(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2004 OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________
Commission file number: 000-27791
Nevada 98-0412805
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State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization
#1458 - 409 Granville St.
Vancouver, British Columbia V6C 1T2
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(Address of principal executive offices) (Zip Code)
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Issuer's telephone number: 604-687-4150
Check whether the issuer (1) 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.
Yes [X] No [ ]
Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the issuer's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for most recent fiscal year: Nil
State the aggregate market value of the voting and non-voting common equity held by non-affiliates (33,396,150) shares) based on the average bid and asked price as of August 19, 2004 being $.14 per share: $4,675,461.
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 52,119,589 shares of Common Stock as of August 19, 2004.
Documents Incorporated by Reference: None
NOTE REGARDING FORWARD LOOKING STATEMENTS
Except for statements of historical fact, certain information contained herein constitutes "forward-looking statements," including without limitation statements containing the words "believes," "anticipates," "intends," "expects" and words of similar import, as well as all projections of future results. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or achievements of the Company to be materially different from any future results or achievements of the Company expressed or implied by such forward-looking statements. Such factors include, but are not limited to the following: the Company's lack of an operating history, the Company's minimal level of revenues and unpredictability of future revenues; the Company's future capital requirements to develop additional property within the defined claim; the risks associated with rapidly changing technology; the risks associated with governmental regulations and legal uncertainties; and the other risks and uncertainties described under "Description of Business - Risk Factors" in this Form 10-KSB. Certain of the Forward-looking statements contained in this annual report are identified with cross-references to this section and/or to specific risks identified under "Description of Business - Risk Factors".
PART 1
ITEM 1. DESCRIPTION OF BUSINESS.
History
Apolo Gold, Inc, (the Company) was incorporated in March 1997 under the laws of the State of Nevada for the purpose of financing and operating precious metals concessions.
The Company initially explored opportunities in Latin and South America. This resulted in the formation of a subsidiary, Compania Minera Apologold, C.A. a Venezuela corporation and on May 18, 1999 the Venezuela subsidiary entered into an agreement with Empresa Proyectos Mineros Goldma, C.A. in Caracas Venezuela, to acquire the diamond and gold mining concession known as Codsa 13, located in the Gran Sabana Autonomous Municipality, State of Bolivar, Venezuela.
On April 19, 2001, the Company executed an amendment to the 1999 agreement re CODSA 13 and then conducted exploration on the property from May 1, 2001 to July 2001. A combination of poor test results and disagreements with the concession holder resulted in the Company closing the camp on August 6, 2001. A cancellation letter was delivered to Empresa Proyectos Goldma C.A. advising them that the Company was abandoning the Codsa 13 site. The Venezuelan subsidiary has been inactive since 2001.
Coincident with exploration in Venezuela, Company management had spent several years exploring opportunities in Indonesia, and in particular, on the island of Sumatra. In February 2001, the Company - signed a letter of Intent re property in South Lampung, Sumatra, but certain local legal issues prevented further pursuit of this site and the agreement was subsequently cancelled.
On April 16, 2002, the Company executed an agreement with Pt. Metro Astatama, of Jakarta, Indonesia, for the mining rights to property west of Bandar Lampung, on the island of Sumatra, Indonesia. The property is known as Nepal Umbar Picung ("NUP") and it has a KP, Number KW. 098PP325. A KP is a mineral tenement license for both Exploration and Exploitation and must be held by an Indonesian entity. The "NUP" is 733.9 hectares in size and the agreement gives Apolo an 80% interest while its partner, Metro Astatama has 20%. These are not crown granted claims, but are claims owned privately by citizens of Indonesia. While PT Metro Astatama has a 20% interest, the Company is entitled to recover all of its costs re development of the "NUP" including property payments before Pt Metro participates in the profits.
The NUP property, has characteristics of Indonesian volcanic-hosted, low-sulphidation, ephitermal gold-silver deposit Mio-Pliocene age, hosted within the Sunda magmatic arc and spatially associated with the Sumatra Fault System. The property displays high silver to gold ratios such as most of the Sunda arc deposits. Five hundred kilometers northward, along the same Sumatra Fault is located the richest gold mine in Indonesia, the Lebong Donok. This mine was first put into production in 1896.
The total purchase price for "NUP" is $375,000. To date the Company has made payments amounting to $150,000 on the property, with a balance remaining of $225,000. The Company is obligated to make semi-annual payments in March and September each year of $25,000 payment until the balance owing is retired.
Apolo Gold Inc. commenced geology mapping and sampling in the summer of 2002. Previous exploration had been undertaken on the NUP property including trenching, mapping and sampling. Previous workings had identified seven structures that required further evaluation. In July 2002, Apolo Gold Inc. engaged the services of Alex Boronowski, P.Geo, F.G.A. to provide a Preliminary Independent Geological Report. This report was received in September 2002 and it recommended a drilling program be carried out to further define the structures. The Company followed up with an Independent Report from Peter Bojtos, P.Eng. to review all existing data, and comment on proposals for moving forward. Mr. Bojtos issued a report in December 2002 that confirmed existing recommendations for drilling.
Upon review of the recommendations, the Company proceeded with an initial drilling program in April 2003 which completed in June 2003. Approximately 500 meters of drilling was completed and an ore zone was identified. While 80,000 tonnes of mineralized rock was identified, it was recommended that a new exploration adit be driven to cross cut both shaft #5 and shaft #4 where good results had previously been identified. The 80,000 tonnes of mineralized rock averaged 8 grams of gold per tonne and 250 grams of silver per tonne. Based on current values of gold and silver, and using 90% recovery for gold and 70% recovery for silver, recovery values are estimated to be in excess of $10,000,000.
The Company continues to work on the adit and will advise shareholders when the adit is completed.
On December 10, 2003, the Company, and its 20% partner, PT Metro Astatama, executed an Agreement with PT Karya Bukit Utama of Bandar Lampung, Sumatra for the acquisition of mining rights to a property adjoining the "NUP" called "KBU". PT Karya Bukit Utama holds a permit from the Ministry of Mines and Energy, Republic of Indonesia, in the form of Mining Exploitation Authorization KP Number KW 96 0082 for 28 hectares and KP Number KW 96 PP 0083 for 905.3 hectares. These KP's are free and clear of any liens or encumbrances. The agreement includes the payment of 3,000,000 common shares to PT Metro Astatama on three separate dates, January 15, 2004, for 1,000,000 common shares and June 15, 2004 and January 15, 2005 for 1,000,000 common shares each. The stock due January 15, 2004 has been issued while the stock due June 15, 2004 will not be issued until September 15, 2004 because of a revision in the payment schedule as outlined below. Under the terms of the Agreement, the Company will hold an 80% interest and PT Metro Astatama will hold a 20% interest. The Company will also be allowed to recover all of its operating costs, including property payments, before PT Metro will participate in any profits.
The Company will pay to PT Karya Bukit Utama a total of $2,500,000 between 2003 and December 15, 2007 to acquire the mining rights to the property.
This Agreement was amended on July 14, 2004 wherein the June 30, 2004 payment of $150,000 and the December 31, 2004 payment of $250,000 were revised as follows:
Amount paid to June 30-04 $15,000
July 15, 2004 $ 60,000
August 15, 2004 $ 50,000
September 15, 2004 $ 50,000
October 15, 2004 $ 25,000
November 15, 2004 $ 25,000
December 15, 2004 $ 75,000
January 15, 2005 $ 50,000
February 15, 2005 $ 50,000
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TOTAL $400,000
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The Company has made the payment due July 15, 2004. Payments in 2005 through 2007 will be semi annual at June 15 and December 15 each year in the amount of $250,000 each.
As part of the acquisition of the mineral rights to the "KBU", the Company also acquired the use of a Mining Mill located on the Karya Bukit Utama property. This mill has been inactive since 1997-8 and required extensive overhaul to restore to proper operating condition. This overhaul has now been completed and the Company expects to operate on a daily basis going forward. It is anticipated that the Company will be in production 6 days per week and initially for 8 hours per day. In the next 30 days, it is expected that operations will expand to 16 hours per day.
Operations
The "NUP" and the adjoining "KBU" property in Sumatra, Indonesia is the only project currently being developed by the Company. All previous exploration activities in other parts of the World have been terminated.
The Company employs approximately 15 people locally at the mine site near Bandar Lampung, Sumatra. All of these employees are paid the local rate for their services. As well, the Company has two consultants working full time at the mine site who offer special mechanical, welding, and general operating skills not found locally. The President and CEO of Apolo Gold Inc. is located in Sumatra and directs all activities regarding the mining and exploration program.
Corporate headquarters are located in Vancouver B.C. where the Company leases space at #1458-409 Granville St. V6C 1T2. The Company also maintains an office in Bandar Lampung, Sumatra.
Principal Markets
The products produced by the Company are sold on world markets at prices established by market forces. These prices are not within the control of the Company.
Government Regulation
The Company is aware of environmental requirements in the operation of a concession. The Company is subject to regular inspections by Government authorities and is also subject to a royalty of 3.5% on production. The Company is comfortable with the requirements and regulations and will abide by them.
Risk Factors
1. The Company has no record of earnings. It is also subject to all the risks inherent in a developing business enterprise including lack of cash flow, and no assurance of recovery of precious metals.
2. The Company's success and possible growth will depend on its ability to recover precious metals, process them, and successfully sell them on world markets. It is dependent upon the market's acceptance of the quality of the product presented for sale.
3. Liquidity and need for additional financing is a concern for the Company. At the present time, the Company does not have sufficient cash to finance its operations if its production schedule is delayed further. The Company is dependent on the ability of its management team to obtain the necessary working capital to operate successfully. There is no assurance that the Company will be able to obtain additional capital as required, or if the capital is available, to obtain it on terms favorable to the Company. The Company may suffer form a lack of liquidity in the future that could impair its production efforts and adversely affect its results of operations.
4. Foreign Operations Risks are significant as its principal business operations will be located in Sumatra, Indonesia. Although management intends to and has abided by all laws of the country, including procurement of all necessary permits, licenses, and other regulatory approvals, the Company has no control over the regulatory climate and the possible changes in laws and regulations. There are no known political issues in South Sumatra where the property is located and the Company is pleased with the level of cooperation needed to develop the project as contemplated.
5. Competition is more in the area of ability to sell at world prices, that the Company cannot control, and the Company competes for access to the world markets with its products.
6. The Company is wholly dependent at the present upon the personal efforts and abilities of its Officers and Directors, who exercise control over the day-to-day affairs of the Company.
7. There are currently 52,119,589 common shares outstanding at August 19, 2004 out of a total authorized capital of 200,000,000 shares. There are 147,880,411 shares of the Company unissued. The Board of Directors has the power to issue such shares, subject to shareholder approval, in some instances. Although the Company presently has no commitments or contracts to issue any additional shares to other persons, it may in the future attempt to issue shares to acquire properties, equipment, or other products, or for corporate purposes. Any additional issuance of shares by the Company from its authorized but unissued shares, would have the effect of diluting the interest of existing shareholders.
8. There are no dividends anticipated by the Company. At the present time, the Company intends to focus on raising additional capital and development of its NUP property in Sumatra.
Company's Office
The Company's administrative headquarters are located at #1458-409 Granville St, Vancouver, BC, Canada V6C 1T2 and its telephone number is 604-687-4150. The Company also maintains an office in Bandar Lampung, Sumatra, Indonesia.
ITEM 2 - Description of Property
Location and Title
On April 16, 2002, the Company acquired the mining rights to a gold/silver property from Pt. Napal Umbar Picung known as "NUP". This gold-silver property is located 48 kilometers south west of Bandar Lampung on the Island of Sumatra, Indonesia. This is a 733.9 hectare gold-silver property referred to as KP Number KW. 098PP325. The property has a mineral tenure license for exploration and exploitation and is held in the name of Napal Umbar Picung, a requirement under Indonesian law. The KP is in good standing and has been in existence for 10 years. The property is in good standing and all payments required to date, $150,000, have been made. The total purchase price for mining rights to the NUP property is $375,000 and currently, a balance of $225,000 is outstanding.
On December 10, 2003, the Company and its 20% partner, PT Metro Astatama, acquired the mining rights to a gold/silver property from Pt Karya Bukit Utama of Bandar Lampung, Sumatra. This property is directly adjoining the "NUP" property above and consists of a total of 933.3 hectares over two KP's. The first KP is KW 96 0082 for 28 hectares and the second KP is KW 96 PP 0083 for 905.3 hectares. These KP's are free and clear of any liens or encumbrances. The total purchase price of these claims is $2,500,000 plus issuance of 3,000,000 common shares of the Company to PT Metro Astatama. The property is in good standing and all payments required to date, $175,000, have been made. The total purchase price for the mining rights for the "KBU" property is $2,500,000. Currently, a balance of $2,325,000 remains outstanding. The Company will own an 80% interest in the mining rights to the "KBU" property while PT Metro will hold a 20% interest. The Company will recover all operating costs and property payments prior to PT Metro Astatama participating in any operating profits.
ITEM 3 - Legal Proceedings
The Company is not a party to any pending or threatened litigation and to its knowledge, no action, suit or proceedings has been threatened against its officers and its directors.
ITEM 4 - Submission of Matters to a Vote of Security Holders
None. No matters were submitted during the fiscal year covered by this report to a vote of security holders.
PART II
ITEM 5 - Market for Common Equity and Related Stockholder Matters
The Company's common stock has been quoted on the National Association of Securities Dealers' Over-the-Counter market since May 17,2000. There is no other public trading market for the Company's equity securities.
The following table summarizes trading in the Company's common stock, as provided by quotations published by the OTC Bulletin Board for the periods as indicated. The quotations reflect inter-dealer prices without retail mark-up, markdown or commission, and may not represent actual transactions.
Quarter Ended High Bid Low Bid ------------- -------- ------- Sept 30, 2003 $0.07 $0.07 Dec 31, 2003 $0.35 $0.32 March 31,2004 $0.30 $0.26 June 30, 2004 $0.20 $0.19 |
As of August 19, 2004, there were 40_holders of record of the Company's common stock. That does not include the number of beneficial holders whose stock is held in the name of broker-dealers or banks. As of August 19, 2004, there are 35,344,000 shares in broker/dealer accounts.
The Company has not paid, and, in the foreseeable future, the Company does not intend to pay any dividends.
Equity Compensation Plan Information
During the fiscal year the Company has adopted two Stock Option Plans. The plans "Apolo Gold Inc., 2004 Stock Option Plan" and "Apolo Gold Inc., 2004A Stock Option Plan (the "Plans"). The Plans provide that the Board shall exercise its discretion in awarding options under the Plan, not to exceed 10,000,000 shares for the 2004 Stock Option Plan and 5,000,000 shares for the 2004A plan.
The Company still has outstanding options from previous plans adopted. In August, 2000, Stock Option Plan #1 was created for a total of 5,000,000 shares. At the present time there are still 2,210,000 options outstanding and they are held by the three directors. Mr. Levasseur has options of 800,000, Mr. Dinning has 700,000 and Mr. Lee has 710,000, all at a price of $0.14 per share.
In May, 2002, Stock Option Plan #2 was created for 5,000,000 shares. At the present time there are still 2,100,000 options outstanding and they are equally held by the three directors at 700,000 shares each. The price on this plan was $0.09 per share.
The per share option price for the stock subject to each option shall be as the Board may determine. All options must be granted within ten years from the effective date of the Plan. There is no express termination date for the options although the Board may vote to terminate the Plan.
Plan category Number of securities to Weighted average Number of securities
be issued upon exercise exercise price of remaining available for
of outstanding options, outstanding options, future issuance
warrants and rights warrants and rights
Equity compensation plans
approved by security 0 0
holders
Equity compensation plans
not approved by security 8,460,000 0.13 788,888
holders
Total 8,460,000 0.13 788,888
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The three directors hold a total of 6,810,000 of the outstanding options of 8,460,000 at June 30, 2004.
ITEM 6 - Management's Discussion and Analysis of Financial Condition and Results of Operations
General Overview
Apolo Gold, Inc. ("Company") was incorporated in March 1997 under the laws of the State of Nevada. Its objective was to pursue mineral properties in South America, Central America, North America and Asia. The Company incorporated a subsidiary - Compania Minera Apologold, C.A in Venezuela to develop a gold/diamond mining concession in Southeastern Venezuela. Development work was terminated in August 2001, due to poor testing results and the property abandoned. This subsidiary company has been inactive since 2001.
On April 16, 2002, the Company announced the acquisition of the mining rights to a property known as the Napal Gold Property, ("NUP"). This property is located 48 km south-west of Bandar Lampung, Sumatra, Indonesia. The property consists of 733.9 hectares and possesses a Production Permit (a KP) # KW. 098PP325. There has been previous exploration work carried out, consisting of approximately 50 trenches, from 100 feet to 1,000 feet, across the mineralization, and 7 parallel veins have been exposed by trenching across mineralized zones. The Napal Gold Property is in an area in Indonesia with a history of mining activity. Several major mining companies are active in Indonesia where the highlights include; the ability to control mineral rights and their development, low cost operations, and in a country with a history of mining success that encourages foreign investment and redemption of capital.
The terms of the Napal Gold Property call for a total payment of $375,000 US over a six-year period of which a total of $150,000 have been made to date. Payments of $25,000 are due in March and September each year until the total obligation is retired. The next payment is due September 15, 2004.
In addition to the cash payments, the Company issued 3,000,000 restricted common shares at $0.11 cents per share for a consideration of $330,000 to PT Metro Astatama, who are 20% partners in the project. The PT Metro Astatama participation is after the Company recovers all of its operating costs, including all property payments as due.
During the fiscal year ending June 30, 2003, the Company engaged two independent consultants to assist in evaluation of the property and to assist in development of a necessary program to determine values potential operating alternatives.
The Company in the summer of 2002 commenced with mapping and sampling with trenching and sampling of 12 trenches for a total of 1,189 meters (3,900 ft). This was followed up with a drilling project of 500 meters (1,640 ft). Sampling results indicated a large area of good anomalous gold-silver and many lenses of high-grade gold and silver. Over the past 15 years, other companies have carried out drilling of 36 holes totaling 10,000 feet on this property. With the additional work done in the spring and summer of 2003, there are now 43 trenches completed averaging 3 feet wide, 12 feet deep for a total of 12,000 feet of trenching. There were also in excess of 2,000 rock samples sent out for analysis. All trenches, drill holes, and rock samples are from a 5 hectare area on the "NUP" property.
As a result of the work program into the fall of 2003, the Company identified a high-grade zone of about 80,000 tons of gold-silver mineralization which showed in excess of 7 grams gold per ton and in excess of 160 grams of silver per ton.
This area is located approximately 1 mile from the mill site, which is located on the adjoining property known as the "KBU".
On December 10, 2003, the Company, and its partner, PT Metro Astatama, acquired the mining rights to a property directly adjoining the "NUP" property known as the "KBU" property. The property mining rights were acquired from PT Karya Bukit Utama for a total cash consideration of $2,500,000. This included an initial down payment of $50,000 plus a payment schedule of $500,000 per year until the balance is retired. To date, the Company has paid a total of $175,000 of the $2,500,000 owing. On July 14, 2004, an amendment was executed whereby the June 30 and December 15, 2004 payments totaling $400,000 were amended to monthly payments up to February 15, 2005 totaling $400,000. The next payment is due August 15, 2004 for $50,000. In addition to the cash payment of $2,500,000, the Company is obligated to pay to PT Metro Astatama a total of 3,000,000 common shares based on 1,000,000 due early in 2004(already paid) and 1,000,000 due in the summer of 2004 (not yet paid) and 1,000,000 in January 2005.
The acquisition of mining rights to the "KBU" also included the exclusive use of a mill capable of 250-300 tons per day in production. This mill is located on the "KBU" property and has been inactive for approximately 7 years. Initially, the Company thought only minor repairs were necessary but discovered in the spring of 2004, that more extensive overhaul work was necessary in order to have a functional mill. This mill is capable of 15 tons per hour and it is the intention of the Company to operate this mill initially at 8 hours per day, increasing to 16 hours within 30 days. The Company is in the process of confirming the necessary permits to operate beyond 8 hours per day. The mill is currently operating at 15 tons per hour.
There has been significant major work previously carried out on the "KBU" property. This includes 38 trenches across the mineralization zones, 12 shafts, and 1,200 feet of underground work completed. Over the past 12 years, a total of 42 diamond drill holes have been completed. Previous public calculations by professional engineers/geologists, have indicated that the "KBU" resource contains an initial inferred resource in excess of 1,000,000 ounces of gold equivalent, valued at current prices.
The Company has spent several months this year identifying potential mining areas on the "KBU" property.
Initially the Company intends to mine from an area known as Trench 25, located not far from the mill. Various assays have been completed and delivered to Intertek Testing Services in Jakarta for analysis. The Company is awaiting the results.
Preliminary assays show gold of 4 grams per ton and silver of 225 grams per ton. These are initial assays only and more testing will be undertaken in order to assess the entire area known as Trench 25.
The Company encountered significant delays regarding completion of the overhaul of the mill and in preparation of the mill site for production. Included in this is ensuring a continuous water supply which varies during the season. At certain times of the year, water will have to be pumped from a nearby valley to ensure water supply is sufficient for production. To this end, approximately 600 feet of piping has been installed with an incline of 85 feet. A pump has been installed to move this water to the pond for milling purposes.
The Company intends to raise additional capital in order to ensure it has sufficient resources to execute its plan for production. The Company is exploring loans, equity and joint ventures as possible alternatives. There is no assurance that said funds can be obtained for the program.
The Company currently may not have sufficient funds to carry out its proposed programs and there is no assurance that the necessary funds required will be raised.
Results of Operations - Period From July 01, 2003 to June 30, 2004
REVENUES: The Company had no revenues in the past fiscal year as it focused on preparation for production by completing necessary testing, including trenching, sampling, and an initial drilling program.
During the fiscal year ending June 30, 2004, the Company had exploration costs of 397,395 as compared to 353,506 the previous year. This included the cost of all consultants engaged regarding the development of the property, drilling costs, and the cost of trenching, mapping etc.
EXPENSES: During the year ending June 30 2004, the Company incurred total expenses of $788,700 compared to $685,997 the previous year.
These expenses were all related to exploration costs re the Napal Gold Property in Sumatra, Indonesia.
Consulting and professional fees were down this year to $216,796 from $258,000 the previous year.
The Company continues to carefully control its expenses, and intends to seek Additional financing to ensure it has sufficient resources to undertake its production program and continue its exploration and development program on the two properties. There is no assurance that the Company will be successful in its attempts to raise additional capital. The Company is currently negotiating with various parties regarding additional financing. The outcome of this is uncertain at this time.
The Company has no employees in its head office at the present time other than its Officers and Directors, and engages personnel through consulting agreements where necessary as well as outside attorneys, accountants and technical consultants. The mine site employs 15 people who are paid weekly in cash as is the custom in Sumatra.
Cash on hand at June 30, 2004 was $375,000 and the Company recognizes it may not have sufficient funds to conduct its affairs. It fully intends to seek financing by way of loans, private placements or a combination of both in the coming months.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its development to date by way of sale of common stock and with loans from a shareholders of the Company. The Company currently has total debts of $26,133, plus loans from related parties of $33,333.
At August 12, 2004, the Company had 52,119,589 shares of common stock outstanding and has raised total capital to date of approximately $ 4,338,000.
During the year, the Company raised a total of $1,007,500 by way of sale of common stock. Included in this was a private placement of 1,000,000 restricted common shares sold to M. Levasseur and Robert Dinning at $0.30 each. Each director acquired 500,000 restricted common shares at the stated $0.30 per share. In comparison, a total of $270,000 was raised the previous year. The funds allowed the Company to complete the overhaul of the mill, and commence production at the mine site in Sumatra.
The Company is aware that it will require additional capital during the current fiscal year to assist in the development of its property. It intends to seek additional capital by private placement, loans or a combination of both.
INFLATION
Inflation has not been a factor during the fiscal year ending June 30, 2004. While inflationary forces are showing some signs of increasing in the next year, it is not considered a factor in capital expenditures or production activities.
Item 7. Financial Statements.
APOLO GOLD, INC.
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT F-1
FINANCIAL STATEMENTS
Consolidated Balance Sheets F-2
Consolidated Statements of Operations F-3
Consolidated Statement of Stockholders' Equity (Deficit) F-4
Consolidated Statements of Cash Flows F-6
NOTES TO FINANCIAL STATEMENTS F-7
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Board of Directors
Apolo Gold, Inc.
Vancouver, British Columbia
CANADA
Report of Independent Registered Public Accounting Firm
We have audited the accompanying consolidated balance sheets of Apolo Gold, Inc., an expoloration stage company and Nevada corporation, as of June 30, 2004 and 2003, and the related consolidated statements of operations, cash flows, and stockholders' equity (deficit) for the years then ended and for the period from April 16, 2002 (inception of exploration stage) through June 30, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Apolo Gold, Inc. as of June 30, 2004 and 2003, and the results of its operations and its cash flows for the years then ended and for the period from April 16, 2002 (inception of exploration stage) through June 30, 2004, in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 10 to the financial statements, the Company has no revenues and limited cash. In addition, the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. Management's plans regarding those matters also are described in Note 10. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
July 21, 2004
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
June 30, June 30,
2004 2003
----------- -----------
ASSETS
CURRENT ASSETS
Cash $ 375,385 $ 553
Prepaid expenses 6,840 --
----------- -----------
Total Current Assets 382,225 553
----------- -----------
PROPERTY, NET OF DEPRECIATION 58,027 --
----------- -----------
MINERAL PROPERTIES -- --
----------- -----------
TOTAL ASSETS $ 440,252 $ 553
=========== ===========
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 26,133 $ 19,302
Loans payable, related parties 33,333 28,063
Accrued officer wages -- 7,920
----------- -----------
Total Current Liabilities 59,466 55,285
----------- -----------
COMMITMENTS AND CONTINGENCIES -- --
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 200,000,000 shares authorized, $0.001
par value; 51,969,589 and 38,294,589 shares
issued and outstanding, respectively 51,969 38,294
Additional paid-in capital 4,286,736 3,100,511
Subscriptions receivable -- (25,000)
Accumulated deficit prior to exploration stage (1,862,852) (1,862,852)
Deficit accumulated during exploration stage (2,095,067) (1,306,367)
Accumulated other comprehensive income -- 682
----------- -----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) 380,786 (54,732)
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $ 440,252 $ 553
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The accompanying notes are an integral part of these financial statements.
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
Period from
April 16, 2002
(Inception of
Year Ended Year Ended Exploration Stage)
June 30, June 30, Through
2004 2003 June 30, 2004
------------ ------------ --------------
REVENUES $ -- $ -- $ --
------------ ------------ ------------
EXPENSES
Consulting and professional fees 216,796 258,000 494,796
Exploration costs 397,395 353,506 1,155,901
General and administrative expenses 174,509 74,491 267,177
------------ ------------ ------------
TOTAL EXPENSES 788,700 685,997 1,917,874
------------ ------------ ------------
LOSS FROM OPERATIONS (788,700) (685,997) (1,917,874)
OTHER INCOME (EXPENSE)
Loss on sale of mining equipment -- (45,000) (177,193)
------------ ------------ ------------
LOSS FROM OPERATIONS (788,700) (730,997) (2,095,067)
INCOME TAXES -- -- --
------------ ------------ ------------
NET LOSS (788,700) (730,997) (2,095,067)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation gain (loss) (682) 682 --
------------ ------------ ------------
COMPREHENSIVE INCOME (LOSS) $ (789,382) $ (730,315) $ (2,095,067)
============ ============ ============
NET LOSS PER SHARE, BASIC AND DILUTED $ (0.02) $ (0.02)
============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING, BASIC AND DILUTED: 47,207,499 32,494,605
============ ============
|
The accompanying notes are an integral part of these financial statements.
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Common Stock Accumulated
-------------------------- Additional Deficit Prior
Number Paid-in Subscriptions to Exploration
of Shares Amount Capital Receivable Stage
------------------------- ------------- -------------- --------------
Balance, June 30, 2001 18,654,580 18,654 1,265,282 - (1,634,303)
Issuance of common stock for services at an
average of $0.05 per share 2,300,000 2,300 112,700 - -
Cancellation of stock used as payment for debt (3,000,000) (3,000) (32,000) - -
Options exercised as payment for services
at $0.05 per share 700,000 700 34,300 - -
Issuance of common stock for debt retirement
at $0.15 per share 4,421,282 4,422 658,771 - -
Issuance of stock for mining rights 3,000,000 3,000 327,000 - -
Options exercised at $0.07 per common share 2,000,000 2,000 138,000 (70,000) -
Options exercised as payment for services at
$0.11 per common share 20,000 20 2,180 - -
Net loss for the year ended June 30, 2002 - - - - (228,549)
---------- --------- ------------ --------- ------------
Balance, June 30, 2002 28,095,862 $ 28,096 $ 2,506,233 $ (70,000) $ (1,862,852)
Options exercised as payment for services
at $0.09 per common share 500,000 500 44,500 - -
Subscriptions received - - - 70,000 -
Options exercised as payment for services
at $0.05 per common share 1,300,000 1,300 67,700 - -
Options exercised for cash of $150,000 and services
at $0.06 per common share 3,400,000 3,400 201,600 - -
Options exercised as payment of legal services
at $0.04 per common share 39,000 39 1,521 - -
---------- --------- ------------ --------- ------------
Balance Forward 33,334,862 $ 33,335 $ 2,821,554 $ - $ (1,862,852)
|
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(Continued)
Accumulated Accumulated Total
Deficit During Other Stockholders'
Exploration Comprehensive Equity
Stage Income (Deficit)
-------------- ---------------- -------------
Balance, June 30, 2001 - - (350,367)
Issuance of common stock for services at an
average of $0.05 per share - - 115,000
Cancellation of stock used as payment for debt - - (35,000)
Options exercised as payment for services
at $0.05 per share - - 35,000
Issuance of common stock for debt retirement
at $0.15 per share - - 663,193
Issuance of stock for mining rights - - 330,000
Options exercised at $0.07 per common share - - 70,000
Options exercised as payment for services at
$0.11 per common share - - 2,200
Net loss for the year ended June 30, 2002 (575,370) - (803,919)
---------- --------- ----------
Balance, June 30, 2002 $ (575,370) $ - $ 26,107
Options exercised as payment for services
at $0.09 per common share - - 45,000
Subscriptions received - - 70,000
Options exercised as payment for services
at $0.05 per common share - - 69,000
Options exercised for cash of $150,000 and services
at $0.06 per common share - - 205,000
Options exercised as payment of legal services
at $0.04 per common share - - 1,560
---------- --------- ----------
Balance Forward $ (575,370) $ - $ 416,667
|
The accompanying notes are an integral part of these financial statements.
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
Common Stock Accumulated
--------------------------- Additional Deficit Prior
Number Paid-in Subscriptions to Exploration
of Shares Amount Capital Receivable Stage
--------------------------- -------------- ------------ ---------------
Balance Forward 33,334,862 $ 33,335 $ 2,821,554 $ - $ (1,862,852)
Issuance of stock for services at $0.08 per share 600,000 600 47,400 - -
Issuance of stock for debt
at $0.06 per common share 2,348,615 2,348 138,568 - -
Options exercised for cash at
$0.045 per common share 1,111,112 1,111 48,889 - -
Options exercised at $0.05 per share
for subscription receivable 500,000 500 24,500 (25,000) -
Options exercised as payment for services
at $0.05 per share 400,000 400 19,600 - -
Net loss for the year ended June 30, 2003 - - - - -
Foreign currency translation gain - - - - -
--------------- ---------- -------------- ------------ ---------------
Balance, June 30, 2003 38,294,589 38,294 3,100,511 (25,000) (1,862,852)
Options exercised as payment for services 525,000 525 26,875 - -
at $0.05 per common share
Stock subscription paid - - - 25,000 -
Options exercised at $0.06 per share 11,125,000 11,125 696,375 - -
Issuance of stock for services at $0.20 per share 25,000 25 4,975 - -
Issuance of stock for property acquisition at
$0.16 per share 1,000,000 1,000 159,000 - -
Stock issued for cash at $0.30 per share 1,000,000 1,000 299,000 - -
Net loss for the year ended June 30, 2004 - - - - -
Foreign currency translation gain - - - - -
--------------- ---------- -------------- ------------ ---------------
Balance, June 30, 2004 51,969,589 $ 51,969 $ 4,286,736 $ - $ (1,862,852)
=============== ========== ============== ============ ===============
|
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY (DEFICIT)
(Continued)
Accumulated Accumulated Total
Deficit During Other Stockholders'
Exploration Comprehensive Equity
Stage Income (Deficit)
-------------- -------------- -------------
Balance Forward $ (575,370) $ - $ 416,667
Issuance of stock for services at $0.08 per share - - 48,000
Issuance of stock for debt
at $0.06 per common share - - 140,916
Options exercised for cash at
$0.045 per common share - - 50,000
Options exercised at $0.05 per share
for subscription receivable - - -
Options exercised as payment for services
at $0.05 per share - - 20,000
Net loss for the year ended June 30, 2003 (730,997) - (730,997)
Foreign currency translation gain - 682 682
-------------- -------------- -------------
Balance, June 30, 2003 (1,306,367) 682 (54,732)
Options exercised as payment for services
at $0.05 per common share - - 27,400
Stock subscription paid - - 25,000
Options exercised at $0.06 per share - - 707,500
Issuance of stock for services at $0.20 per share - - 5,000
Issuance of stock for property acquisition at
$0.16 per share - - 160,000
Stock issued for cash at $0.30 per share - - 300,000
Net loss for the year ended June 30, 2004 (788,700) - (788,700)
Foreign currency translation gain - (682) (682)
-------------- -------------- -------------
Balance, June 30, 2004 $ (2,095,067) $ - $ 380,786
============== ============== =============
|
The accompanying notes are an integral part of these financial statements.
APOLO GOLD, INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Period from
April 16, 2002
(Inception of
Year Year Exploration Stage)
Ended Ended Through
June 30, 2004 June 30, 2003 June 30, 2004
------------- ------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (788,700) $ (730,997) $(2,095,067)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation 4,464 -- 4,464
Loss on sale of mining equipment -- 45,000 177,193
Options exercised for services 27,400 -- 27,400
Stock issued for current debt -- 140,916 140,916
Stock issued for officer's wages and services -- -- 2,200
Stock issued for professional services 5,000 218,560 223,560
Stock issued for exploration costs 160,000 20,000 510,000
Expenses paid on behalf of Company -- -- 42,610
Decrease (increase) in:
Prepaid Expenses (6,840) -- (6,840)
Increase (decrease) in:
Accounts payable 6,831 414 10,716
Accrued expenses (7,920) 6,655 (1,265)
Accrued officer wages -- (25,340) (5,340)
----------- ----------- -----------
Net cash (used) by operating activities (599,765) (324,792) (969,453)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (62,491) -- (62,491)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from related party loans 5,270 28,063 33,333
Proceed from subscription receivable 25,000 -- 25,000
Proceeds from sale of common stock 1,007,500 270,000 1,347,500
----------- ----------- -----------
Net cash provided by financing activities 1,037,770 298,063 1,405,833
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH 375,514 (26,729) 373,889
Other comprehensive income (loss) - Foreign currency translation (682) 682 --
Cash, beginning of year 553 26,600 1,496
----------- ----------- -----------
Cash, end of year $ 375,385 $ 553 $ 375,385
=========== =========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ -- $ -- $ --
=========== =========== ===========
Income taxes paid $ -- $ -- $ --
=========== =========== ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued for services $ 5,000 $ 218,560 $ 223,560
Common stock issued for current debt $ -- $ 140,916 $ 140,916
Common stock issued for exploration costs $ 160,000 $ 20,000 $ 510,000
Note receivable from sale of mining equipment $ -- $ -- $ 45,000
Options exercised for services $ 27,400 $ -- $ 27,400
|
The accompanying notes are an integral part of these financial statements.
APOLO GOLD, INC.
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Apolo Gold, Inc. (hereinafter "the Company") was incorporated in March of 1997 under the laws of the State of Nevada primarily for the purpose of acquiring and developing mineral properties. The Company conducts operations primarily from its offices in Vancouver, British Columbia, Canada. In 1997, the Company formed a subsidiary corporation (Apologold C.A.) in Venezuela, which was originally used to acquire a Venezuelan mining property. The subsidiary had no financial transactions during the years ended June 30, 2003 and 2004.
Apologold C.A. began production in the State of Bolivar, Venezuela in November 1999 using an open pit mining process. In June 2001, the Company abandoned its Venezuelan property. During the year ended June 30, 2002, the Company determined that further activity in Venezuela was not economically feasible and thereafter discontinued all operations within this country.
On April 16, 2002, the Company signed an agreement to enter into a joint venture with PT Metro Astatama, a limited liability corporation, incorporated under the laws of Republic of Indonesia. Upon signing this agreement, the Company entered a new exploration stage and commenced exploration of the Napal Gold Property, not yet under production. See Note 3.
The Company's year-end is June 30.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies is presented to assist in understanding the Company's financial statements. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
In December 2002, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 148, "Accounting for Stock-Based Compensation
- Transition and Disclosure" (hereinafter "SFAS No. 148"). SFAS No. 148 amends
SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative
methods of transition for a voluntary change to the fair value based method of
accounting for stock-based employee compensation. In addition, the statement
amends the disclosure requirements of SFAS No. 123 to require prominent
disclosure in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results. The provisions of the statement are effective for
financial statements for fiscal years ending after December 15, 2002. As the
Company accounts for stock-based compensation using the intrinsic value method
prescribed in APB No. 25, "Accounting for Stock Issued to Employees", the
adoption of SFAS No. 148 has had no material impact on the Company's financial
condition or results of operations.
If certain conditions are met, a derivative may be specifically designated as a hedge, the objective of which is to match the timing of gain or loss recognition on the hedging derivative with the recognition of (i) the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk or (ii) the earnings effect of the hedged forecasted transaction. For a derivative not designated as a hedging instrument, the gain or loss is recognized in income in the period of change.
Historically, the Company has not entered into derivatives contracts to hedge existing risks or for speculative purposes. At June 30, 2004, the Company has not engaged in any transactions that would be considered derivative instruments or hedging activities.
Expenditures to develop new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines are capitalized and amortized on a units-of-production basis over proven and probable reserves. Should a property be abandoned, its capitalized costs are charged to operations. The Company charges to operations the allocable portion of capitalized costs attributable to properties sold. Capitalized costs are allocated to properties sold based on the proportion of claims sold to the claims remaining within the project area.
At June 30, 2004, the Company had net deferred tax assets calculated at an expected rate of 33% of approximately $1,310,000 principally arising from approximate net operating loss carryforward of $3,960,000 for income tax purposes, which expire in the years 2014 through 2024. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset has been established at June 30, 2004. The significant components of the deferred tax asset at June 30, 2004 and June 30, 2003 were as follows:
Year ended Year ended June
June 30, 2004 30, 2003
----------------- ----------------
Net operating loss carryforward $ 3,957,919 $ 3,169,219
================= ================
Deferred tax asset $ 1,306,113 $ 1,045,842
Deferred tax asset valuation allowance $ (1,306,113) $ (1,045,842)
|
The change in the allowance account from June 30, 2003 to June 30, 2004 was $260,271. The change in the allowance account from June 30, 2002 to June 30, 2000 was $494,000.
NOTE 3 - MINERAL PROPERTIES
At June 30, 2004, in accordance with the aforementioned agreement, the Company had paid $150,000 in cash and issued 3,000,000 shares of its common stock, with a fair market value of $330,000.
On December 12, 2003, the Company fully executed an agreement with PT Metro Astatama, to acquire certain property rights in Southern Sumatra, Indonesia. In exchange for a commitment for future incremental cash payments of $2,500,000 and 3,000,000 shares of the Company's restricted common stock, the Company will receive 933 hectares with production permit numbers KP-96PP0082 and KP-96PP0083 in place. The Company will assume all rights previously granted to PT Metro and will acquire an 80% net profits interest, while PT Metro retains the remaining 20%.
At June 30, 2004, in accordance with the aforementioned agreement, the Company had paid $115,000 in cash and issued 1,000,000 shares of its common stock, with a fair market value of $200,000.
The Company has recorded its mineral property costs as exploration expenses because there are no professional engineering studies evidencing proven and probable reserves for its mineral properties.
NOTE 4 - PROPERTY AND EQUIPMENT
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (hereinafter "SFAS No. 144"). SFAS No. 144 replaces SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." This standard establishes a single accounting model for long-lived assets to be disposed of by sale, including discontinued operations. SFAS No. 144 requires that these long-lived assets be measured at the lower of carrying amount or fair value less cost to sell, whether reported in continuing operations or discontinued operations. The Company adopted SFAS No. 144 and does not believe that the adoption will have a material impact on the financial statements of the Company at June 30, 2004.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" (hereinafter "SFAS No. 143"). SFAS No. 143 establishes guidelines related to the retirement of tangible long-lived assets of the Company and the associated retirement costs. This statement requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived assets. The Company adopted SFAS No. 143 and does not believe that the adoption will have a material impact on the financial statements of the Company at June 30, 2004.
During the year ended June 30, 2004, the Company acquired field equipment at a cost of $62,491 and recorded depreciation of $4,464 thereon. The Company owned no other equipment or furnishings in the two years ending June 30, 2004.
Property and equipment are stated at cost. Depreciation is provided using the straight-line method over the estimated useful lives of the assets. The useful lives of property, plant and equipment for purposes of computing depreciation are five to forty years.
Depreciation expense for the year ended June 30, 2004, was $4,464. The Company evaluates the recoverability of property and equipment when events and circumstances indicate that such assets might be impaired. The Company determines impairment by comparing the undiscounted future cash flows estimated to be generated by these assets to their respective carrying amounts. Maintenance and repairs are expensed as incurred. Replacements and betterments are capitalized. The cost and related reserves of assets sold or retired are removed from the accounts, and any resulting gain or loss is reflected in results of operations.
NOTE 5 - NOTE RECEIVABLE
During the year ended June 30, 2002, the Company sold all of its mining equipment at the time for a $45,000 short-term note receivable and thereby realized a loss of $132,193 on this transaction. This note, with a maturation date of September 30, 2002, has not been collected. During the year ended June 30, 2003, the Company wrote off the note with the related charge against loss on sale of equipment.
NOTE 6 - COMMON STOCK
During the year ended June 30, 2004, options to purchase 525,000 shares of common stock at $0.05 per share were exercised in exchange for services valued at $27,400 and 11,125,000 options were exercised to purchase common stock for cash of $707,500. The Company issued 1,000,000 shares of common stock as payment for property acquisition worth $160,000 (see Note 3) and an additional 1,000,000 shares of common stock were issued for $300,000 cash. The Company paid services of $5,000 with the issuance of 25,000 shares of common stock.
During the year ended June 30, 2003, options to purchase 500,000 shares of common stock at $0.09 per share were exercised in exchange for services valued at $45,000; 2,200,000 options were exercised to purchase common stock at $0.05 per share in exchange for services valued at $114,000; 39,000 options were exercised for payment of $1,560 in legal services at $0.04 per common share; and 1,111,112 options were exercised for cash of $50,000 at $0.045 per share. Options amounting to 3,400,000 shares of common stock were exercised for $150,000 cash and services valued at $55,000. The Company issued 2,348,615 shares of common stock as payment for debt worth $140,916 and 600,000 shares of common stock for services valued at $48,000. The Company received $70,000 as payment of the subscription receivable that was outstanding at June 30, 2002.
NOTE 7 - STOCK OPTIONS
The Company has four stock option plans entitled the Apolo Gold, Inc. 2000 Stock Option Plan, Apolo Gold, Inc. 2002 Stock Option Plan, Apolo Gold, Inc. 2003 Stock Option Plan and Apolo Gold, Inc. 2004 Stock Option Plan (hereinafter "the Plans") adopted in July 2000, May 2002, November 2002 and March 2004, respectively. Their purpose is to advance the business and development of the Company and its shareholders by enabling employees, officers, directors and independent contractors or consultants of the Company the opportunity to acquire a proprietary interest in the Company from the grant of options to such persons under the Plans' terms. The Plans provide that the Company's board of directors may exercise its discretion in awarding options under the Plans, not to exceed 5,000,000 for the 2000 Plan, 5,000,000 for the 2002 Plan, 7,500,000 for the 2003 Plan and 15,000,000 for the 2004 and the 2004A Plans. The Board determines the per share option price for the stock subject to each option. All options authorized by each plan must be granted within ten years from the effective date of the Plan.
There is no express termination date for the options, although the Board may vote to terminate the Plan. The exercise price of the options will be determined at the date of grant. The following is a summary of the Company's stock option plans:
Number of
securities
Number of remaining
securities to be Weighted-average available for
issued exercise price future issuance
Equity compensation plans not upon exercise of of outstanding under equity
approved by security holders outstanding options options compensation plans
-------------------------------- --------------------- ------------------ -------------------
2000 stock option plan 2,210,000 $ 0.14 -
2002 stock option plan 2,100,000 $ 0.10 -
2003 stock option plan 350,000 $ 0.05 -
2004 and 2004A stock
option plans 3,800,000 $0.16 788,000
--------------------- -------------------
Total 8,460,000 788,000
===================== ===================
|
The following is a summary of stock option activity:
Number of Shares Weighted Average
Exercise Price
-------------------- --------------------
Outstanding at June 30, 2002 2,710,000 $ 0.14
Granted 10,650,112 0.06
Exercised (7,850,112) 0.06
-------------------- --------------------
Outstanding at June 30, 2003 5,510,000 0.11
Granted 14,600,000 0.09
Exercised (11,650,000) 0.06
-------------------- --------------------
Outstanding at June 30, 2004 8,460,000 $ 0.13
==================== ====================
Options exercisable at June 30, 2004 8,460,000 $ 0.13
==================== ====================
Weighted average fair value of options
granted during 2004 $ 0.09
====================
|
The Company applies APB Opinion 25 in accounting for its stock option plans. Accordingly, no compensation or consulting costs have been recognized for the plan in fiscal 2004 or 2003. The Company granted 14,600,000 during the year ended June 30, 2004. Of the options issued, 525,000 were exercised for payment of services valued at $27,400; 11,125,000 were exercised for $707,500 in cash.
The Company granted 10,650,112 options during the year ended June 30, 2003. In the same period, 3,339,000 options were exercised for payment of services valued at $208,560: 3,400,000 were exercised for $150,000 cash and services valued at $55,000: and 1,111,112 were exercised for cash at $0.045 per share of common stock.
If compensation or consulting costs had been determined on the basis of fair value pursuant to SFAS No. 123, net loss and earnings per share would have been changed as follows:
Year Ended Year Ended
June 30, June 30,
2004 2003
------------- -------------
Net Loss:
As reported $ (788,700) $ (730,997)
Pro forma $ (2,572,117) (974,997)
|
Basic and diluted net loss per share:
As reported $ (0.02) (0.02)
Pro forma $ (0.05) (0.03)
The fair value of each option granted is estimated on the grant date using the Black-Scholes Option Price Calculation. The following assumptions were made in estimating fair value for 2004 and 2003: risk-free interest rate is 4%, volatility is 112% and 100%, respectively, and expected life is 5 years.
NOTE 8 - RELATED PARTIES
During the year ended June 30, 2004, a related party paid expenses of $33,333 on behalf of the Company. This amount, which is unsecured and non-interest bearing, is listed as a related party loan in the accompanying balance sheet.
During the year ended June 30, 2003, the Company issued 2,348,615 shares for retirement of related party debt of $140,916.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The acquisition and loan agreement, which provided for monthly payments of $5,000 and a royalty interest to the seller, were amended in April 2001 and later terminated in June 2001.
NOTE 10 - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of $788,700 for the year ended June 30, 2004 and has an accumulated deficit of $3,957,919 since inception of the Company. The Company currently has no operating mining properties, has no revenues, and has limited cash resources.
These factors indicate that the Company may be unable to continue in existence. The financial statements do not include any adjustments related to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company cannot continue existence. The Company is actively seeking additional capital and management believes that new properties can ultimately be developed to enable the Company to continue its operations. However, there are inherent uncertainties in mining operations and management cannot provide assurances that it will be successful in its endeavors. See Note 1.
The Company's management believes that it will be able to generate sufficient cash from public or private debt or equity financing for the Company to continue to operate based on current expense projections.
Item 8a. Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer / Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-14(c). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer / Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, the Company's Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal controls or in other factors that could significantly affect the internal controls subsequent to the date the Company completed its evaluation.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act
(a) Directors and Executive Officers
NAME AGE POSITION 1ST YEAR
WITH COMPANY
---- --- -------- ------------
Martial Levasseur 70 Director, President 1997
Robert E. Lee 69 Director 1997
Robert G. Dinning 65 Director, Chief Financial Officer, Secretary 2000
Business Experience
|
Martial Levasseur.
Mr. Levasseur is a founder of the Company and has served as its President since inception. Mr. Levasseur's business experience is as follows:
1993-1997 Consultant - La Rock Mining Corp. of Vancouver BC. Studying various
projects for La Rock.
1968-1993 President - Consolidated Silver Tusk Mines Ltd, in the Northwest
Territories. Managed and supervised the exploration and development
of all properties. One mine went into full production. Became Vice
President in 1994 as was busy developing other properties not
related to Consolidated Silver Tusk Mines Ltd.
1972-1993 President of Reako Exploration Ltd, in Vancouver B.C. Supervised
and managed all exploration and drilling projects for Reako, as
well as developing their iron-ore property, and bringing into
production a gold property in British Columbia.
|
Robert E. Lee.
Dental Surgeon from 1961 until 1991 when he retired from practice.
1993 - 2002 President of La Rock Mining Corp, of Vancouver BC. Handled
all administration and continued assessment of property
known as Brandy Wine. Company now called Auramex Resource
Corp where Mr. Lee currently serves as a director.
|
Robert G. Dinning C.A.
Mr. Dinning is a Chartered Accountant, and a life time member of the Alberta Institute of Chartered Accountants. Mr. Dinning has Operated his own Business and Management Consulting business since 1977, in the forestry, mining, and software/high tech industries. Mr. Dinning has been active as a Director and Officer and consultant in various public companies over the past 34 years. Prior to commencing his consulting business, Mr. Dinning was CFO and Secretary of a large publicly traded broadcast and sports Entertainment Company.
(b) Significant Employees: None
Committees: Meetings of the Board
The Company does not have a separate Compensation Committee, Audit Committee or Nominating Committee. These functions are done by the Board of Directors meeting as a whole. The Company's Board of Directors held no in person meetings during the fiscal year ended June 30, 2004. All corporate actions by the Board of Directors were unanimously consented to in writing after telephone discussion.
Audit Committee
The board of directors has not established an audit committee. The functions of the audit committee are currently performed by the entire board of directors. The Company is under no legal obligation to establish an audit committee and has elected not to do so at this time so as to avoid the time and expense of identifying independent directors willing to serve on the audit committee. The Company may establish an audit committee in the future if the board determines it to be advisable or we are otherwise required to do so by applicable law, rule or regulation.
As the board of directors does not have an audit committee, it therefore has no "audit committee financial expert" within the meaning of Item 401(e) of Regulation S-B. In general, an "audit committee financial expert" is an individual member of the audit committee who:
* understands generally accepted accounting principles and financial statements,
* is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
* has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,
* understands internal controls over financial reporting, and
* understands audit committee functions.
Board of Directors Independence
None of the Company's directors are "independent" within the meaning of definitions established by the Securities and Exchange Commission or any self-regulatory organization. The Company is not currently subject to any law, rule or regulation requiring that all or any portion of its board of directors include "independent" directors.
Director Nominees
The Company does not have a nominating committee. The board of directors, sitting as a board, selects those individuals to stand for election as members of our board. Since the board of directors does not include a majority of independent directors, the decision of the board as to director nominees is made by persons who have an interest in the outcome of the determination. The board will consider candidates for directors proposed by security holders, although no formal procedures for submitting candidates have been adopted. Until otherwise determined, not less than 90 days prior to the next annual board of directors' meeting at which the slate of board nominees is adopted, the board accepts written submissions that include the name, address and telephone number of the proposed nominee, along with a brief statement of the candidate's qualifications to serve as a director and a statement of why the shareholder submitting the name of the proposed nominee believes that the nomination would be in the best interests of shareholders. If the proposed nominee is not the security holder submitting the name of the candidate, a letter from the candidate agreeing to the submission of his or her name for consideration should be provided at the time of submission. The letter should be accompanied by a resume supporting the nominee's qualifications to serve on the board of directors, as well as a list of references.
The board identifies director nominees through a combination of referrals, including by management, existing board members and security holders, where warranted. Once a candidate has been identified the board reviews the individual's experience and background, and may discuss the proposed nominee with the source of the recommendation. If the board believes it to be appropriate, board members may meet with the proposed nominee before making a final determination whether to include the proposed nominee as a member of management's slate of director nominees submitted for shareholders for election to the board.
Among the factors that the board considers when evaluating proposed nominees are their experience in the information technology industry, knowledge of and experience with and knowledge of and experience in business matters, finance, capital markets and mergers and acquisitions. The board may request additional information from the candidate prior to reaching a determination. The board is under no obligation to formally respond to all recommendations, although as a matter of practice, it will endeavor to do so.
The board received no security holder recommendations for nomination to the board of directors in connection with the 2004 annual meeting of shareholders. There are eight director nominees for the 2004 annual meeting of shareholders, all of whom are incumbent directors standing for reelection.
Security Holder Communications with our Board of Directors
The Company provides an informal process for security holders to send communications to our board of directors. Security holders who wish to contact the board of directors or any of its members may do so by writing to Apolo Gold Inc., Suite 1458-409 Granville Street, Vancouver BC, Canada V6C 1T2. Correspondence directed to an individual board member is referred, unopened, to that member. Correspondence not directed to a particular board member is referred, unopened, to the Chairman of the Board.
Code of Ethics
Under the Sarbanes-Oxley Act of 2002 and the Securities and Exchange Commission's related rules, the Company is required to disclose whether it has adopted a code of ethics that applies to the Company's principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The Company has adopted a code of ethics that applies to its chief executive officer, chief financial officer and other officers, legal counsel and to any person performing similar functions. The Company has made the code of ethics available and intends to provide disclosure of any amendments or waivers of the code within five business days after an amendment or waiver on the Company's website wwww.apologold.com.
Compliance with Section 16(a) of Securities Exchange Act of 1934 To our knowledge, during the fiscal year ended June 30, 2004, our Directors and Officers complied with all applicable Section 16(a) filing requirements except all three directors did not timely file a Form 4 re granting of Options which were reported on Form 5. This statement is based solely on a review of the copies of such reports that reflect all reportable transactions furnished to us by our Directors and Officers and their written representations that such reports accurately reflect all reportable transactions.
Family Relationships
There is no family relationship between any Director, executive or person
nominated or chosen by the Company to become a Director or executive officer.
Item 10. Executive Compensation
The following table shows for the fiscal years ending June 30, 2004, 2003 and 2002, the compensation awarded or paid by the Company to its Chief Executive Officer. No executive officers of the Company had total salary and bonus exceeding $100,000 during such year.
----------------------------------------------------------------------------------------------------------------
Summary Compensation Table
----------------------------------------------------------------------------------------------------------------
Long Term Compensation
----------------------------------------------------------------------------------------------------------------
Annual Compensation Awards Payouts
-----------------------------------------------------------------------------------------------------------------
Other Annual Securities
Salary Compensation ($) Underlying
Name and Principle Position Year ($) Options (#) All Other Compensation ($)
-----------------------------------------------------------------------------------------------------------------
Martial Levasseur President/CEO 2004 24,000 0 1,000,000 Common 0
-----------------------------------------------------------------------------------------------------------------
Martial Levasseur President/CEO 2003 18,000 0 700,000 Common $12,000 of total in
restricted stock
-----------------------------------------------------------------------------------------------------------------
Martial Levasseur President/CEO 2002 36,000 0 800,000 Common $36,000 paid in
restricted stock.
-----------------------------------------------------------------------------------------------------------------
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Above options totaling 2,500,000 are unexercised as of August 19, 2004.
--------------------------------------------------------------------------------------------------------------
Option Grants in Last Fiscal Year June 30, 2004
--------------------------------------------------------------------------------------------------------------
Individual Grants
--------------------------------------------------------------------------------------------------------------
Name Number of
Common Shares
Underlying
Options % of Total Options Granted in Exercise Price Expiration
Granted (#) Fiscal Year ended June 30, 2004 ($/Sh) Date
--------------------------------------------------------------------------------------------------------------
Martial Levasseur President/CEO, 1,000,000 11.8% $0.16 per Share 06/10/09
Director
--------------------------------------------------------------------------------------------------------------
Robert Dinning, 1,000,000 11.8% $0.16 per Share 06/10/09
CFO, Director
--------------------------------------------------------------------------------------------------------------
Robert Lee, 500,000 5.9% $0.16 per Share 06/10/09
Secretary, Director
--------------------------------------------------------------------------------------------------------------
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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option/Values The following table sets forth the number and value of the unexercised options held by each of the Named Executive Officers and Directors at June 30, 2003 and as of June 30, 2004.
---------------------------------------------------------------------------------------------------------------------
Aggregate Option Exercises in Last Fiscal Year and Option Values
---------------------------------------------------------------------------------------------------------------------
Value Number of Securities Underlying
Shares Realized Unexercised Options at FY-End Value of Unexercised In-the Money
Acquired on at FY-End June 30, 2004 (#) Options at June 30, 2004 (1)
Name Exercise (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
---------------------------------------------------------------------------------------------------------------------
Martial Levasseur 0 0 2,500,000 Shares/ $15,000
Pres./CEO, Dir. Exercisable
---------------------------------------------------------------------------------------------------------------------
Robert Dinning, 0 0 2400,000 Shares/ $15,000
CFO, Director Exercisable
---------------------------------------------------------------------------------------------------------------------
Robert Lee, 0 0 1,910,000 Shares/ $25,000
Secretary, Dir. Exercisable
---------------------------------------------------------------------------------------------------------------------
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(1) Option value based on the difference between the exercise price of unexercised options and the closing sale price of $0.14 per share on August 19, 2004.
Compensation of Directors
Standard Arrangements: The members of the Company's Board of Directors are reimbursed for actual expenses incurred in attending Board meetings.
Other Arrangements: There are no other arrangements.
Employment Contracts and Termination of Employment, And Change-in-control Arrangements
The Company's officer and directors do not have employment agreements.
Termination of Employment and Change of Control Arrangement
There is no compensatory plan or arrangement in excess of $100,000 with respect to any individual named above which results or will result from the resignation, retirement or any other termination of employment with the Company, or from a change in the control of the Company.
Item 11. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners holding five percent or greater of the 52,119,589 shares of common stock outstanding as of August 12, 2004 and of Management assuming the exercise of outstanding options held by management.
Title of Name and Address(1) Position Amount and Nature % of
Class Beneficial Owner of Beneficial Owner Class
-------- ------------------- ---------- ------------------- -------
Common Martial Levasseur Director, CEO 9,717,892 (2) 17.79%
Robert Lee Director 3,795,602 (3) 7.02%
Robert Dinning Director, CFO 3,703,333 (4) 6.79%
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All officers and Directors
as a Group (3 persons) 17,216,827 31.60%
(1) The Address of the executive officers and directors is that of the Company:
Suite 1458 - 409 Granville Street, Vancouver, B.C. Canada V6C1T2
(2) Includes 2,753,333 directly in name of Martial Levasseur and 4,464,559 in name Of Van Silver Holdings Inc., a holding company controlled by Martial Levasseur. In addition, Mr. Levasseur holds a stock option for 800,000 common shares, exercisable at $0.14 per share until July 1, 2005, and a stock option for 700,000 common shares, exercisable at $0.09 per share until June 30, 2007 and a stock option for 1,000,000 common shares, exercisable at $0.16 per share until June 10, 2009.
(3) Includes a stock option of 710,000 common shares, exercisable at $0.14 per share until July 1, 2005 and a stock option for 700,000 common shares, exercisable at $0.09 per share until June 30, 2007 and a stock option for 500,000 common shares exercisable at $0.16 per share until June 10, 2009.
(4) Includes a stock option of 700,000 common shares, exercisable at $0.14 per share until July 1, 2005 and a stock option for 700,000 common shares, exercisable at $0.09 per share until June 30, 2007 and a stock option for 1,000,000 common shares exercisable at $0.16 per share until June 10, 2009.
Item 12. Certain Relationships and Related Transactions:
In June 2004, Martial Levasseur, the Company's President and a Director and Robert Dinning, the Company's Chief Financial Officer and a Director each acquired 500,000 shares of restricted common stock from the Company at $0.30 per share for total proceeds to the Company of $300,000.
Item 13. Exhibits and Reports on Form 8-K
A. Exhibits
3.1 Articles of Incorporation (Incorporated by reference from Form 10SB
Registration SEC File # : 000-27791 filed October 25, 1999)
3.2 By-Laws of Corporation (Incorporated by reference from Form 10SB
Registration SEC File # : 000-27791 filed October 25, 1999)
10.1 NUP ACQUISITION AGREEMENT (Incorporated by reference from Annual
Report on Form 10KSB filed on September 30, 2002
10.2 KBU ACQUISITION AGREEMENT
10.3 Addendum to KBU ACQUISITION AGRREEMENT
14 Code of Ethics
31.1 Sarbanes Oxley Section 302 Certification
31.2 Sarbanes Oxley Section 302 Certification
32.1 Sarbanes Oxley Section 906 Certification
32.2 Sarbanes Oxley Section 906 Certification
B. Reports on Form 8-K: None
Item 14. Principal Accountant Fees And Services
Williams & Webster PS, Certified Public Accountants, are the Company's independent auditors to examine the financial statements of the Company for the fiscal year ending June 30, 2004. Williams & Webster PS has performed the following services and has been paid the following fees for these fiscal years.
Audit Fees
Williams & Webster PS was paid aggregate fees of approximately $20,000 for the fiscal year ended June 30, 2004 for professional services rendered for the audit of the Company's annual financial statements and for the reviews of the financial statements included in Company's quarterly reports on Form 10QSB during these fiscal years.
Audit -Related Fees
Williams & Webster PS was not paid any additional fees for the fiscal year ended June 30, 2004 for assurance and related services reasonably related to the performance of the audit or review of the Company's financial statements.
Tax Fees
Williams & Webster PS was not paid any aggregate fees for the fiscal year ended June 30, 2004 for professional services rendered for tax compliance, tax advice and tax planning. This service was not provided.
Other Fees
Williams & Webster PS was paid no other fees for professional services during the fiscal year ended June 30, 2004
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: August 26, 2004
/s/ Martial Levasseur
--------------------------------------
Martial Levasseur, President/CEO
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In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Martial Levasseur
------------------------
Martial Levasseur President, Director August 26, 2004
/s/ Robert G. Dinning
------------------------
Robert G. Dinning Chief Financial Officer,
Secretary, Director August 26, 2004
/s/ Robert E. Lee
------------------------
Robert E. Lee Director August 26, 2004
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EXHIBIT 10.2
JOINT COOPERATION "AGREEMENT"
Number : /APL.MAS.02/11.2003
KNOW ALL MEN BY THIS PRESENT :
This Joint Cooperation Agreement (Agreement) is made and entered by and between the undersigned signatories:
APOLO GOLD INC., a Cooperation duly incorporated under the Laws of Nevada in the United State of America, and located at :
1458-409 Grenville Street
Vancouver B.C., V6C 1T2
C a n a d a
HEREINAFTER referred to as the "FIRST PARTY" (APOLO)
AND
PT METRO ASTATAMA, a limited liability corporation, incorporated under the Laws of Republic of Indonesia, located at:
Jln. PAM Baru Raya No. 10 Kompl. PAM, Bendungan Hilir Jakarta - 10210 - Indonesia
HEREINAFTER referred to as the "SECOND PARTY" (METRO)
WITNESSETH :
The Parties purposefully entered into and execute this Agreement with the sole purpose of the Parties being to work together in a Joint Operation basis to pursue and effect the Gold Mine covering 28 hectares and 905,3 hectares, (hereinafter referred to as the ("Property") at the Region of Babakan Loa, District of Kedondong, South Lampung, Province of Lampung, Southern Sumatera, Indonesia. Owned by PT Karya Bukit Utama.
NOW THEREFORE :
In consideration of mutual promises, convenants and undertakings set forth herein and for the good and valuable consideration, the Parties declare and agree as stated in the Articles hereto.
1.01 Whereas, APOLO represent and warrants that:
a. APOLO has full corporate power and authority to enter into this Agreement and entering of this Agreement does not conflict with any applicable Laws or with the by Laws of APOLO, or with any contract or other commitment to which APOLO is a Party to.
b. The execution of this Agreement and the performance of its Terms and Conditions have been duly authorized by all necessary action including the Resolution of the Board of Directors of APOLO approving the transaction.
1.02 Whereas, METRO represent and warrants that :
a. Metro has exclusively signed a MEMORANDUM of UNDERSTANDING (Kesepakatan) Number MAS.KBU/01-04/1996 with PT.KARYA BUKIT UTAMA (KBU) for its Property KP Exploitation number KP 96PP0082 and KP Exploitation number KP 96PP0083 at the above said location. Metro acknowledges that it has the sole and exclusive authority to act on behalf of PT. Karya Bukit Utama (KBU) regarding this Agreement with Apolo.
b. METRO has full corporate power and authority to enter into this Agreement and entering of this Agreement does not conflict with any applicable Laws or with the by Laws of METRO, or with any contract or other commitment to which METRO is Party to.
c. The execution of this Agreement and the performance of its Terms and Conditions have been duly authorized by all necessary corporate action including the Resolution of the Board of Directors of METRO.
1. Under this particular Article the Parties shall define clearly and explicitly the commitment and obligation of the Parties/signatories herein
2. METRO hereby assign to APOLO the exclusive right through this Agreement, to explore, test, develop and mine the "Property" and to extract, remove and sell the Minerals and mineral products therein and realize the profit thereof. APOLO and its nominee shall be the exclusive manager of the "Property" and its development into a productive mine.
3. APOLO shall report in writing on a quarterly basis, all their activities and progress to METRO, in order for METRO to make regular quarterly reports to the appropriate Government Institution. Said quarterly report shall coincide with public reporting requirements of APOLO which reports for the periods ending March 31, June 30, September 30 and December 31.
Both Parties agree that with the consent of either Party, which consent shall not be unreasonable withheld, each Party shall have the right to assign all or any parts of its interest in this Agreement and in the Property, subject to the Terms and Conditions of this Agreement. It shall be a condition precedent to any such assignment that the assignee of interest being transferred agrees to be bound by the Terms and Conditions of this Agreement, insofar as they are applicable.
Consideration and Allocation re Operation
1. Upon execution of this Agreement, APOLO shall, within 45 days, arrange for the issuance of 3.000.000 common shares of APOLO subject to sale under rule 144, to :
PT METRO ASTATAMA
Jl PAM Baru Raya No. 10
Kompleks PAM, Bendungan Hilir
Jakarta - 10210 (Pusat), Indonesia
as describe below:
a. 1.000.000 share issued January 15 2004
b. 1.000.000 share issued June 15 2004
c. 1.000.000 share issued January 15 2005
Should Apolo for any reason as stated in Article 5, item 6, decided to abandon the property, any stock not already issued shall be cancelled provided Apolo's notice to abandon the property is issued prior to the due date for issuance of the shares.
2. The Parties has mutually agreed that the Project shall be managed by APOLO or its nominee and that the Net Profits will be allocated eighty (80) percent to APOLO and twenty (20) percent to METRO. Distribution of Net Profits shall be based on a Net Profit Basis which is defined as the deduction of all cost, expenses of operation, management fees, Government license fees and taxes, camp expenses, travel and depreciation on Equipment based on the projected live of the mine or the Equipment. The equipment for mining shall be depreciated by recommended depreciation levels by the auditors of Apolo.
3. Should the Parties disagree on the figure of the depreciation, the auditors of APOLO shall recommend an opinion on acceptable method of depreciating the equipment. The remaining profit after all applicable expenses shall be paid out eighty (80) percent to APOLO and twenty (20) percent to METRO. If payments are less than the Net Profit shown after expenses, said pay out shall also be 80% to APOLO and 20% to METRO basis unless the Parties mutually agree to another arrangements.
1. The Parties hereto hereby convenant and agree that they will execute such further agreements, conveyances and assurances as may required, or which council for the Parties may deem necessary to effect or carry out the intent of the Agreement.
2. This Agreement shall constitute the entire Agreement between the Parties with respect to the Property. No representation or inducement has been made except as set forth herein. No changes, alteration, or modification of this Agreement shall be binding upon either Party until and unless a Memorandum in writing to such effect shall have been signed by all Parties hereto. This Agreement suspends all previous written, oral or implied understanding between the Parties with respect to the matter covered herein.
3. Time shall be of the essence of this Agreement
4. The Title to the Article of this Agreement shall not be deemed to form part of this Agreement but shall be regarded as having been used for convenience and references only.
5. Each provision of this Agreement shall be interpreted in such manner to be effective and valid under applicable Law of Indonesia, but if any provision shall be effective only to the extent of such prohibition or invalidity, without invalidating the reminder of such provisions of this Agreement.
6. APOLO hereby convenant and agrees that:
a. if it should elect to discontinue its operation on the Property, it shall return to METRO the Property interest acquired by APOLO therein under this Agreement and shall execute any and all documents/ Agreements, that are required by METRO to effect the return of the Property rights to METRO. All Equipment on the Property owned by APOLO shall be sold to METRO based on current value. If the Equipment is owned by APOLO and the Parties do not agree to a value, APOLO has the right to remove the Equipment and sell it elsewhere.
b. It shall conduct sufficient work on the Property to maintain the Property in good standing at all times hereinafter until the year following any declared discontinuance, as referred to in 6.a.
7. This Agreement shall be governs by and interpreted in accordance with International Laws and in the Independent Country.
1. As agreed by the Parties herein the Agreement to acquire the "Property" amounting US$ 2,500,000.oo (US Dollar two million five hundred thousand) with the payment schedule below, and or a six percent (6%) gross production royalty until the amount of US$ 2,500,000.oo paid. The 6% royalty commences when the mill is fully operational (24 hour production):
December 03 2003 USD 50,000.oo
January 15 2004 USD 25,000.oo
March 30 2004 USD 25,000.oo
June 30 2004 USD 150,000.oo
December 15 2004 USD 250,000.oo
June 30 2005 USD 250,000.oo
December 15 2005 USD 250,000.oo
June 30 2006 USD 250,000.oo
December 15 2006 USD 250,000.oo
June 30 2007 USD 500,000.oo
December 15 2007 USD 500,000.oo
-------------------
Total USD 2,500,000.oo
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The parties acknowledge that the sum of $25,000 has already been paid and that a balance of $25,000 is payable on execution of the Agreement. Payment of the 6% gross production royalty shall be made every quarterly within 30 days of the filing og the filing of financial statement with the SEC as part of the form 10QSB which is filed each quarter as specified in article 2 item 3.
2. Total Payment US$ 2,500,000.oo
3. In the event amounts payable are not made when they are due, APOLO shall have a thirty (30) day period from the date the payment was due to complete the payment.
1. APOLO shall calculate on a quarterly basis, the Net Profit Derive from the operations on the Property. The quarterly basis of the reporting shall be coincide the quarterly reporting requirements of APOLO with The Securities and Exchange Commission (SEC). These quarterly requirement are March 31, June 30 , September 30and December 31. Should the Mine start on any other basis, the first quarter will be adjusted to abide with the dates mentioned above. All quarterly reports are due for filing 45 days after the due date for quarterly reports and 90 days after the year end date of June 30.
2. APOLO shall no later than 45 days after completion of quarter, determine the Net Profit available to METRO and in turn pay to METRO required amount as defined under Article 4 of this Agreement.
3. Deliver a properly prepaid Financial statement on Operation at the Mine site, which shall include gross receipt from mineral sales during the reporting quarter, less Government royalties, expenses that have been deducted, and the resulting Net Profit before taxes. This Statement will outline the amount due to METRO.
4. Provided however that, until such time as there are Net Profit available, APOLO should deliver to METRO within 45 days of the end of a reporting quarter, a detailed Financial Statement of all operations. This statement even when no mineral recovery has occurred to date. Once the required Equipment is in place and Production has commenced, the requirements for reporting are in effect.
5. Both Parties agree that each Party will execute and deliver such documents as may be necessary to permit both APOLO and METRO to record its Share rights against the Property.
Notwithstanding Article 3, in the event METRO wishes to sell all or part of its interest in this Agreement or the Property itself, it shall first give notice to APOLO in writing containing an offer to sell or part of its interest, and the Terms of sale that it would be accept. The offer can be in Cash or other consideration.
APOLO shall have 30 days from the date of receipt of notice from METRO to sell or part, to reply in writing to METRO, its intentions re-the METRO offer. METRO shall then be bound by this proposal they have made to APOLO. The Parties then have a further 30 days to complete the accepted proposal that METRO has made and APOLO has accepted. If APOLO fail to notify METRO before the expiration of the time therein, then METRO may sell and transfer such interest offered to any third Party or Parties, provided it is on the same terms that APOLO either decline or fail to exercise on.
Any notice, election, consent or other writing required or permitted to be given hereunder shall be deemed to be sufficient given or postage prepaid or if given by telegram, telex or faxes addressed as followed:
For APOLO: APOLO GOLD INC.
1458-409 Grenville Street
Vancouver B.C., V6C 1T2
C a n a d a
Telephone : 011-604-687-4150
Fax : 011-604-687-4155
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For METRO: PT. METRO ASTATAMA
Jln. PAM Baru Raya No. 10
Kompl. PAM, Bendungan Hilir
Jakarta - 10210 - Indonesia
Telephone : 001-62-573-5379
001-62-811 130 282
Fax : 001-62-573-5379
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Each Party acknowledges that the other Party has other interest and business, and that this Agreement is a non exclusive Agreement, and only relates to the property described herein and/or hereafter, or otherwise agreed to by the Parties in writing.
In addition to the Definitions contained in this Agreement, in this Article:
"Cost means all items of outlay and expenses whatsoever, both direct and indirect, with respect to the Property or any mine recorded by the purchaser in accordance with generally accepted accounting principals and without limiting generally, more particularly:
A. "Capital Costs" means:
a. All costs preparing and equipping the mine for commercial production which are recorded prior to the completion date, including without limiting generally, all amount invested in development headings, Heavy Equipment, Gold processors, housing, infrastructures, road constructions, Drainage, Airport, and other facilities whatsoever.
b. All cost of maintaining efficient production of Gold which are recorded after completion date, including without limiting generally, exploration, exploitation, development and acquisition of fixed assets, and
c. For purposes only of calculation of Net Profits all items of outlay and expenses obtained financial information and providing security as recorded by APOLO
B. "Exploration costs" means all cost recorded during the exploration period, including without limiting generally, such reasonable charges for administrative services as may charged by APOLO.
C. "Exploitation costs" means all cost relating to Production of minerals.
D. "Mine costs" means all costs which do not fall into other class of costs enumerated herein including, without limiting generally:
a. Payroll costs, including applicable fringe benefits, burden and other direct payroll costs
b. All other costs incidental to mining operation and Government administrations
c. All costs from any slowdown, suspensions or termination of mining operation at the mine, whether voluntary or involuntary, and howsoever arising
d. All prepared expenses and costs of supplies and repair parts and consumables for the operation of the Equipment and Plant
e. All taxes, other than income taxes, royalties or other charges of imposts provided for pursuant to any Law or legal obligation imposed by any Government
f. All incidental costs rehabilitation of the mine, reclamation and environmental protection, and
g. Such reasonable portion of its head office overhead costs including management overhead as may be charged by APOLO in the normal course of business.
Both Parties, APOLO and METRO shall treat all data, reports, and other information of any nature whatsoever relating to this Agreement and the Property as confidential. The only exception to this would be matters that APOLO is obliged to disclosure to the Public, to the securities and exchange commission in its regular reporting requirements regarding Property matters. From the date hereof, the Parties shall not, without the express written consent of the other Party, disclosure to any third party any information concerning the Property or any operation thereon. The Parties shall not buy, sell, or other wise disclosure any information relating to the Property , unless such information is required to be disclosed because of the applicable Law in Indonesia or in the U.S.A in that event, the required information will be provided to the other Party first before any disclosure is undertaken.
Both APOLO and METRO agree to produce an Addendum following this Agreement, to cover any addition or modification as determined by the Parties. This Addendum shall then become a legal and inseparable part of this Agreement and in binding part of this Agreement.
Essentially the spirit behind this Agreement is one of mutual trust and confidence and the reliance on each of the signatories to do what is fair and it shall be expected that each of the named signatories of private and financial nature to the utmost of each parties ability.
This Agreement shall benefit and be binding upon the Parties and their signatories hereto and their respective heirs, successors and assigns.
This Agreement shall be executed in two (2) original copies only and having some Power of Law. One copy is provided to "APOLO" and one copy is provide to "METRO".
"The First Party" "The Second Party" Apolo Gold Inc. PT Metro Astatama CORPORATE SEAL CORPORATE SEAL /S/MARTIAL H. LEVASSEUR /S/ M. YUSUF SABARIO ----------------------- -------------------- Martial H Levasseur M. Yusuf Sabario |
/S/ ROBERT DINNING /S/ MUHAMMAD ARIEF
------------------ ------------------
Robert Dinning Muhammad Arief
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EXHIBIT 10.3
MINUTES OF MEETING
In conjunction with the Joint Cooperation Agreement of APLLMas.02/11.2003 dated 17th November, 2003.
In this 14th day of July, 2004, the following personnel held meeting in Bandar Lampung, Sumatera, Indonesia, attended by the following Officers:
1. Martial H. Levasseur, president, Apolo Gold Inc.
2. Ir H. Muhammad Nur, Director and CEO. PT Karya Bukit Utama
3. Robert Dinning. CFO. Apolo Gol Inc. (By Telephone)
Resolved,
The Parties, Apolo Gold Inc (Martial Levassaur) and KBU (Ir. H. Muhammad Nur) met in Bandar Lampung to discuss and agree to a revised payment schedule for the payment due June 30, 2004 ($135,000) and the payment due December 15, 2004 ($260>000US). Mr. Dinning was available by Telephone, having sent by e-mail, a recommendation for revision of the payment schedule. It was mutually agreed that $15,000 US had already been paid to KBU
The following repayment schedule was proposed to replace the existing payment schedule for June 30.2004 and December 15,2004:
July 15.2004 60,000
August 15. 2004 50,000
September 15, 2004 50,000
October 15,2004 25,000
November 15,2004 25,000
December 15.2004 75,000
January 15, 2005 50,000
February 15,2005 $ 50,000
$ 385.000
-----------
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The Parties mutually agree that as of the date of this Agreement, $15,000 US had already been paid to KBU.
3. APOL0 advises that the payment due July 15, 2004 will be wire transferred by the bank of Apolo Gold tnc on July 14, 2004 to the account of Ir Muhammad Nur as per wire instructions.
4. This "Minutes of Meeting' dated July 14, 2004 shall become a legal and inseparable part of the Joint Cooperation Agreement ..APLL. MAS. 02/11,2003 dated 17"* November 2003,
Essentially the spirit behind this "Minutes of Meeting1* dated July 14, 2004 is one of mutual trust and confidence and the reliance on each of the signatories to do what is fair and it shall be expected that each of the named signatories of private and financial nature to the utmost of each parties ability,
The Meeting has been closed at 16:00 hours Thursday, July 14, 2004. and
this "Minutes of Meeting" dated July 14, 2004 has been executed in three
(3) original copies only, and one original copy to each Party.
Made and Signed in Bandar Lampung, Sumatera, Indonesia, on the 23 day of July 2004.
THE PARTIES
/s/ MARTIAL H. LEVASSEUR /s/ IR H. MUHAMMAD NUR, MSC ----------------------- -------------------------- Martial H. Levasseur Ir H. Muhammad Nur, Msc President, Director and CEO APOLO GOLD INC PT KATYA BUKIT UTAMA /S/ROBERT G. DINNING -------------------- Robert G. Dinning CFO Apolo Gold Inc. |
EXHIBIT 14
APOLO GOLD INC.
CODE OF ETHICS
Principles Governing Professional and Ethical Conduct
It is the policy of APOLO GOLD Inc. (the "Company") that the Company's Board of Directors, Chief Executive Officer, Chief Financial Officer, principal accounting officer and controller (or persons performing similar functions) and all employees adhere to, advocate and promote the following principles:
o Loyalty to the interests of our shareholders, customers, suppliers,
fellow employees, strategic partners and other business associates;
o Honest and ethical conduct in any action, practice or course of
conduct within the Company or with its business partners;
o Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o Full, fair, accurate, timely and understandable disclosure in reports
and documents that the Company files with, or submits to, the
Securities and Exchange Commission (the "SEC") and other public
communications made by the Company; and
o Compliance with laws, rules and regulations applicable to the Company.
Conflicts of interest
o Insiders (directors, officers and employees of the Company) shall
maintain a high degree of integrity in the conduct of the Company's
business and maintain independent judgment. Each insider must avoid
any activity or personal interest that creates, or reasonably appears
to create, a conflict between his/her interests and the interests of
the Company. A conflict of interest arises any time such a person has
a duty or interest that may conflict with the proper and impartial
fulfillment of such person's duties, responsibilities or obligations
to the Company, such as:
o Making an investment that may affect his/her business decisions;
o Owning a meaningful financial interest in, or being employed by,
an organization that competes with or whose interests could
reasonably be expected to conflict with those of the Company;
o Owning a meaningful interest in, or being employed by, an
organization that does, or seeks to do, business with the Company
o Making a decision on a matter where such person's self-interests
may reasonably call into question the appropriateness of the
decision;
o Being employed by or accepting compensation from any other person
as a result of business activity or prospective business activity
affecting the Company;
o No insider shall direct, or seek to direct, any Company business to
any business enterprise in which the insider or his or her family
member has a meaningful ownership position or serves in a leadership
capacity
o No insider shall seek or accept for his or her self or for any family
member any favors, preferential treatment, special benefits, gifts,
loans or other consideration as a result of such insider's association
with a business associate or with the company, except those customary
and usual benefits directly provided by a business associate of the
company. The foregoing, however, does not prohibit receipt of gifts
from business associates that are of nominal value consistent with
accepted business practices.
Corporate Opportunities and Transactions with Business Associates
Insiders and their family members must not profit, directly or indirectly, due to their position in the Company to the detriment, or at the expense, of the Company or any of its business associates. No insider shall take for his or her own advantage any business opportunity for profit, which he or she learns about as a result of his or her position with the Company.
Confidentiality
o No insider or family member shall discuss with, or inform others
about, any actual or contemplated business transaction by the Company
or any business associate except as required in the performance of the
Insider's employment duties and then only for the benefit of the
Company of the Business Associate, as appropriate, and in no event for
personal gain or for the benefit of any other third party.
o No insider or family member shall give any information to any third
party about any pending or proposed business transaction of the
Company or its business Associates unless expressly authorized to do
so by the Company's Chief Executive Officer.
o No insider or family member other than the Company's Chief Executive
Officer, Chief Financial Officer or Chairman of the Board may discuss
the Company or its business associates with any member of the press or
media except with the prior authorization of the compliance officer.
Document Retention
The company will comply fully with all laws and regulations relating to the retention and preservation of records. All insiders shall comply fully with the Company's policies regarding the retention and preservation of records. Under no circumstances may Company records be destroyed selectively or maintained outside Company premises or designated storage facilities.
If the existence of a subpoena or impending government investigation becomes known to an insider, he or she must immediately contact the chief executive officer and the chair of the audit committee. Insiders must retain all records and documents that may be responsive to a subpoena or pertain to an investigation.
Reporting and Treatment of Violations
Persons who become aware of suspected violations of this Code should report such suspected violations promptly to the Chairman of the Company's Board of Directors. To assist in the response to or investigation of the alleged violation, the report should contain as much specific information as possible to allow for proper assessment of the nature, extent and urgency of the alleged violation. Without limiting the foregoing, the report should, to the extent possible, contain the following information:
o the alleged event, matter or issue that is the subject of the alleged
violation;
o the name of each person involved;
o if the alleged violation involves a specific event or events, the
approximate date and location of each event; and
o any additional information, documentation or other evidence available
relating to the alleged violation.
The Board of Directors shall have the power to monitor, investigate, make determinations and recommend action to the Board of Directors with respect to violations of this Code. In determining whether a violation of this Code has occurred, the Board of Directors may take into account:
o the nature and severity of the violation;
o whether the violation was a single occurrence or involved repeated
occurrences;
o whether the violation appears to have been intentional or inadvertent;
o whether the person in question had been advised prior to the violation
as to the proper course of action;
o whether the person in question had committed other violations in the
past; and
o such other facts and circumstances as the Audit Committee shall deem
advisable in the context of the alleged violation.
Consequences of Violations
If a violation is substantiated, the Board of Directors may impose such sanctions or take such actions as it deems appropriate, including, but not limited to, the following:
o Disciplinary action (including censure, re-assignment, demotion,
suspension or termination);
o Pursuit of any and all remedies available to the Company for any
damages or harm resulting from a violation, including injunctive
relief; and
o Referral of matters to appropriate legal or regulatory authorities for
investigation and prosecution.
Requests for Waivers and Changes in Code
A waiver of a provision of this Code shall be requested whenever there is reasonable likelihood that a contemplated action will violate the Code. Any waiver (including an implicit waiver) that constitutes a material departure from a provision of this Code shall be publicly disclosed on a timely basis, to the extent required by applicable rules and regulations of the SEC. In addition, any amendments to this Code (other than technical, administrative or other non-substantive amendments) shall be publicly disclosed on a timely basis, to the extent required by applicable rules and regulations of the SEC. Every director and employee is required to sign this policy. I have received, read and understand this policy -
Signed_______________________, Date______________________
Name________________________ Employee [ ] Director [ ]
Exhibit 31.1
CERTIFICATION
I, Martial Levasseur, certify that:
1. I have reviewed this annual report on Form 10-KSB of Apolo Gold Inc.
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 small business issuer as of, and for, the periods presented in this report;
4. The small business issuer'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) for the small business issuer 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 small business issuer, 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) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an quarterly report) that has materially affected or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting.
Date: August 23, 2004 /s/ Martial Levasseur ----------------------- Martial Levasseur President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION
I, Robert Dinning, certify that:
1. I have reviewed this annual report on Form 10-KSB of Apolo Gold Inc.
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 small business issuer as of, and for, the periods presented in this report;
4. The small business issuer'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) for the small business issuer 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 small business issuer, 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) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an quarterly report) that has materially affected or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuers auditors and the audit committee of small business issuer'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 small business issuer'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 small business issuer's internal control over financial reporting.
Date: August 23, 2004 /s/ Robert Dinning ------------------ Robert Dinning Chief Financial Officer |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Executive Officer
In connection with the Annual Report of Apolo Gold Inc. (the "Company") on Form 10-KSB for the fiscal year ending June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Martial Levasseur, Chief Executive Officer certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(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 respects, the financial condition and results of operations of the Company.
August 23, 2004 /s/ Martial Levasseur
------------------- -----------------------------------
Martial Levasseur
Chief Executive Officer
|
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Certification of Chief Financial Officer
In connection with the Annual Report of Apolo Gold Inc., (the "Company") on Form 10-QSB for the fiscal year ended June 30, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Robert Dinning, Chief Financial Officer certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:
(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 respects, the financial condition and results of operations of the Company.
August 23, 2004 /s/ Robert Dinning
------------------ -----------------------------------
Robert Dinning
Chief Financial Officer
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