, the Company’s board of directors granted 1,600,000 stock purchase options pursuant to the Company’s 2007 Stock Option Plan to Directors (800,000 each to Mr Lars Pearl and Mr Agustin Gomez De Segura). Each of the Options has an issue date, effective date and vesting date of January 13, 2012, with an exercise price of $0.05 per share. The term of these Options are five years. The Options are exercisable at any time from the grant date up to and including January 12, 2017. | |
| 8. | Non-Cash Investing and Financing Activities |
In September 2011, 150,000 shares were issued to a company for services rendered at $0.16 per share. The shares were issued to a company who resides outside the United States of America.
In April 2011, as an incentive to assist with future private placements, the Company authorized the payment of a non-cash finder’s fee of 450,000 shares of common stock of the Company in connection with the private placement completed in April 2010. The shares were issued in May 2011. The issuance of these shares had no net effect on total shareholders' equity or results of operations as they related to fees associated with issuance of shares.
| 9. | Subsequent Events |
| a) | On April 10, 2012, the Company entered into a services agreement (the “LP Services Agreement”) with Lars Pearl, the Company’s Chief Executive Officer, pursuant to which Mr Pearl will serve as the Company’s Chief Executive Officer. Pursuant to the terms of the LP Services Agreement, Mr Pearl will be paid a monthly service fee of 12,000 Swiss Francs, plus Value Added Tax, if applicable, effective as of April 1, 2012. The Services Agreement may be terminated by mutual consent upon no less than 30 days prior notice. In the event the Company terminates the Services Agreement without cause, the Company shall pay Mr Pearl a severance of six month’s salary. |
| b) | On April 10, 2012, the Company entered into a services agreement (the “AS Services Agreement”) with Agustin Gomez de Segura, the Company’s Chairman and sole independent director, pursuant to which Mr Segura will serve as the Company’s Chairman and independent director. Pursuant to the terms of the AS Services Agreement, Mr Segura will be paid a monthly service fee of $3,000, plus Value Added Tax, if applicable, effective as of April 1, 2012. The AS Services Agreement may be terminated by mutual consent upon no less than 30 days prior notice. In the event the Company terminates the Services Agreement without cause, the Company shall pay Mr Segura a severance of three month’s salary. |
| c) | Effective as of April 10, 2012, the Company’s Board of Directors granted 200,000 stock purchase options (the “Options”) to Global Strategic Synergies Pty Ltd pursuant to the Company’s 2007 Stock Option Plan. The Options have an issue date, effective date and vesting date of April 10, 2012, with an exercise price of $0.065 per share. The term of these Options is five years. The Options are exercisable at any time from the grant date up to and including the April 9, 2017. |
| d) | Registration Statement on Form S-1 (File No. 333-177589) was filed for the purpose of incorporating more current extracts form the Company’s Annual Report on Form 10-K and the most recent financial statements contained therein on April 5, 2012. The information in this Prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. |
| e) | On April 16, 2012, the Company entered into subscription agreements for 1,316,000 shares of common stock at a purchase price of $0.06 per share for a gross aggregate price of $78,960. Pursuant to the subscription agreements, each of the Investors has represented that they are not a U.S. person; as such term is defined in Regulation S. In connection with the offering, the Company has agreed to pay a cash commission equal to 8% of all funds received or an aggregate of up $48,000 on the total maximum $600,000 subscription. |
| 19 | AURORA GOLD CORPORATION |
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THE FOLLOWING PRESENTATION OF MANAGEMENT’S DISCUSSION AND ANALYSIS OF aurora gold corporation SHOULD BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
Uncertainties Relating To Forward-Looking Statements
This portion of the Quarterly Report provides management's discussion and analysis (MD&A) of the financial condition and results of operations to enable a reader to assess material changes in financial condition and results of operations as of and for the three-month period ended March 31, 2012, in comparison to the corresponding prior-year period. This MD&A is intended to supplement and complement the unaudited consolidated financial statements and notes thereto, prepared in accordance with US GAAP, for the three month periods ended March 31, 2012 and 2011 (collectively, the "Financial Statements"), which are included in this Quarterly Report. The reader is encouraged to review the Financial Statements in conjunction with your review of this MD&A. This MD&A should be read in conjunction with both the annual audited consolidated financial statements for the year ended December 31, 2011 and the related annual MD&A included in the December 31, 2011 Form 10-K on file with the US Securities and Exchange Commission. Certain notes to the Financial Statements are specifically referred to in this MD&A and such notes are incorporated by reference herein. All dollar amounts in this MD&A are in US dollars, unless otherwise specified. For the purposes of preparing this MD&A, we consider the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of Aurora Gold Corporation's shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision or if it would significantly alter the total mix of information available to investors. Materiality is evaluated by reference to all relevant circumstances, including potential market sensitivity. This document contains numerous forward-looking statements relating to our business. The United States Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for certain forward-looking statements. Operating, exploration and financial data, and other statements in this document are based on information we believe reasonable, but involve significant uncertainties as to future gold and silver prices, costs, ore grades, estimation of gold and silver reserves, mining and processing conditions, changes that could result from our future acquisition of new mining properties or businesses, the risks and hazards inherent in the mining business (including environmental hazards, industrial accidents, weather or geologically related conditions), regulatory and permitting matters, and risks inherent in the ownership and operation of, or investment in, mining properties or businesses in foreign countries. Actual results and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. We disclaim any intent or obligation to update publicly these forward-looking statements, whether as a result of new information, future events or otherwise.
Background
The Company was 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, the Company redirected business efforts in late 1995 following a change of control, which occurred on October 30, 1995, to the acquisition, exploration and development of mineral resource properties. The Company name changed to “Aurora Gold Corporation” on August 20, 1996 to more fully reflect the resource exploration business activities.
The general business strategy is to acquire mineral properties either directly or through the acquisition of operating entities. The continued operations and the recoverability of minerals is dependent upon the existence of economically recoverable mineral reserves, confirmation of interest in the underlying properties and ability to obtain necessary financing to complete the development and future profitable production. Since 1996 the Company acquired and disposed of a number of properties. The Company has not been successful in any exploration efforts to establish reserves on any of the properties owned by or in which the Company holds an interest.
The Company currently has an interest in a strategic land package of nine (9) properties none of which contain any reserves . The Company has no revenues, has sustained losses since inception and has been issued an opinion by the auditors expressing substantial doubt about the ability to continue as a going concern. The Company will not generate revenues even if any of its exploration programs indicate that a mineral deposit may exist on the properties. Accordingly, the Company will be dependent on future financings in order to maintain operations and continue exploration activities.
The Company has not been involved in any bankruptcy, receivership or similar proceedings.
| 20 | AURORA GOLD CORPORATION |
Exploration and Development
Exploration Activities
The Company is a junior mineral exploration company and conducts principal and technical activities from Coresco AG, Level 3, Gotthardstrasse 20, 6304 Zug, Switzerland. The telephone number is (+41) 7887-96966. These offices are provided to the Company on a month-to-month basis. The Company believes these offices are adequate for the business requirements during the next 12 months. The Company does not own any real property.
During the fiscal year 2011 the Company reconstituted the board of directors and appointed a Chief Financial Officer. Management and the board reviewed and clarified the strategic objectives of the Company to concentrate efforts on existing operations where infrastructure already exists, properties presently being developed or in advanced stages of exploration that have potential for additional discoveries and grass-roots exploration opportunities. The Company is currently concentrating property exploration activities in Brazil. The board has terminated several agreements for mineral property rights during fiscal 2011 (or subsequent year end) with a view to consolidate and concentrate on the strategic land package of assets located in the Tapajos Region of Brazil.
The properties are in the exploration stage only and without a known body of mineral reserves. Development of the properties will follow only if satisfactory exploration results are obtained. Mineral exploration and development involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. There is no assurance that the mineral exploration and development activities will result in any discoveries of commercially viable bodies of mineralization. The long-term profitability of the operations will be, in part, directly related to the cost and success of the exploration programs, which may be affected by a number of factors.
The Company currently has an interest in a strategic land package of nine (9) properties none of which contain any reserves . The Exploration licence areas are divided into 2 groups, the Săo Domingos and the Sao Joao areas.
Mining Properties
The Company has calculated a body of mineralized material to Guide 7 standards calculated in accordance with the Australasian Joint Ore Reserves Committee (the “JORC”) code for reporting of Mineral Resources and Ore Reserves (the “JORC Code”). The JORC resource is currently estimated at 130,000 ounces at 2.0 g/t calculated on a 0.5 g/t cut off. This mineralized material is located on the Săo Domingos property discussed below. The rest of the Brazil properties are in the preliminary exploration stage and do not contain any known bodies of ore. The Company is also examining data relating to the potential acquisition of other exploration properties in Latin America, South America .
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 planned production will result in a commercial success, as production is gold price and politically sensitive. Once production has commenced the Company is able to gauge the onward commercial viability of the project. There is no assurance that planned mineral exploration and development activities will result in any further discoveries of commercially viable bodies of mineralization. The long-term profitability of operations will be, in part, directly related to the cost and success of exploration programs, which may be affected by a number of factors.
The Company currently has an interest in nine (9) properties located in Tapajos gold province in Para State, Brazil, Colibri and Sao Domingo, and due to their proximity to each other, the 2 properties are jointly called the Sao Domingo project. The Company has conducted exploration activities on the properties and have ranked the properties in order of merit and may discontinue such activities and dispose of some of the rights to mineral exploration on the properties if further exploration work is not warranted .
The geology of the Săo Domingos property is predominantly composed of paleo-proterozoic Parauari Granites that play host to a number of gold deposits in the Tapajos Basin. Typical Granites of the younger Maloquinha Intrusive Suite have been noticed in the vicinity of Molly Gold Target, and basic rocks considered to be part of the mesoproterozoic Cachoeira Seca Intrusive Suite occur around the Esmeril target area. The Săo Domingos property was a previous large alluvial operation, and the property area covers numerous areas of workings. The Săo Domingos property lies in the Tapajos Province of Para State, Brazil It is situated approximately 250 km SE of Itaituba, the regional centre. Small aircraft service Itaituba daily and on occasions flights can be sourced via Manaus. Access from Itaituba to site is by small aircraft or unsealed road of average to poor quality. The road is subject to seasonal closures and ‘wet’ season site access is granted via light aircraft utilizing the local airstrip.
| 21 | AURORA GOLD CORPORATION |
Tenures from the Department of National Production Minerals (DNPM) are disclosed in the aforementioned notes to the financial statements.
Results of Operations
Three months ended March 31, 2012 versus three months ended March 31, 2011
Revenues and Net Loss – The Company has yet to generate any revenues or establish any history of profitable operations. The Company recorded a net loss of $245,810 (March 31, 2011: net loss $384,701) or $(0.00) [March 31, 2011: $(0.00)] per share.
Expenses – The general and administrative expenses consist primarily of personnel costs, legal costs, investor relations costs, stock based compensation costs, accounting costs and other professional and administrative costs. General and Administrative expenses were $88,673 (March 31, 2011:$54,738). The slight increase in quarter on quarter costs reflects the increased activities to actively manage the Company properties. Included in expenses are professional accounting and legal fees of $8,171 (March 31, 2011:$35,958).
Exploration expenditures – Exploration expenses are charged to operations as they are incurred. The Company recorded exploration expenses of $28,282 (March 31, 2011:$169,551) the majority relating to Brazilian properties during the current quarter and Colorado and Brazil mine in prior quarter.
Depreciation expense – Depreciation expenses charged to operations were nil (March 31, 2011:$5,101).
Liquidity and Capital Resources
March 31, 2012 versus December 31, 2011:
Recent developments in capital markets have restricted access to debt and equity financing for many companies. The Company's exploration properties are in the exploration stage and have not commenced commercial production. Consequently the Company has no history of earnings or cash flow from its operations. As a result, the Company is reviewing its 2012 fiscal exploration and capital spending requirements in light of the current and anticipated global economic environment.
The Company currently finances its activities primarily by the private placement of securities. There is no assurance that equity funding will be accessible to the Company at the times and in the amounts required to fund the Company’s activities. There are many conditions beyond the Company’s control, which have a direct bearing on the level of investor interest in the purchase of Company securities. The Company may also attempt to generate additional working capital through the operation, development, sale or possible joint venture development of its properties; however, there is no assurance that any such activity will generate funds that will be available for operations. Debt financing has been used to fund the Company’s property acquisitions and exploration activities. The Company does not have “standby” credit facilities, or off-balance sheet arrangements and it does not use hedges or other financial derivatives. The Company has no agreements or understandings with any person as to additional financing.
The Company intends to finance activities by raising capital through the equity markets. In October 2011, the Company filed a Registration Statement on Form S-1 offering up to a maximum of 50,000,000 units of the Company's securities at an offering price of $0.10 per Unit in a direct public offering, without any involvement of underwriters or broker-dealers. Each Unit consists of one (1) share of common stock at a $0.001 par value per share and one (1) Stock Purchase Warrant. Each full Warrant entitles the holder to purchase one additional share of common stock at a price of $0.20 for a period of two years commencing November 1, 2011 through October 31, 2013. The Units will be sold by the Chief Executive Officer and Chief Financial Officer. To date, no funds have been obtained from this offering.
At March 31, 2012 the Company had cash of $81,828 (December31 2011:$237,426) and a working capital deficiency of $(384,034) and $(300,218) as at December 31, 2011. Total liabilities as of March 31, 2012 were $465,862 (December 31, 2011: $537,644).
During March 2012, the Company entered into debt settlement agreements for advances received from an individual and a company during fiscal 2011. $119,454 was settled for 1,990,900 shares of common stock at an issue price of $0.06 per share. Further details are provided under the Common Stock notes to these financial statements.
| 22 | AURORA GOLD CORPORATION |
Cash Flow
Three months ended March 31, 2012 versus three months ended March 31, 2011:
Operating activities: The Company used cash of $171,870 (March 31, 2011:$444,258). Changes in prepaid expenses and other assets resulted were nil during the period (March 31, 2011: decrease of $22,720) and changes in accounts payable and accrued expenses (including related party) resulted in an increase in cash of $30,159 (March 31, 2011: decrease in cash of $41,938).
Investing Activities: There was no investing activities during the period (March 31, 2011:$nil)
Financing Activities: The Company intends to finance activities by raising capital through the equity markets. In October 2011, the Company filed a Registration Statement on Form S-1 offering up to a maximum of 50,000,000 units of the Company's securities at an offering price of $0.10 per Unit in a direct public offering, without any involvement of underwriters or broker-dealers. Each Unit consists of one (1) share of common stock at a $0.001 par value per share and one (1) Stock Purchase Warrant. Each full Warrant entitles the holder to purchase one additional share of common stock at a price of $0.20 for a period of two years commencing November 1, 2011 through October 31, 2013. The Units will be sold by the Chief Executive Officer and President. To date, no funds have been obtained from this offering.
During March 2012, the Company entered into debt settlement agreements for advances received from an individual and a company during fiscal 2011. $119,454 was settled for 1,990,900 shares of common stock at an issue price of $0.06 per share. As at March 31, 2012 advances on stock subscriptions were $37,513 and received during this quarter.
On December 20, 2011, the Company entered into subscription agreements for 8,000,000 shares of common stock at a purchase price of $0.04 per share for a gross aggregate price of $320,000. Attached to each unit of common stock is one (1) series A stock purchase warrant. Each full Series A warrant entitles the holder to purchase an additional share of the Company’s common stock at an exercise price of $0.08 per share for a period of eighteen months commencing on December 20, 2011 and expiring on June 20, 2013. Pursuant to the subscription agreements, each of the Investors has represented that they are not a U.S. person; as such term is defined in Regulation S. In connection with the offering, the Company has agreed to pay a cash commission equal to 8% of all funds received or an aggregate of up $25,600. The actual amount included in creditors for the period ended March 31, 2012 was $8,800. It is anticipated this will be the total amount of commission paid.
On December 15, 2011, the Company entered into debt settlement agreements with creditors and related parties in consideration for the issue of the Company’s common stock at a per share price of $0.02 per share. $218,754 was settled for 10,937,721 shares of common stock.
During the fiscal year 2011 the Company received funds from advances from individuals and a company, totalling $257,000, that were non-interest bearing, were due on demand and were unsecured. As at the end of the fiscal year this total amount was reduced to $137,000 due to $120,000 of this advance being converted to common stock for settlement of this indebtedness in December 2011 at $0.04 per share.
In September 2011, 1,671,000 shares were issued to an individual for cash at $0.10 per share. In September 2011, 150,000 shares were issued to a company for services rendered at $0.16 per share.
In April 2011, as an incentive to assist with future private placements, the Company authorized the payment of a non cash finder’s fee of 450,000 shares of common stock of the Company in connection with the private placement completed in April 2010. The shares were issued in May 2011. All shares issued were to individuals and companies who reside outside the United States of America. The issuance of the shares was exempt from the registration requirements of Securities Act by virtue of Section 4(2) thereof as well as the exemption from registration requirements afforded by Regulation S.
Dividends
The Company has neither declared nor paid any dividends on the Common Stock. The Company intends to retain earnings to finance growth and expand operations and does not anticipate paying any dividends on common stock in the foreseeable future.
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Asset-Backed Commercial Paper
The Company has no asset-backed commercial paper.
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, accounts payable, accrued expenses and advances payable (including those amounts owing to related parties) 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 (primarily in Brazil) 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 in which the operations are reported.
Share Capital
At March 31, 2012, the Company had:
| - | Authorized share capital of 300,000,000 (December 31, 2011: 300,000,000) common shares with par value of $0.001 each |
| - | 111,903,489 common shares were issued and outstanding as at March 31, 2012 (December 31, 2011: 109,912,589). |
| - | 10,450,000 (December 31, 2011 9,050,000) stock options were outstanding under the incentive stock option plan. The stock options are exercisable at prices ranging from $0.05 to $0.26 per share, with expiry dates ranging from August 6, 2012 to 12 January 2017. If the holders were to acquire all 10,450,000 (December 31, 2011: 9,050,000) shares issuable upon the exercise of all incentive stock options outstanding, the Company would receive an additional $1,026,500 (December 31, 2011: $1,206,500). |
| - | Warrants outstanding as at March 31, 2012 were 8,000,000 (December 31, 2011:8,000,000). |
Market Risk Disclosures
The Company has not entered into derivative contracts either to hedge existing risks or for speculative purposes during the period ended March 31, 2012 (March 31, 2011: nil) and the subsequent period to May 14, 2012.
Off-balance Sheet Arrangements and Contractual Obligations
The Company does not have any off-balance sheet arrangements or contractual obligations as at March 31, 2012, that are likely to have or are reasonably likely to have a material current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that have not been disclosed in consolidated financial statements.
Application of Critical Accounting Policies
The accounting policies and methods utilized in the preparation of the consolidated financial statements determine how the Company reports the financial condition and results of operations and may require management to make estimates or rely on assumptions about matters that are inherently uncertain. The accounting policies are described in Note 2 to the December 31, 2011 consolidated financial statements. The accounting policies relating to mineral property and exploration costs and depreciation and amortization of property, plant and equipment are critical accounting policies that are subject to estimates and assumptions regarding future activities. Refer to December 31, 2011 Form 10- K for further information.
Related Party Transactions
The proposed business raises potential conflicts of interests between certain officers and directors of the Company. Certain directors are directors of other mineral resource companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors may have a conflict of interest in negotiating and concluding terms regarding the extent of such participation. In the event that such a conflict of interest arises at a meeting of the directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In appropriate cases, the Company will establish a special committee of independent directors to review a matter in which several directors, or management, may have a conflict. From time to time, several companies may participate in the acquisition, exploration and development of natural resource properties thereby allowing for their participation in larger programs, involvement in a greater number of programs and reduction of the financial exposure with respect to any one program. It may also occur that a particular company will assign all or a portion of its interest in a particular program to another of these companies due to the financial position of the company making the assignment. In determining whether the Company will participate in a particular program and the interest therein to be acquired by it, the directors will primarily consider the potential benefits to the Company, the degree of risk exposure and the financial position at that time. Other than as indicated, the Company has no other procedures or mechanisms to deal with conflicts of interest. The Company is unaware of the existence of any conflict of interest as described herein.
| 24 | AURORA GOLD CORPORATION |
Other than as disclosed below, during the periods ended March 31, 2012 and March 31, 2011, none of our current directors, officers or principal shareholders, nor any family member of the foregoing, nor, to the best of our information and belief, any former directors, senior officers or principal shareholders, nor any family member of such former directors, officers or principal shareholders, has or had any material interest, direct or indirect, in any transaction, or in any proposed transaction which has materially affected or will materially affect the Company.
There have been no transactions or proposed transactions with officers and directors during the last two years to which the Company is a party except as follows:
During the reporting period ended March 31, 2012 consulting fees of $110,751 (March 31, 2011:$84,277) were incurred to directors and officers of the Company. The transactions were recorded at the exchange amount, being the value established and agreed to by the related parties.
Included in accounts payable and accrued expenses (related parties) as at March 31, 2012 and March 31, 2011 were $94,103 and $6,578 respectively payable to an officer and director of the Company for consulting fees and various expenses incurred on behalf of the Company.
CURRENT OUTLOOK
General Economic Conditions
Current problems in credit markets and deteriorating global economic conditions have lead to a significant weakening of exchange traded commodity prices, including precious and base metal prices. Volatility in these markets is also high. It is difficult in these conditions to forecast metal prices and demand trends for products to be produced if mining operations were current. Credit market conditions have also increased the cost of obtaining capital and limited the availability of funds. Accordingly, management is reviewing the effects of the current conditions on our business.
It is anticipated that for the foreseeable future, the Company will rely on the equity markets and Option and Warrant holders to meet financing requirements and continue to enter into debt settlements to preserve the Company’s capital reserves. The Company will also consider entering into joint venture arrangements to advance its properties if a suitable opportunity presents.
Capital and Exploration Expenditures
The Company is reviewing capital and exploration spending in light of current market conditions. As a result of our review, the Company may curtail a portion of our capital and exploration expenditures during 2012.
The Company is currently concentrating our exploration activities in Brazil and examining data relating to the potential acquisition or joint venturing of additional mineral properties in either the exploration or development stage.
Plans for Next Twelve Months
The following Plan of Operation contains forward-looking statements that involve risks and uncertainties, as described below. The actual results could differ materially from those anticipated in these forward-looking statements. During the next 12 months the Company intends to raise additional funds through equity offerings and/or debt borrowing to meet the general and administrative operating expenses and to conduct work on exploration properties . There is, of course, no assurance that the Company will be able to do so and the Company does not have any agreements or arrangements with respect to any such financing. The exploration properties have not commenced commercial production and the Company has no history of earnings or cash flow from operations. While the Company may attempt to generate additional working capital through the operation, development, sale or possible joint venture development of properties , there is no assurance that any such activity will generate funds that will be available for operations.
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The Company intends to concentrate 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 other South American countries. Additional contractors and consultants may be hired on as and when the requirement occurs.
The exploration work program for the remainder of 2012 will focus on the Brazilian properties. In Brazil the Company intends to follow up results from previous work on the Sao Domingo property, including the previous drilling and mapping over the Fofoca target area. Follow up evaluation of the geophysical anomaly west of Fofoca is required to test any strike continuity of potential economic mineralisation. This work will entail surface mapping, sampling of soils on a grid basis to delineate geochemical anomalies, stream sediment sampling, geophysical surveying and drilling.
The Company has set up a field operations centre at the Săo Domingos property and intend to continue to focus exploration activities on anomalies associated with the Săo Domingos property. The Company selected the Săo Domingos property based on its proximity to the other properties, and the logistics currently in place. Access to the Săo Domingos property is by light aircraft to a well-maintained strip, by road along the government maintained Trans Garimpeiro highway, and by boat along the multitude of waterways in the Amazon Basin . Work conducted both on a regional and prospect scale since 2006 has included mapping, rock chip sampling, a large scale soil geochemical sampling grid, ground-based geophysical testing, partial trenching over the vein systems and sub-surface drill testing of several prospect areas at Fofoca, Esmeril, Santa Isabel and Atacadão.
The Fofoca Prospect (“Fofoca”) is the primary area of interest that has been identified to date. Hydrothermal alternation observed at Fofoca and surrounding prospects is considered characteristic of epithermal style mineralization systems in the region. Fofoca has been interpreted as a multiple lode gold system, with lodes that are shear hosted in granite country rocks and strike approximately east-west dipping moderately to the south. Gold mineralization is associated with quartz veining which hosts various sulphides, including pyrite, arsenopyrite, galena and chalcopyrite. Fofoca has over 580 meters of potential strike with typical breccia vein widths of over one meter dipping at around 80 degrees south. Thicknesses of approximately 20 meters of quartz stockwork have been seen in drill core in the central parts of deposit caused by post-mineralization brittle faulting.
Exploration work completed at Fofoca in 2006 included logging of six trenches over anomalous quartz veins, followed by a 17 hole, HQ/NQ drill program (2,606 meters) to test the trenches at depth. Drilled to a maximum depth of 185 meters, with an average depth of 153 meters, the drilling returned several high grade, thin intercepts of auriferous quartz veins.
A second HQ/NQ drilling campaign (FOF-18 and 19) started in mid-2007 in which two holes were drilled into Fofoca. This program targeted down dip extensions, with drill hole 18 descending to 250 meters, but only encountered small stockwork vein systems. Generally the drill holes encountered thin hydrothermally brecciated, vuggy, sulphidic quartz veins with alterations ranging from argillic through to potassic (possible overprinting) which is typical for this style of mineralisation. No metallurgical test work was undertaken.
Based on mapping, sampling, trenching and ground-based IP surveys, the Fofoca structure appears to continue to the west, being displaced by late stage faulting to the north. This structural trend is believed to link Fofoca with the Cachoeirinha (Fofoca West) area, providing the potential to add significantly to currently outlined resources. No drilling has been conducted on Fofoca West. We will continue to evaluate the potential of the São Domingós Project and will work to determine whether the Fofoca could evolve along strike and link up with other noted targets further along strike. Further drilling, trenching and geophysics is planned to further assess the São Domingós Project.
Currently the system still remains open along strike in both directions and at depth. The Company will continue to evaluate the potential, and are confident that Fofoca could evolve further and link up with other noted targets further along strike
A recent discovery was made on the Atacadau area and has been called Colibri. Here artisanal miners uncovered an area of stock work mineralization that was subsequently sampled and returned some high-grade assays. Further sampling of material that was exposed by artisanal activity around the Colibri occurrence was conducted. Whilst monitoring the artisanal activity mapping and measurements of the structures and orientations of theoretical mineralization channels were conducted. The results showed that there are possible correlations to the Atacadau mineralization noted from previous mapping and drilling. The Company intends to cut trenches across the strike of the mineralizing structures to better understand the size both laterally and along strike. We will then test the strike extent with geophysics in a similar manner as that conducted on the Fofoca area.
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In 2012, the Company will continued to follow up exploration results on the Fofoca area and plan to initiate further exploration programs on other areas of the Sao Domingos property. It is anticipated that we will drill a series of holes within the Fofoca area for engineering and metallurgical test work as well as to test for depth extensions of the known gold occurrences. Other exploration on the Săo Domingos property areas will involve further mapping of the outcrop geology and sampling soils and scree from shafts of previous workers in order to confirm lithologies and structural trends noted from drilling and published government maps. Currently, five anomalous areas on the Sao Domingos property have been identified from soil and rock chip sampling, at Atacadão, Esmeril, Fofoca and Cachoeira, and we plan to conduct further investigation. Several other areas have been identified from remote sensing satellite imagery which will also be followed up.
Remote sensing imagery is critical as an aid to exploration in the Tapajos due to the nature of the location as well as to the development of the project. By the application of various spectral analytical methods, the Company has been able to locate numerous areas for follow up investigation. A digital elevation map obtained by SRTM radar mapping has been essential to regional appraisal of the Sao Domingo property.
By viewing spectral wave band ratio's designed to indicate iron oxides and clay minerals, the Company has been able to decipher areas of past artisanal activity which could lead to the discovery of further hard rock targets, as demonstrated by the discovery of further extensions to potential mineralisation at Colibri and the newly discovered, Toucano, gold occurrence.
The Toucano project is a recent discovery, made during the 4th Quarter of 2011 located in the same vicinity the Colibri gold occurrence and close to the Fofoca resource area, the Attacadau occurrence and also high grade Colibri occurrence. Initial appraisal of Toucano shows that the dimensions the exposed area of recent Garimpeiro activity measures approximately 320m along strike, with a highly mineralised core measuring approximately 15m in width. The mineralisation occurs at surface and has been excavated down to depth of approximately 5m. The surrounding host rocks are also highly altered and show intense stock work of ferruginous quartz veinlets. The mineralised envelope is approximately 40m in width, and is open in both directions along strike.
During 2012 the Company intends to follow up recent mapping and sampling at Toucano with a view to drilling to test the depth at width and lateral extent of any mineralisation.
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company’s exposure to market risk is confined to cash equivalents and short-term investments. The Company invests in high-quality financial instruments, primarily money market funds with the effective duration of the portfolio within one year which management believes is subject to limited credit risk. The Company currently does not hedge interest rate exposure. Due to the short-term nature of the investments, the Company does not believe there is a material exposure to interest rate risk arising from the investments.
ITEM 4 – CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of senior management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that we file or submit under the Exchange Act. As previously reported under Item 9A in the Annual Report on Form 10-K for the year ended December 31, 2011 (the “Annual Report”), we had numerous deficiencies in our disclosures controls as of December 31, 2011. In the Annual Report we described the remediation efforts we have begun to undertake in order to correct such deficiencies. As of March 31, 2012, the deficiencies described in the Annual Report still existed since the remediation efforts had not yet been fully implemented as of such date.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal controls over financial reporting or in other factors during the fiscal quarter ended March 31, 2012 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting subsequent to the date we carried out our most recent evaluation. As previously reported in Item 9A of the Annual Report, we had numerous material weaknesses in our internal control over financial reporting as of December 31, 2011. In the Annual Report we described the remediation efforts we have begun to undertake in order to correct such material weaknesses. As of March 31, 2012, the material weaknesses described in the Annual Report still existed since the remediation efforts had not yet been fully implemented as of such date.
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PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
The Company is not involved in any legal proceedings at this time .
ITEM 1A – RISK FACTORS
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
During the quarter of the fiscal year covered by this report (i) the Company did not modify the instruments defining the rights of its shareholders, (ii) no rights of any shareholders were limited or qualified by any other class of securities, and (iii) the Company did not sell any unregistered equity securities.
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES
During the quarter of the fiscal year covered by this report, no material default has occurred with respect to any indebtedness of the Company. Also, during this quarter, no material arrearage in the payment of dividends has occurred.
ITEM 4 – MINING SAFETY DISCLOSURES
There are no current mining activities at the date of this report.
ITEM 5 – OTHER INFORMATION
During the quarter of the fiscal year covered by this report, the Company reported all information that was required to be disclosed in a report on Form 8-K.
ITEM 6 – EXHIBITS
| (a) | Index to and Description of Exhibits |
All Exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to the Companies previous filings with the SEC which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-24393 98720970.
| Exhibit | Description | Status | ||
| 3.1.1 | Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.1 | Certificate of Amendment to the Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.1 | Certificate of Restoration and Renewal of Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.1.2 | Certificate of Amendment to the Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.1.3 | Certificate of Restoration and Renewal of Certificate of Incorporation incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.2.1 | By-laws incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 3.2.2 | Amended and Restated By-laws incorporated by reference to the registration statement on Form 10SB | Filed | ||
| 4.1 | Form of Subscription Agreement incorporated by reference to the Post-Effective amendments for registration statement on Form S-1 | Filed |
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| Exhibit | Description | Status | ||
| 4.2 | Form of Series A Warrant incorporated by reference to the Post-Effective amendments for registration statement on Form S-1 filed | Filed | ||
| 4.3 | Debt Settlement Agreement with Samba Minerals Limited incorporated by reference to the registration statement on Form S-1 filed | Filed | ||
| 4.4 | Form of Debt Settlement Agreement with Axino AG, Heroe Investments Inc, Jolanda Investments Ltd, Gemeinhardt GmbH, Lars Pearl and WS Marketing GmbH. incorporated by reference to the registration statement on Form S-1 | Filed | ||
| 10.1 | Consulting Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.1 | Services Agreement (the “LP Services Agreement”) with Lars Pearl, the Company’s Chief Executive Officer, pursuant to which Mr Pearl will serve as the Company’s Chief Executive Officer. | Filed | ||
| 10.1 | Services Agreement (the “AS Services Agreement”) with Agustin Gomez de Segura, the Company’s Chairman and sole independent director, pursuant to which Mr Segura will serve as the Company’s Chairman and independent director. | Filed | ||
| 10.2 | Confidentiality Agreement between Hans W. Biener of SupplyConsult GbR and Aurora Gold Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.3 | Assignment of Novo Porto and Santa Clara Memorandum of Understanding to Aurora Gold Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.4 | Novo Porto Memorandum of Understanding Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.5 | Declaration of Translator for translation of Porto Novo Memorandum of Understanding from Portuguese to English Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.6 | Novo Porto Option Agreement incorporated by reference to the Form 10-KSB | Filed | ||
| 10.7 | Declaration of Translator for translation of Novo Porto Option Agreement from Portuguese to English Corporation incorporated by reference to the Form 10-KSB | Filed | ||
| 10.8 | Santa Clara Memorandum of Understanding incorporated by reference to the registration statement on Form SB filed | Filed | ||
| 10.9 | Declaration of Translator for translation of Santa Clara Memorandum of Understanding from Portuguese to English Corporation incorporated by reference to the registration statement on Form SB filed | Filed | ||
| 10.10 | Assignment of Ouro Mil Memorandum of Understanding to Aurora Gold Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.11 | Ouro Mil Memorandum of Understanding Corporation incorporated by reference to the registration statement on Form SB filed | Filed | ||
| 10.12 | Declaration of Translator for translation of Ouro Mil Memorandum of Understanding from Portuguese to English Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.13 | Ouro Mil Option Agreement incorporated by reference to the Form 10-KSB | Filed | ||
| 10.14 | Declaration of Translator for translation of Ouro Mil Option Agreement from Portuguese to English incorporated by reference to the Form 10-KSB | Filed | ||
| 10.15 | Assignment of Sao Domingos Memorandum of Understanding to Aurora Gold Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.16 | Sao Domingos Memorandum of Understanding Corporation incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.17 | Declaration of Translator for translation of Sao Domingos Memorandum of Understanding from Portuguese to English incorporated by reference to the registration statement on Form SB | Filed | ||
| 10.18 | Săo Domingos Option Agreement incorporated by reference to the Form 10-KSB | Filed | ||
| 10.19 | Declaration of Translator for translation of Săo Domingos Option Agreement from Portuguese to English incorporated by reference to the Form 10-KSB | Filed | ||
| 10.20 | Santa Isabel Option Agreement incorporated by reference to the Form 10-KSB | Filed | ||
| 10.21 | Declaration of Translator for translation of Santa Isabel Option Agreement from Portuguese to English incorporated by reference to the Form 10-KSB | Filed | ||
| 10.22 | Săo Joăo Option Agreement incorporated by reference to the Form 10-KSB | Filed |
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| Exhibit | Description | Status | ||
| 10.23 | Declaration of Translator for translation of Săo Joăo Option Agreement from Portuguese to English incorporated by reference to the Form 10-KSB | Filed | ||
| 10.24 | Piranhas Memorandum of Understanding incorporated by reference to the Form 10-KSB | Filed | ||
| 10.25 | Declaration of Translator for translation of Piranhas Memorandum of Understanding from Portuguese to English incorporated by reference to the Form 10-KSB | Filed | ||
| 10.26 | Branca de Neve Memorandum of Understanding incorporated by reference to the Form 10- QSB | Filed | ||
| 10.27 | Declaration of Translator for translation of Branca de Neve Memorandum of Understanding from Portuguese to English incorporated by reference to the Form 10-QSB | Filed | ||
| 10.28 | Bigode Memorandum of Understanding incorporated by reference to the Form 10-QSB | Filed | ||
| 10.29 | Declaration of Translator for translation of Bigode Memorandum of Understanding from Portuguese to English incorporated by reference to the Form 10-QSB filed | Filed | ||
| 10.30 | Santa Lucia Memorandum of Understanding incorporated by reference to the Form 10-QSB | Filed | ||
| 10.31 | Declaration of Translator for translation of Santa Lucia Memorandum of Understanding from Portuguese to English incorporated by reference to the Form 10-QSB | Filed | ||
| 10.34 | Settlement Agreement dated as of August 9, 2007 between the Company and Luis Mauricio incorporated by reference to the Form SB-2 | Filed | ||
| 10.35 | Form of Subscription Agreement between the Selling Stockholders and the Company incorporated by reference to the Form SB-2 | Filed | ||
| 10.36 | Comandante Araras Memorandum of Understanding incorporated by reference to the Form 10-KSB | Filed | ||
| 10.37 | 2007 Stock Option Plan incorporated by reference to the Form 10-KSB | Filed | ||
| 10.38 | Asset Purchase Agreement dated June 15, 20102010 incorporated by reference to the registration statement on Form S-1/A | Filed | ||
| 10.39 | Asset Purchase Agreement dated June 14, 2011 incorporated by reference to the 8-K | |||
| 31.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Included | ||
| 32.1 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | Included | ||
| 99.1 | Corporate Governance Principles incorporated by reference to the Form 10-KSB filed on March 25, 2004 (SEC File No. 000-24393- 04689262). | Filed | ||
| 101* | Financial statements from the quarterly report on Form 10-Q of Aurora Gold Corporation for the quarter ended March 31, 2012, formatted in XBRL: (ii) the Balance Sheets, (ii) the Statements of Operations; (iii) the Statements of Cash Flows, and (iv) the Statements of Stockholders’ Equity (Deficit). | Included | ||
| * | In accordance with Rule 406T of Regulation S-T, the XBRL (“eXtensible Business Reporting Language”) related information is furnished and not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections. |
* Filed Herewith
| 30 | AURORA GOLD CORPORATION |
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, Aurora Gold Corporation has caused this report to be signed on its behalf by the undersigned duly authorized person.
AURORA GOLD CORPORATION
/s/ Lars Pearl
Name: Lars Pearl
Title: President and CEO
Principal Executive Officer
Dated: May 14, 2012
/s/ Ross Doyle
Name: Ross Doyle
Title: CFO
Principal Financial Officer
Dated: May 14, 2012
/s/ Agustin Gomez de Segura
Name: Agustin Gomez de Segura
Title: Director
Dated: May 14, 2012
| 31 | AURORA GOLD CORPORATION |
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Lars Pearl, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended March 31, 2012, 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 officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) 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 weaknesses 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 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.
/s/ Lars Pearl
Lars Pearl
Chief Executive Officer
Dated: May 14, 2012
CERTIFICATIONS PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Ross Doyle, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Aurora Gold Corporation;
2. Based on my knowledge, this quarterly 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 officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) 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 weaknesses 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 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.
/s/ Ross Doyle
Ross Doyle
Chief Financial Officer
Dated: May 14, 2012
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Aurora Gold Incorporated (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Lars Pearl, President, Chief Executive Officer of the Company, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:
| 1. | The Report 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 aspects, the financial condition and result of operations of the Company. |
/s/ Lars Pearl
Lars Pearl
Chief Executive Officer
Dated: May 14, 2012
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Aurora Gold Corporation (the “Company”) on Form 10-Q as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ross Doyle, Chief Financial Officer and Director of the Company, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:
| 1) | The Report 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 aspects, the financial condition and result of operations of the Company. |
/s/ Ross Doyle
Ross Doyle
Chief Financial Officer
Dated: May 14, 2012