U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business
issuers Under Section 12(b) or (g) of the Securities
Exchange Act of 1934
Apolo Gold, Inc.
(Name of Small Business Issuer in its charter)
Nevada
(State or other jurisdiction of incorporation or organization)
Applied For
(I.R.S. Employer Identification No.)
Principal Executive Offices
1458 - 409 Granville Street
Vancouver, BC V6C 1T2
(Issuer's Telephone No.)
(604) 687-4150
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act: Common Stock
(Title of Stock)
Total number of pages: 65
Index to Exhibits Appears on Page: 29
<PAGE>
Item 1
(a) Business Development
------------------------
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 the gold
and diamond mining concession in Venezuela which is the subject of an
acquisition agreement through the Company's subsidiary, Compania Minera
Apologold, C.A., a Venezuela corporation (the Venezuela Subsidiary). The
Venezuela Subsidiary is ninety-nine percent owned by Martial Levasseur, the
Company's President as trustee for the benefit of the Company.
On May 18, 1999, the Venezuela Subsidiary entered into an agreement with
Empresa Proyectos Mineros Goldma, C.A., to acquire the alluvial diamond and gold
mining concession named Codsa 13, located in the Gran Sabana Autonomous
Municipality, State of Bolivar, Venezuela. The purchase price for the concession
is $3,500,000 (2,086,000,000 Bolivars). A down payment of $50,000 (29,800,000
Bolivars) was made on or about May 30, 1999. A second payment of $50,000
(29,800,000 Bolivars) is to be made on or before November 15, 1999. The
Venezuela Subsidiary agreed to establish at least one mining operation on the
concession with a minimum production of 1,000 cubic meters per day, within one
year of execution of the agreement and its authentication by the Venezuela
government. The agreement was first filed or authenticated with the Venezuela
government on May 18, 1999.
Once production has commenced, the Venezuela Subsidiary agreed to monthly
payments in an amount equal twenty percent of the gross production from the
mining operation. Fifty percent of the monthly payment (10% of the gross
production) is to be credited as payment on the purchase price and fifty percent
is to be applied as rental payment on mining equipment and technical assistance.
The Venezuela Subsidiary agreed that within one year from the date of
authentication of the purchase agreement with the Venezuelan authorities, the
amount of the monthly payment is to be at least $10,000 even if production is
insufficient to pay the minimum amount. All payments to the Seller may be paid
in US dollars, gold and diamonds as priced in Venezuela and shares in the
Company, as selected by the Seller in any combination thereof. The agreement
further requires the payment of a royalty to the Seller in the amount of 2.5% of
the annual net profits of the concession. This royalty is payable as long as
there is production on the property. There is also a royalty payable to the
government of Venezuela of 4% of gross production. The agreement also requires
that an existing mining operation by the Seller may continue and that until the
entire purchase price has been paid, the Seller may continue to conduct
exploration and testing.
On May 20, 1999, the Company entered into an assignment agreement with its
Venezuela Subsidiary, which assigned the rights and obligations under the
Concession Agreement to the Company. In addition to the obligations under the
Concession Agreement, the Company paid 3,550,000 shares of common stock to AML
Diamond and Gold Exp., Inc. and its principal. The Company also agreed to pay
AML Diamond and Gold Exp., Inc. a royalty in the amount of 7.5% of net
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production profits. AML Diamond and Gold Exp is owned by Albert Aleong, a
Venezuelan citizen, who works at the property site. He is not related to any
officers or directors of the company.
(b) Narrative Description of Business
-------------------------------------
Location and Title
The Company's Codsa 13 mining concession is located in the Gran Sabana
Autonomous Municipality, State of Bolivar, in the extreme south east of
Venezuela. It is approximately twenty five kilometers north of the Santa Elena,
a village of approximately 15,000 people with sufficient facilities and supplies
to support the mining operation. Santa Elena has daily flights to Caracas. The
mining operation is accessible by gravel road from Santa Elena.
Title to the Codsa 13 mining concession is held by Empresa Proyectos
Mineros Goldma, C.A. since 1992 and is the above described Seller to the
Company's Venezuela Subsidiary.
Regional Geology
The existing data place the CODSA 13 concession as part of the Magnamatica
de Roraima Province, of PROTEROZOICO, between 1,800 and 1,650 million years.
This Magnamatica Province is formed by a series of formations, described in the
"Proyecto de Inventario de Recursos Naturales de la Region de Guayana de C.V.G.
Tecnica Nineria C.A." These formations are as follows:
Uairen Formations, Inferior And Superior Part
Formed mainly by quartz sandstone and conglomerate of fine and coarse side,
sandstone feldespatic, limonite, breccia lens and sandstone of white and pink
colors, lens of lutita vitreous.
Uaimapue Formations: Lower, Middle And Upper Part
Formed mainly by quartz sandstone of fine and medium grain with crossed
stratification, "flat and leveled" parallel, pinkish and violet colors, vitreous
tufts, volcanoclastic sandstones red in color, with pyrite crystals, fine
grained quartz like sandstones, vitreous tufts and green chert. The area is
considered as a diamond bearing and placer gold field, however there is no
concluding criteria on the primary deposits of the same.
Description Of The Codsa 13 Deposit
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The gold and diamond deposit currently being exploited on the CODSA 13
concession, consist of a series of massive stratum of fine and thick grained
quartz sands with white quartz edges and gravel with unconsolidated sand quartz
matrix. This sequence graduates toward the ceiling to levels of very fine grain
similar to volcanic ash, white in color and at a level of black in color, of
quartz grains that make up a good level of stratigraphic reference. In the
current pits, the base of the clastic section can not be observed, below the
levels of gravel and a lens of breccia cemented with hematite limonite exist.
The lowest level observed consists of very homogeneous fine grained sands, with
isolated quartz edges. The sequence of sands with evidence of gold contents,
outcropping in the pits show an average thickness of 9 meters, although its true
thickness and morphology is unknown. The soil that is mainly a sandy area, with
little organic contents, is not more than 0.50 meters. The deposit forms a flat
area with a slight inclination that reaches a subsurface level at barely 1 meter
deep. This will allow the Company to maintain the extraction pit full of water
which will be adequate for the planned extraction process.
Evacuation Of The Potential
In the CODSA 13 concession, the potential zone for the contents of alluvium
with gold and diamonds has not been yet properly defined, although there is
enough evidence to consider that the undulated flat morphology, which forms a
filling at the level of the river, could contain the main potential. In
addition, there is evidence that the area has been affected by hydrothermal
processes of mineralization, which increased the possibilities of
mineralization.
Extent of the Deposit
It is estimated that the alluvium zone is located at the undulated flat
areas, with an approximate elevation of 10 meters above Rio Cuquenan level. The
current works in the two pits, as well as some previous informal works and
explorations carried out by the current operators, indicate that the deposits
are extended in this area and that the same contain gold and diamond. The works
carried out at the higher topographical levels, have not given good results,
however the same have not been carried out with adequate control of the possible
levels of greater interest. The area covered by this undulated flat area, which
is considered as the best potential covers nearly 3 square km. This represents a
9,000,000 square meter area. If a minimum thickness of 5 meters is taken into
consideration for the sequence alluvium, the existing potential is of 45,000,000
cubic meters, which represent close to 112,500,000 tons of alluvial ore.
Past and Planned Operation
The Company will be taking over the existing placer mining operation on the
concession which is processing approximately 250 cubic yards of alluvial ore per
day using inefficient mining technology such as sluice boxes where hand
4
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excavated gravel is washed over a ridged board to wash away lighter sediments
and allowing gold to collect in the "riffles". The Geological Evaluation
commissioned by the Company from Geological & Mining Exploration Services, S.A.,
of Las Cumbres, Panama, tested to tailings of the current operation and
concluded that the present operation does not recover more than forty percent
(40%) of existing gold and diamonds. No records of the volume of gravel
processed or gold and diamonds produced were maintained.
The Company is importing mining equipment including a floating dredge and a
"Super Bowl" gold ore processing machine which are anticipated to be at the
concession by November 1, 1999. Once this equipment is in place the Company
expects production to reach 1,000 cubic yards of alluvial ore processed per day.
The mining process is open pit placer mining. A large pit is dug and
allowed to fill with groundwater. Alluvial ore is pumped from the bottom of the
pit, screened for rough diamonds and then processed through the Super Bowl for
removal of the gold ore. The Company anticipates a twenty person operation.
Rough diamonds and gold ore will be sold to ore buyers on site or shipped to
buyers in Caracas.
Employees: The Company has no employees at present other than its officers. The
Company's Venezuela Subsidiary intends to employ approximately twenty laborers
and two geologists, one mining engineer and other professionals to run the
operation.
Item 2. Management's Discussion and Analysis or Plan of Operation
- -----------------------------------------------------------------
Plan of Operations
As a company in its initial stages of development, the company has no
revenues from operations.
The Company has filed this Form 10SB Registration Statement in order to
establish itself as a fully reporting company under the Securities Exchange Act
of 1934. On the basis of the public information provided thereby, the Company
intends to seek a listing of its common stock on the National Association of
Securities Dealers, Inc., OTC Electronic Bulletin Board Market. It is the
Company's belief that an independent market for its common stock will be
advantageous to the Company by establishing an objective measure of value for
the common stock.
The Company's business plan is to raise additional capital through private
placements or public offerings of its equity securities and use the capital for
development of its mining operation.
5
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Liquidity and Capital Resources.
The company is not at present producing revenues and its main source of
funds has been the sale of the company's equity securities. The company has
shares of common stock for a total consideration of $809,431 through September
30, 1999. All cash is a present being used to fund ongoing general and
administrative expenses with the total of such expenses estimated to be
approximately $25,000 per month. As a result the Company has enough present cash
to meet its needs for ten months. The company will need to raise additional
capital to meet its ongoing overhead obligations and the contemplated
development program. Such funding may be obtained through the sale of additional
securities.
The capital resources of the company are limited. At present the company is
not producing revenues and is not expected to produce revenues until December,
1999. The main source of funds for working capital at present is the sale of the
company's equity securities. Other possible sources of funding are loans from
shareholders, or financial institutions, with the company's concession interests
as collateral for the institutions. However, the collateral value of such
leasehold interests is limited.
Result of Operations
During the period from the company's inception to June 30, 1999, there were
no revenues being realized from sale of assets, production or from any other
source. General and administrative expenses incurred for the six months ended
June 30, 1999 were $2,214.
Effect of Inflation: The Company believes that inflation does not have a
material affect on its business. Inflation in Venezuela is nominal and not
expected to exceed 4% at most. Inflation concerns are not material.
Year 2000 Computer Problems: Many existing computer programs use only two digits
to identify a year in the date field. These programs were designed and developed
without considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous results by
or at the Year 2000. The Year 2000 issue affects virtually all companies and
organizations.
Although many companies undertake major projects to address the Year 2000
issue, Management does not believe that its operations are highly dependent upon
computer programs. However, the Company has undertaken to ensure that its
associated computer fields were designed and constructed to receive and
manipulate four digit integers instead of only two. The Company's computer
system has been evaluated and found to adequately address the Year 2000 Issue.
As a result, no additional costs are expected to be incurred. The Company does
not anticipate any material risk resulting from Year 2000 issues in that its
computer programs are relatively simple word processing and accounting programs
which have been certified as Year 2000 ready. In addition, the Company maintains
physical files of all essential documents and data.
6
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Item 3. Description of Property
- -------------------------------
The Company, through its Venezuela Subsidiary has signed an agreement to
acquire a mining concession covering more than three square kilometers of the
alluvial diamond and gold mining concession named Codsa 13, located in the Gran
Sabana Autonomous Municipality, State of Bolivar, in the extreme south east of
Venezuela. The acreage covered by the concession has not been sufficiently
developed to indicate any proven or probable reserves of recoverable gold or
diamonds. There has been limited production on the concession by the Seller. The
Company's offices in Vancouver, British Columbia, Canada are approximately 1,800
square feet and are leased from a third party pursuant to a month to month lease
at the rate of $1,200US per month.
7
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Item 4. Security Ownership of Certain Beneficial Owners and Management
- ----------------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners holding five percent
or greater of the 16,512,250 shares of common stock outstanding as of
September 30, 1999.
Title of Name and Address Amount and Nature % of
Class of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------------
Common Robert Elliot Lee 2,500,000 15.1%
11 Piper Place
Palmerston North, New Zealand
AML Diamond & Gold 3,500,000 21.2%
Exploration, Inc.
Apartado 6-5172, El Dorado Panama
Republica De Panama
(b) Security Ownership of Management
Title of Name and Address(1) Amount and Nature % of
Class of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------------
Common Robert Lee, Jr.(2) 4,150,000 25.1%
Martial Levasseur (3) 4,150,000 25.1%
All officers and Directors
as a Group (2 persons) 8,300,0000 50.2%
(1) The Address of the Company is Suite 1458 - 409 Granville Street, Vancouver,
B.C. V6C1T2
(2) Includes the 3,200,000 shares held by: Robert Elliot Lee (2,500,000 shares
reported above), the father of Mr. Lee; Katrina Lee (350,000 shares), the
sister of Mr. Lee; and Shari Lee (350,000 shares), the sister of Mr. Lee
which Mr. Lee disclaims beneficial ownership.
(3) Includes 1,650,000 shares held by: Peter Levasseur (950,000 shares), the
son of Martial Levasseur; John Levasseur (350,000 shares), the son of
Martial Levasseur; and Anna Levasseur (350,000 shares), the daughter of
Martial Levasseur, which Martial Levasseur disclaims beneficial ownership.
Changes in Control: There are no arrangements, which may result in a change in
control of the issuer.
8
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Item 5. Directors, Executive Officers, Promoters and Control Persons
- --------------------------------------------------------------------
(a) Directors and Executive Officers
NAME AGE POSITION 1ST YEAR
Martial Levasseur 65 President, Secretary, Treasurer, Director 1997
Robert E. Lee 30 Director 1997
Business Experience
Martial Levasseur - 65. 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 - 30. Mr. Lee has served as a Director of the Company since March
15, 1997. Mr. Lee is the son of Robert Edward Lee, a founder of the Company. Mr.
Lee graduated from the Massey University School of Aviation, Palmerson North,
New Zealand in 1996. Mr. Lee's business experience is as follows:
Present: Ken Borek Air - Male Republic of Maldives - Pilot
1998-June '99 Consolidated Silver Tusk Mines, Ltd., North West Territories. Mr
Lee was responsible for Investor Relations and general
administration.
1995-1998 Flight Operations Coordinator-Pilot. Massey University School of
Aviation, Palmerson North, New Zealand.
1996-1998 Charter Pilot and Flight Instructor. Manawatu Districts Aero Club,
Palmerson North, New Zealand.
9
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(b) Significant Employees: None
Item 6. Executive Compensation
- ------------------------------
(a) Summary Compensation Table: The Company has omitted the Summary
Compensation Table as it has not paid any cash compensation, non-cash
compensation or bonuses and nor has any such compensation been
accrued.
(b) Option/SAR Grants in Last Fiscal Year (Individual Grants): The Company
does not presently have a Stock Option Plan nor have any other options
been granted to date.
(c) Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end
Option/SAR Values : None
(d) Long-term Incentive Plans -- Awards in Last Fiscal Year: None
The Company has not otherwise awarded any stock options, stock appreciation
rights or other form of derivative security or common stock or cash bonuses to
its executive officers and directors.
(e) Compensation of Directors
1. Standard Arrangements: The members of the Company's Board of
Directors are reimbursed for actual expenses incurred in
attending Board meetings.
2. Other Arrangements: There are no other arrangements.
(f) Employment Contracts And Termination of Employment, And
Change-in-control Arrangements
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The Company's officer and directors do not have employment agreements and
do not presently draw a salary. The Company expects that as and when additional
funding or revenue is obtained, a salary and other compensation such as stock
options will be adopted.
Item 7. Certain Relationships and Related Transactions
- ------------------------------------------------------
The Company has not entered into any transactions with Management.
Item 8. Description of Securities
- ---------------------------------
The authorized capital stock of Company consists of 200,000,000 shares of common
stock. No warrants to acquire common stock have been authorized. There are no
outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any shares of the Company's common stock.
The common stock carry no preemptive rights, are not convertible, redeemable,
assessable or entitled to the benefits of any sinking fund. The common stock
affords the holders no cumulative voting rights, and the holders of a majority
of the shares voting for the election of the directors can elect all of the
directors if they should choose to do so.
PART II
Item 1. Market Price of and Dividends on the Company's Common Equity and Other
Shareholder Matters
(a) Market Information
The Company's stock is not listed for sale on any exchange or trading medium.
The Company intends to seek the listing of its Common Stock on the OTC
Electronic Bulletin Board upon the effectiveness of this Form 10-SB. Until such
time, there is no public market for the Company's Common Stock.
(b) Holders
There are fifty-two holders of the Company's Common Stock as of September 15,
1999. There were six holders of restricted securities as defined by Rule 144,
two of which have not held their shares in excess of one year.
(c) Dividends
The Company has paid no dividends to date on its Common Stock. The Company
reserves the right to declare a dividend when operations merit.
Item 2. Legal Proceedings
11
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There is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting the Company, or any of its properties,
business affairs or business prospects of the Company.
Item 3. Changes in and Disagreements with Accountants: None
Item 4. Recent Sales of Unregistered Securities
During the past three years, the Company sold securities, which were not
registered under the Securities Act of 1933, as amended, as set forth below.
Date Name # of shares issued Consideration
- ---- ---- ------------------ -------------
4/15/97 Martial H. Levesseur 2,500,000 $ 25,000.00
4/15/97 Robert Elliot Lee 2,500,000 $ 25,000.00
4/15/97 Robert Edward Lee 950,000 $ 9,500.00
4/15/97 Peter Levasseur 950,000 $ 9,500.00
4/15/97 Toni Cross 500,000 $ 5,000.00
4/15/97 Kyrstna Kwiatkowska 500,000 $ 5,000.00
4/15/97 Lisa Martin 350,000 $ 3,500.00
4/15/97 Shari Lee 350,000 $ 3,500.00
4/15/97 Katrina Lee 350,000 $ 3,500.00
4/15/97 John Levasseur 350,000 $ 3,500.00
4/15/97 Mary Creelman 350,000 $ 3,500.00
4/15/97 Anna Levasseur 350,000 $ 3,500.00
6/6/97 Brent Wipp 400,000 $ 100,000.00
6/6/97 World Technical Supply Inc. 600,000 $ 150,000.00
12/1/97 Louis Kish 80,000 $ 20,000.00
12/1/97 Wendy C. Poole 10,000 $ 2,500.00
12/1/97 David Babbitt 10,000 $ 2,500.00
12/1/97 Sam Winrob 10,000 $ 2,500.00
12/2/97 John F. Kish 20,000 $ 5,000.00
12/2/97 Alan M. smith 10,000 $ 2,500.00
12/6/97 Ronald M. Dressler 40,000 $ 10,000.00
12/8/97 Diametric Resources 30,000 $ 7,500.00
12/8/97 Roman Lohyn 30,000 $ 7,500.00
12/9/97 Jerry Meints 10,000 $ 2,500.00
12/10/99 Russ Borneman 40,000 $ 10,000.00
12/12/97 Larry E. La Casse 33,800 $ 8,450.00
12
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12/16/97 Don Storie 10,000 $ 2,500.00
12/31/97 Michael Stokel 10,000 $ 2,500.00
1/23/98 Peter Ross St. John 20,000 $ 5,000.00
1/24/98 Ken & Lynn Burrows 20,000 $ 5,000.00
2/10/98 Galante Group 100,000 $ 25,000.00
11/18/98 Jonas Dubas 10,000 $ 2,500.00
1/5/99 Peter Ntokolas 10,000 $ 2,500.00
1/5/99 Demetre Theodosakis 10,000 $ 2,500.00
1/7/99 George Zambas 10,000 $ 2,500.00
1/27/99 Peter Levasseur 96,000 $ 24,000.00
2/15/99 Louis Kish 58,450 $ 14,612.50
11/2/98 Dino Panagiotou 10,000 $ 2,500.00
2/16/98 Stephan Eschmann 40,000 $ 10,000.00
2/16/98 Craigmyle Company, SA 100,000 $ 25,000.00
6/25/99 Mohamad Youssef Merhi 50,000 Concession Acquistion
6/25/99 AML Diamond & Gold Exploration 3,500,000 Concession Acquistion
7/11/99 Deepak Anand & Nandini Anand 10,000 $ 2,500.00
7/11/99 Khial Aheer 10,000 $ 2,500.00
7/11/99 Khial Aheer 8,000 $ 2,000.00
7/11/99 Fred May Kang Chang 8,000 $ 2,000.00
7/11/99 Jamil Younes 10,000 $ 2,500.00
7/11/99 Joana Colettis 10,000 $ 2,500.00
7/11/99 John Constantinidis 10,000 $ 2,500.00
7/11/99 Bill Strimmenos 10,000 $ 2,500.00
7/11/99 Nick Constanti 10,000 $ 2,500.00
7/11/99 Andrew Papapangiotou 10,000 $ 2,500.00
7/11/99 Louis Kish 20,000 $ 5,000.00
7/11/99 Yangui Xie 4,000 $ 1,000.00
7/11/99 Neville Render 1,000,000 $ 250,000.00
7/20/99 Dennis Brovarone 20,000 Services
The Company was not a reporting company pursuant to the Securities Exchange Act
of 1934 nor was it a development stage company with no business plan. Thus it
was eligible to rely upon Rule 504 as a safe harbor exemption from the
registration requirements of the Securities Act of 1933. Moreover, Rule 504 was
available in that the Company sold less than $1,000,000.00 worth of securities
in the previous 12 month period and except for the Company's officers and
directors, the purchasers were unaffiliated investors. The Company relied upon
the Rule 504 safe harbor exemption for the sales of securities for cash. These
sales were entirely private transactions pursuant to which all material
information as specified in Rule 502(b)(2) was made available to the purchasers.
13
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The Company relied upon the exemption from registration set forth in section
4(2) of the Securities Act of 1933 for its sale of shares to its officers,
directors and legal counsel. The purchasers in the sale whereby the Company
acquired its concession rights were sophisticated investors who were provided
all material information regarding the Company. In addition, the Company placed
a restrictive legend upon the certificates issued to the purchasers denoting the
securities are "restricted securities" or held by a control person of the
Company and may only be sold in compliance with Rule 144. Thus the exemptions
from registration afforded by Rule 4(2) and Rule 3(b) were available to the
issuer.
Item 5. Indemnification of Directors and Officers
Article 11 of the Company's By-laws provides that every person who was or
is a party or is threatened to be made a party to or is involved in any action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or a person for whom he is the legal representative
is or was a director or officer of the corporation or is or was serving at the
request of the corporation or for its benefit as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the fullest
extent legally permissible under the General Corporation Law of the State of
Nevada against all expenses, liability and loss (including attorney's fees,
judgments, fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in connection therewith.
14
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APOLO GOLD, INC.
(A Development Stage Company)
Financial Statements
June 30, 1999
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
C O N T E N T S
Independent Auditor's Report...........................................1
Balance Sheets..........................................................2
Statements of Operations................................................3
Statement of Shareholders' Equity.......................................4
Statements of Cash Flows................................................6
Notes to the Financial Statements.......................................8
-15-
<PAGE>
The Board of Directors
Apolo Gold, Inc.
(A Development Stage Company)
Vancouver, B.C.
CANADA
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Apolo Gold, Inc. (a
development stage company) as of June 30, 1999, December 31, 1998 and 1997, and
the related statements of operations, shareholders' equity (deficit), and cash
flows for the six months and years then ended, and from inception on March 18,
1997 through June 30, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Apolo Gold, Inc. as of June 30,
1999, December 31, 1998 and 1997, and the results of its operations and its cash
flows for the six months and years then ended and from inception on March 18,
1997 through June 30, 1999 in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 9 to the
financial statements, the Company's significant operating losses raise
substantial doubt about its ability to continue as a going concern. Mangement's
plans for the resolution of this situation are also discussed in Note 9. 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
September 10, 1999
-16-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998 1997
<S> <C> <C> <C>
A S S E T S
CURRENT ASSETS
Cash $ 10,143 $ 2,194 $ 100,185
Deposit 50,000 - -
------ ----- -------
60,143 2,194 100,185
------ ----- -------
FIXED ASSETS
Equipment 4,100 - -
Less accumulated depreciation (34) - -
Total Fixed Assets 4,066 - -
----- ----- -------
TOTAL ASSETS $ 64,209 $ 2,194 $ 100,185
=========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
<S> <C> <C> <C>
CURRENT LIABILITIES
Loans payable $ 5,000 $ 992 $ -
Shareholder advance 50,000 - -
Officer payable 189,859 161,917 30,016
------- ------- ------
Total current liabilities 244,859 162,909 30,016
------- ------- ------
TOTAL LIABILITIES 244,859 162,909 30,016
------- ------- ------
COMMITMENTS AND CONTINGENCIES - - -
------- ------- ------
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, 200,000,000 shares authorized,
$0.001 par value; 12,942,250, 12,517,800
and 11,377,800 shares issued and
outstanding, respectively 12,942 12,518 11,378
Additional paid-in-capital 796,489 716,681 433,073
Stock subscriptions receivable (250,000) (250,000) (54,000)
Accumulated deficit during developmental stage (740,081) (639,914) (320,282)
-------- -------- --------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (180,650) (160,715) 70,169
======== ======== ======
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $ 64,209 $ 2,194 $ 100,185
========== ========= ==========
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-2-
-17-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
From
Six March 18, 1997
Months Ended Years Ended (Inception) to
June 30, December 31, June 30,
1999 1998 1997 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES $ - $ 38,021 $ - $ 38,021
COST OF REVENUES - - - -
------- ------- ------ ------
GROSS PROFIT - 38,021 - 38,021
------- ------- ------ ------
E X P E N S E S
Mineral property exploration expenses 70,919 292,921 265,943 629,783
Consulting and professional fees 27,000 62,000 46,000 135,000
General and administrative expenses 2,214 2,732 8,339 13,285
Depreciation 34 - - 34
------- ------- ------- -------
TOTAL EXPENSES 100,167 357,653 320,282 778,102
------- ------- ------- -------
NET LOSS $ (100,167) $ (319,632) $ (320,282) $ (740,081)
=========== =========== ========== ===========
NET LOSS PER COMMON SHARE $ (0.0085) $ (0.0279) $ (0.0401) $ (0.0716)
=========== =========== ========== ===========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING 11,823,591 11,458,129 7,996,833 10,342,176
========== ========== ========= ==========
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-3-
-18-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Stock Deficit during Total
Number Paid-In Subscriptions Development Stockholders'
of Shares Amount Capital Receivable Stage Equity
--------- ------ ------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balance
March 18, 1997 - $ - $ - $ - $ - $ -
Issuance of shares at $0.01
per share for services 4,600,000 4,600 41,400 - - 46,000
Issuance of shares at $0.01
per share for note 5,400,000 5,400 48,600 (54,000) - -
Issuance of shares at $0.25
per share for cash 1,377,800 1,378 343,073 - - 344,451
Net loss - - - - (320,282) (320,282)
-------- -------- -------- -------- --------- ---------
Balance,
December 31, 1997 11,377,800 11,378 433,073 (54,000) (320,282) 70,169
Issuance of shares at
approximately $0.25
per share for cash 140,000 140 34,608 - - 34,748
Payment of stock subscription
in exchange for services - - - 54,000 - 54,000
-------- -------- -------- -------- -------- --------
Balance forward 11,517,800 $ 11,518 $ 467,681 $ - $ (320,282) $ 158,917
========== ========== =========== ============= ============ ============
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-4-
-19-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Stock Deficit during Total
Number Paid-In Subscriptions Development Stockholders'
of Shares Amount Capital Receivable Stage Equity
--------- ------ ------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balance brought forward 11,517,800 $ 11,518 $ 467,681 $ - $ (320,282) $ 158,917
Issuance of shares at $0.25
per share for note 1,000,000 1,000 249,000 (250,000) - -
Net loss - - - - (319,632) (319,632)
--------- --------- --------- --------- --------- ---------
Balance, December 31, 1998 12,517,800 12,518 716,681 (250,000) (639,914) (160,715)
Issuance of shares at $0.12
to $0.25 per share for cash 324,450 324 78,908 - - 79,232
Issuance of shares at $0.01
per share for equipment 100,000 100 900 - - 1,000
Net loss - - - - (100,167) (100,167)
--------- --------- --------- --------- --------- ---------
Balance, June 30, 1999 12,942,250 $ 12,942 $ 796,489 $ (250,000) $ (740,081) $ (180,650)
========== ========== =========== ============= ========== ============
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-5-
-20-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
From
Six March 18, 1997
Months Ended Years Ended (Inception) to
June 30, December 31, June 30,
1999 1998 1997 1999
------------- ------------------------ -----------------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net loss $ (100,167) $ (319,632) $ (320,282) $ (740,081)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation 34 - - 34
Consulting and professional fees
paid by issuance of stock 1,000 4,000 46,000 101,000
Decrease (increase) in:
Deposits (50,000) - - (50,000)
Increase (decrease) in:
Short term notes payable 5,000 992 - 5,992
Shareholder advance 50,000 - - 50,000
Officer payable 27,942 131,901 30,016 189,859
------ ------- ------ -------
Net cash (used) in operating activities (66,191) (132,739) (244,266) (443,196)
------- -------- -------- --------
Cash flows from investing activities:
Purchase of equipment (4,100) - - (4,100)
-------- ------- -------- --------
Cash flows from financing activities:
Proceeds from sale of common stock 78,240 34,748 344,451 457,439
------ ------ ------- -------
Increase (Decrease) in Cash $ 7,949 $ (97,991) $ 100,185 $ 10,143
---------- --------- ---------- ------------
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-6-
-21-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
From
Six March 18, 1997
Months Ended Years Ended (Inception) to
June 30, December 31, June 30,
1999 1998 1997 1999
------------- --------------------- ----------------
<S> <C> <C> <C> <C>
Increase (decrease) in cash - brought forward $ 7,949 $ (97,991) $ 100,185 $ 10,143
Cash, beginning of period 2,194 100,185 - -
--------- --------- -------- -------
Cash, end of period $ 10,143 $ 2,194 $ 100,185 $ 10,143
========== =========== =========== ==========
Supplemental disclosures:
Interest paid $ - $ - $ - $ -
========== =========== =========== ==========
Income taxes paid $ - $ - $ - $ -
========== =========== =========== ==========
Non-cash investing and financing activities:
Common stock issued for services $ 1,000 $ - $ 46,000 $ 47,000
Common stock subscriptions paid for by services $ - $ 54,000 $ - $ 54,000
Common stock issued for equipment $ 25,000 $ - $ - $ 25,000
Common stock issued for debt $ 992 $ - $ - $ 992
</TABLE>
The accompanying notes are an intergral part of these financial statements.
-7-
-22-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Apolo Gold, Inc. (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 has been in the development stage since its
inception. The Company conducts operations primarily from its offices in
Vancouver, British Columbia, Canada. The Company has formed a subsidiary
corporation in Venezuela. Although this entity has had no financial
transactions, the Company expects to use this subsidiary later in 1999 to
acquire a Venezuelan mining property.
On May 20, 1999, the Company entered into an agreement to purchase Apologold
C.A. (a Venezuelan company). Under the agreement, Apolo expects to acquire all
of the outstanding common stock minus one share of Apologold. Apolo will account
for the acquisition as a purchase of Apologold because the shareholders of Apolo
controlled operations after the acquisition. (Note 6.)
The Company is actively seeking additional capital and management believes that
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. Furthermore, the Company is in the development state, as it has not
realized any significant revenues from its planned operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Apolo Gold, Inc. 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 generally accepted accounting principles and have been consistently
applied in the preparation of the financial statements.
Accounting Method
- -----------------
The Company's financial statements are prepared using the accrual method of
accounting.
Loss per Share
- --------------
Loss per share is computed by dividing the net loss by the weighted average
number of shares outstanding during the period. The weighted average number of
shares is calculated by taking the number of shares outstanding and weighting
them by the amount of time that they were outstanding.
-8-
-23-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Estimates
- ---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Mineral Properties
- ------------------
Costs of acquiring, exploring and developing mineral properties are capitalized
by project area. Costs to maintain the mineral rights and leases are expensed as
incurred. When a property reaches the production stage, the related capitalized
costs will be amortized, using the units of production method on the basis of
periodic estimated ore reserves. Mineral properties are periodically assessed
for impairment of value and any losses are charged to operations at the time of
impairment.
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.
Cash and Cash Equivalents
- -------------------------
For purposes of the statement of cash flows, the Company considers all
short-term debt securities purchased with a maturity of three months or less to
be cash equivalents.
Impaired Asset Policy
- ---------------------
The Company reviews its long-lived assets quarterly to determine if any events
or changes in circumstances have transpired which indicate that the carrying
value of its assets may not be recoverable. At June 30, 1999, the Company has
written off amounts expended for its Panama operations. (Notes 4 and 6.)
Provision for Taxes
- -------------------
At June 30, 1999, the Company has a net operating loss of approximately
$740,000, which may be offset against future taxable income through 2013. No
provisions for taxes or tax benefit from net operating loss carryforwards has
been reported in the financial statements as the Company will probable continue
to experience operating losses during its development stage and it is currently
unknown if the carryforwards will expire unused.
-9-
-24-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Fair Value of Financial Instruments
- -----------------------------------
The carrying amounts for cash, marketable securities, accounts receivable,
accounts payable, notes payable and accrued liabilities approximate their fair
value.
Concentration of Risk
- ---------------------
The Company maintains its cash accounts in primarily one commercial bank in
Vancouver, British Columbia, Canada. The Company's cash account is a business
checking account maintained in United States dollars, which totaled $10,143,
$2,194 and $100,185 as of June 30, 1999, December 31, 1998 and 1997,
respectively.
NOTE 3 - MINERAL PROPERTIES
Venezuela
- ---------
In May 1999, the Company entered into an agreement to purchase a 100% minus 1
share interest in Apologold C.A. (a Venezuelan Company). The agreement was
finalized subsequent to the date of these financial statements. (Note 6.) Under
the terms of the agreement, the Company will acquire control over all rights for
the exploitation of alluvial diamonds and gold in a mining concession called
Codsa 13 located in the jurisdiction of Gran Sabana Autonomous Municipality,
State of Bolivar, Venezuela.
Panama
- ------
In October 1997, the Company entered into an agreement to purchase a 99%
interest in Golden Cycle of Panama, Inc. (a Panamanian company). Under terms of
the agreement, the Company would assume all profits and expenses for operating
Golden Cycle's mine located at the Conception River basin, Calovebora township,
District of Santa Fe, Province of Veraguas, Republic of Panama. Although
expenditures have been made on the property through June 30, 1999 and core
samples have been promising, operations have been abandoned due to nondelivery
of the shares of Golden's stock. The Company is attempting to restore the
agreement to its original terms (Note 6) and all amounts expended for the
venture have been charged to operations as incurred.
NOTE 4 - PROPERTY AND EQUIPMENT
Property and equipment are recorded at cost. Major additions and improvements
are capitalized. Minor replacements, maintenance and repairs that do not
increase the useful life of the assets are expensed as incurred. Depreciation of
property and equipment is determined using the straight-line method over the
expected useful lives of the assets of ten years. Depreciation expense for the
six months ended June 30, 1999 and the years ended December 31, 1998 and 1997
was $34, $-0-, and $-0-, respectively.
-10-
-25-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 5 - COMMON STOCK
During the year ended December 31, 1997, the Company issued 10,000,000 shares of
common stock to directors for services rendered and stock subscriptions
receivable. The shares were valued at $0.01 per share, which was the deemed fair
market value of the shares on the date of issuance.
During the year ended December 31, 1998, services were performed by directors in
payment of stock subscriptions receivable incurred during the year ended
December 31, 1997. These services were valued at $54,000. The Company also
issued 1,000,000 shares of common stock for stock subscriptions receivable,
valued at $0.25 per share, which is the fair market value of the shares on the
date of issuance. This amount was fully paid in September 1999.
During the six months ended June 30, 1999, the Company issued 100,000 shares of
common stock in exchange for services. The shares were valued at $0.01 per
share, which is the fair market value of the shares on the date of issuance.
As part of a purchase agreement, the Company has agreed to issue 50,000 shares
of common stock to Mohammed Youssef Merhi, and 3,500,000 shares of common stock
as a finder's fee to AML Diamond and Gold Exp., Inc. The stock is to be issued
at $0.01 per share. (Note 6.)
NOTE 6 - COMMITMENTS AND CONTINGENCIES
Apologold C.A. (a Venezuelan Company)
- -------------------------------------
In May 1999, the Company entered into an agreement to purchase a 100% minus one
share interest in Apologold, C.A. (a Venezuelan Company) for $3,500,000 plus
royalties and common stock. As of June 30, 1999, the Company has paid a $50,000
cash deposit towards finalization of this agreement. The deposit will be applied
towards the total purchase price with an additional $50,000 to be paid by
November 15, 1999. The remaining balance of the purchase price will be paid as
follows:
1. A 10% royalty from net production and an additional 2.5% of net production
profit will be applied towards the total purchase price until full payment
of the purchase price is achieved.
2. An additional 10% royalty from net production will be paid to Goldma C.A.
(a Venezuelan Company) as payment for rent and operational and technical
assistance.
3. 50,000 shares of the Company's common stock will be issued at a $0.01 per
share to Mohammed Youssef Merhi of
Goldma C.A. (a Venezuelan Company).
-11-
-26-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 6 - COMMITMENTS AND CONTINGENCIES (Continued)
Apologold C.A. (a Venezuelan Company) (Continued)
- -------------------------------------------------
4. The Company will also issue 3,500,000 shares of its common stock at $0.01
per share to AML Diamond and Gold Exp., Inc. in full payment of a finder's
fee. (Note 5.)
Upon completion of the agreement, the Company will acquire all the rights and
control of Apologold C.A., (a Venezuelan Company) which includes mineral
properties as described in Note 4. The agreement is expected to be completed in
late 1999.
Golden Cycle of Panama, Inc. (a Panamanian Company)
- ---------------------------------------------------
In October 1997, the Company entered into an agreement to purchase a 99%
interest in Golden Cycle of Panama, Inc. (a Panamanian Company). The agreement
called for a 6% royalty from gold production or minimum payments of $15,000
until May 1998, at which time the minimum payment increased to $20,000 until a
total of $5,000,000 had been paid. In addition, the Company was to make a
payment of approximately $97,000 for payment of Golden's outstanding debts. The
Company made payments as agreed, however, the shares of common stock of Golden
were never delivered. Further development of the mineral properties has been
suspended pending restoration of this agreement to its original standing.
Management does not expect to receive Golden's stock and has charged all
expenditures to operations as incurred. See Note 3.
NOTE 7 - RELATED PARTY
As of June 30, 1999, the Company has received a $50,000 cash advance from a
director. The advance, which is noninterest-bearing and uncollateralized, is
expected to be repaid once production commences.
The officer payable liability includes $189,859, $161,917 and $30,016 at June
30, 1999, December 31, 1998 and 1997, respectively. These amounts arise from
monies expended by officers in Panama and Venezuela for development and
operations.
The Company leases office facilities in Vancouver, British Columbia, Canada from
an officer. The lease is classified as a month to month tenancy and provides for
quarterly payments of $500.
NOTE 8 - SUBSEQUENT EVENTS
As described in Note 6, the Company is completing a purchase agreement for a
100% minus one share interest in Apologold C.A. (a Venezuelan Company).
Management expects the agreement to be completed in late 1999. (Note 6.)
-12-
-27-
<PAGE>
APOLO GOLD, INC.
(A Development Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
June 30, 1999
NOTE 8 - SUBSEQUENT EVENTS (Continued)
The Company is continuing efforts to restore a purchase agreement for a 99%
interest in Golden Cycle of Panama, Inc. to its original standing. Management
does not expect to receive Golden's common stock as originally agreed. (Note 6.)
NOTE 9 - GOING CONCERN
As shown in the financial statements, the Company incurred a net loss of
$100,167 for the six months ended June 30, 1999 and has an accumulated deficit
of $740,081 since inception.
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's management expects to attract
additional investment capital and believes that significant and imminent private
placements will generate sufficient cash for the Company to operate for the next
few years.
NOTE 10 - YEAR 2000 ISSUES
The Company has modified its business technologies to be ready for the year
2000. Critical data processing systems have been reviewed and the Company does
not expect a significant effect on internal operations. However, like other
companies, Apolo Gold, Inc. could be adversely affected if the computer systems
its suppliers or customers use do not properly process and calculate
date-related information and data for the period surrounding and including
January 1, 2000. This is commonly known as the "Year 2000" issue. Additionally,
this issue could impact non-computer systems and devices such as production
equipment, elevators, etc. At this time, because of the complexities involved in
the issue, management cannot provide assurances that the Year 2000 issue will
not have an impact on the Company's operations. The costs related to year 2000
compliance are expensed as incurred.
-13-
-28-
<PAGE>
PART III
Item 1. Index to Exhibits
3.1 Articles of Incorporation
3.2 By-laws
10.1 Concession Purchase Agreement dated November 17, 1999
10.2 Assignment Agreement Apologold, C.A. and Apolo Gold, Inc. dated
May 20, 1999
27 Financial Data Schedule
-29-
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Company caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
APOLO GOLD, INC.
By:
/s/ MARTIAL H. LEVASSEUR
- ------------------------
Martial H. Levasseur, President, Secretary-Treasurer Director
October 22, 1999
/s/ ROBERT ELLIOT LEE, JR.
- --------------------------
Robert E. Lee, Jr., Director
October 22, 1999
-30-
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVEDA
MAR 19 1997
C557697
DEAN HELLER SECRETARY OF STATE
No. /s/ Dean Heller
ARTICLES OF INCORPORATION
OF
APOLO GOLD INC.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have this day voluntarily associated ourselves together
for the purpose of forming a corporation under the laws of the State of Nevada
and do hereby certify:
ONE
The name of this corporation is APOLO GOLD INC.
TWO
The resident agent of said corporation shall be Pacific Corporate Services
Company, 7631 Bermuda Road, Las Vegas, NV., 89123 and such other offices as may
be determined by the By-Laws in and outside the State of Nevada.
THREE
The objects to be transacted, business and pursuit and nature of the business,
promoted or carried on by this corporation are and shall continue to be engaged
in any lawful activity.
FOUR
The members of the governing board shall be styled Directors and the first Board
of Directors shall consist of one (1). The number of stockholders of said
corporation shall consist of one (1). The number of directors and shareholders
of this corporation may, from time to time, be increased or decreased by an
amendment to the By-Laws of this corporation in that regard, and without the
necessity of amending these Articles of Incorporation. The name and address of
the first Board of Directors and of the Incorporator signing these Articles as
follows:
ROBERT E. LEE 62 Deerfield Drive
Delta, B.C., Canada,
V4M - 2W9
-31-
<PAGE>
FIVE
The Corporation is to have perpetual existence.
SIX
The total authorized capitalization of this Corporation shall be and is the sum
of 200,000,000 shares of Common Stock at $0.001 par value, said stock to carry
full voting power and the said shares shall be issued fully paid at such time as
the Board of Directors may designate in exchange for cash, property, or
services, the stock of other corporations or other values, rights, or things,
and the judgement of the Board of Directors as to the value thereof shall be
conclusive.
SEVEN
The capital stock shall be and remain non-assessable. The private property of
the stockholders shall not be liable for the debts or liabilities of the
Corporation.
IN WITNESS WHEREOF, I have set my hand this 13th day of March, 1997.
/s/ Robert E. Lee
Robert E. Lee
Province of British Columbia )
Canada )
On this 13th day of March, 1997 before me, a Notary Public in and for said,
Province of British Columbia, Canada. Personally appeared, Robert E. Lee known
to me to be the person whose name is subscribed to the foregoing instrument, and
he duly acknowledged to me that he executed the same for the purpose therein
mentioned.
IN WITNESS WHEREOF, I have set my hand and offered by official seal in, The City
of Vancouver, Province of British Columbia, Canada, the day and year in this
Certificate first above written.
Notary Public
/s/ (Signature Notary Public)
-32-
<PAGE>
BYLAWS
OF
APOLO GOLD INC.
A Nevada Corporation
ARTICLE 1
---------
Offices
SECTION 1. The registered office of this corporation shall be in the County of
Clark, State of Nevada.
SECTION 2. The corporation may also have offices at such other places both
within and without the State of Nevada as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE 2
---------
Meetings of Stockholders
SECTION 1. All annual meetings of the stockholders shall be held at the
registered office of the corporation or at such other place within or without
the State of Nevada as the Directors shall determine. Special meetings of the
stockholders may be held at such time and place within or without the State of
Nevada as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
SECTION 2. Annual meetings of the stockholders, shall be held at such time as
may be set by the Board of Directors from time to time, at which the
stockholders shall elect by vote a Board of Directors and transact such other
business as may properly be brought before the meeting.
SECTION 3. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the Articles of Incorporation, may
be called by the President or the Secretary by resolution of the Board of
Directors or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose of the proposed meeting.
SECTION 4. Notices of meetings shall be in writing and signed by the President
or Vice-President or the Secretary or an Assistant Secretary or by such other
person or persons as the Directors shall designate. Such notice shall state the
purpose or purposes for which the meeting is called and the time and the place,
which may be within or without this State, where it is to be held. A copy of
such notice shall be either delivered personally to or shall be mailed, postage
prepaid, to each stockholder of record entitled to vote at such meeting not less
than ten nor more than sixty days before such meeting. If mailed, it shall be
directed to a stockholder at his address as it appears upon the records of the
corporation and upon such mailing of any such notice, the service thereof shall
be complete and the time of the notice shall begin to run from the date upon
which such notice is deposited in the mail for transmission to such stockholder.
Personal delivery of any such notice to any officer of a corporation or
association, or to any member of a partnership shall constitute delivery of such
notice to such corporation, association or partnership. In the event of the
transfer of stock after delivery of such notice of and prior to the holding of
the meeting it shall not be necessary to deliver or mail notice of the meeting
to the transferee.
1
-33-
<PAGE>
SECTION 5. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice.
SECTION 6. The holders of a 10% of the stock issued and outstanding and entitled
to vote thereat, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of business
except as otherwise provided by statute or by the Articles of Incorporation. If,
however, such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote there at, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a quorum shall be
present or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. The Company may have more than
one shareholder.
SECTION 7. When a quorum is present or represented at any meeting, the vote of
the holders of a 10% of the stock having voting power present in person or
represented by proxy shall be sufficient to elect directors or to decide any
question brought before such meeting, unless the question is one upon which by
express provision of the statutes or of the Articles of Incorporation, a
different vote shall govern and control the decision of such question.
SECTION 8. Each stockholder of record of the corporation shall be entitled at
each meeting of stockholders to one vote for each share of stock standing in his
name of the books of the corporation. Upon the demand of any stockholder, the
vote for Directors and the vote upon any question before the meeting shall be by
ballot.
SECTION 9. At any meeting of the stockholders any stockholder may be represented
and vote by a proxy or proxies appointed by an instrument in writing. In the
event that any such instrument in writing shall designate two or more persons to
act as proxies, a majority of such persons present at the meeting, or, if only
one shall be present, then that one shall have and may exercise all of the
powers conferred by such written instrument upon all of the persons so
designated unless the instrument shall otherwise provide. No proxy or power of
attorney to vote shall be used to vote at a meeting of the stockholders unless
it shall have been filed with the secretary of the meeting when required by the
inspectors of election. All questions regarding the qualifications of voters,
the validity of proxies and the acceptance of or rejection of votes shall be
decided by the inspectors of election who shall be appointed by the Board of
Directors, or if not so appointed, then by the presiding officer of the meeting.
SECTION 10. Any action which may be taken by the vote of the stockholders at a
meeting may be taken without a meeting if authorised by the written consent of
stockholders holding at least a majority of the voting power, unless the
provisions of the statutes or of the Articles of Incorporation require a greater
proportion of voting power to authorise such action in which case such greater
proportion of written consents shall be required.
ARTICLE 3
---------
Directors
SECTION 1. The business of the corporation shall be managed by it's Board of
Directors which may exercise all such powers of the corporation and do all such
lawful acts and things as are not by statute or by the Articles of Incorporation
or by these Bylaws directed or required to be exercised or done by the
stockholders.
SECTION 2. The number of Directors which shall constitute the whole board shall
be One. The number of Directors may from time to time be increased or decreased
to not less than one nor more than fifteen by action of the Board of Directors.
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The Directors shall be elected at the annual meeting of the stockholders and
except as provided in Section 2 of this Article, each Director elected shall
hold office until his successor is elected and qualified. Directors need
not be stockholders.
SECTION 3. Vacancies in the Board of Directors including those caused by an
increase in the number of directors, may be filled by a majority of the
remaining Directors, though less than a quorum, or by a sole remaining Director,
and each Director so elected shall hold office until his successor is elected at
an annual or a special meeting of the stockholders. The holders of a two-thirds
of the outstanding shares of stock entitled to vote may at any time peremptorily
terminate the term of office of all or any of the Directors by vote at a meeting
called for such purpose or by a written statement filed with the secretary or ,
in his absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the vacancies
on the Board of Directors resulting therefrom shall only be filled from the
stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to exist
in case of the death, resignation or removal of any Directors, or if the
authorised number of Directors be increased, or if the stockholders fail at any
annual or special meeting of stockholders at which any Director or Directors are
elected to elect the full authorised number of Directors to be voted for at that
meeting.
The stockholders may elect a Director or Directors at any time to fill any
vacancy or vacancies not filled by the Directors. If the Board of Directors
accepts the resignation of a Director tendered to take effect at a future time,
the Board or the stockholders shall have power to elect a successor to take
office when the resignation is to become effective.
No reduction of the authorised number of Directors shall have the effect of
removing any Director prior to the expiration of his term of office.
ARTICLE 4
---------
Meetings of the Board of Directors
SECTION 1. Regular meetings of the Board of Directors shall be held at any place
within or without the State which has been designated from time to time by
resolution of the Board or by written consent of all members of the Board. In
the absence of such designation regular meeting shall be held at the registered
office of the corporation. Special meetings of the Board may be held either at a
place so designated or at the registered office.
SECTION 2. The first meeting of each newly elected Board of Directors shall be
held immediately following the adjournment of the meeting of stockholders and at
the place thereof. No notice of such meeting shall be necessary to the directors
in order legally to constitute the meeting, provided a quorum be present. In the
event such meeting is not so held, the meeting may be held at such time and
place as shall be specified in a notice given hereinafter provided for special
meetings of the Board of Directors.
SECTION 3. Regular meetings of the Board of Directors may be held without call
or notice at such time and at such place as shall from time to time be fixed and
determined by the Board of Directors.
SECTION 4. Special meetings of the Board of Directors may be called by the
Chairman or the President or by the Vice-President or by any two directors.
Written notice of the time and place of special meetings shall be delivered
personally to each director, or sent to each director by mail or by other form
of written communication, charges prepaid, addressed to him at his address as it
is shown upon the records or if not readily ascertainable, at the place in which
the meetings of the directors are regularly held. In case such notice is mailed
or telegraphed, it shall be deposited in the United States mail or delivered to
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the telegraph company at least forty-eight (48) hours prior to the time of the
holding of the meeting. In case such notice is delivered as above provided, it
shall be so delivered at least twenty-four (24) hours prior to the time of the
holding of the meeting. Such mailing, telegraphing or delivery as above provided
shall be due, legal and personal notice to such director.
SECTION 5. Notice of the time and place of holding an adjourned meeting need not
be given to the absent directors if the time and place be fixed at the meeting
adjourned.
SECTION 6. The transaction of any meeting of the Board of Directors, however
called and noticed or wherever held, shall be as valid as though had at a
meeting duly held after regular call and notice, if a quorum be present, and if,
either before or after the meeting, each of the directors not present signs a
written waiver of notice, or a consent to holding such meeting, or approvals of
the minutes thereof. All such waivers, consents or approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.
SECTION 7. A majority of the authorised number of directors shall be necessary
to constitute a quorum for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board of Directors, unless a greater number be
required by law or by the Articles of Incorporation. Any action of a majority,
although not at a regularly called meeting, and the record thereof, if assented
to in writing by all of the other members of the Board shall be as valid and
effective in all respects as if passed by the Board in regular meeting.
SECTION 8. A quorum of the directors may adjourn any directors meeting to meet
again at stated day and hour; provided, however, that in the absence of a
quorum, a majority of the directors present at any directors meeting, either
regular or special, may adjourn from time to time until the time fixed for the
next regular meeting of the Board.
ARTICLE 5
---------
Committees of Directors
SECTION 1. The Board of Directors may, by resolution adopted by a majority of
the whole Board, designate one or more committees of the Board of Directors,
each committee to consist of two or more of the directors of the corporation
which, to the extent provided in the resolution, shall and may exercise the
power of the Board of Directors in the management of the business and affairs of
the corporation and may have power to authorise the seal of the corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by the
Board of Directors. The members of any such committee present at any meeting and
not disqualified from voting may, whether or not they constitute a quorum,
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any absent or disqualified member. At meetings of such
committees, a majority of the members or alternate members at any meeting at
which there is a quorum shall be the act of the committee.
SECTION 2. The committee shall keep regular minutes of their proceedings and
report the same to the Board of Directors.
SECTION 3. Any action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken without a meeting if
a written consent thereto is signed by all members of the Board of Directors or
of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or committee.
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ARTICLE 6
---------
Compensation of Directors
SECTION 1. The directors may be paid their expenses of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like reimbursement and compensation for attending
committee meetings.
ARTICLE 7
---------
Notices
SECTION 1. Notices to directors and stockholders shall be in writing and
delivered personally or mailed to the directors or stockholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
SECTION 2. Whenever all parties entitled to vote at any meeting, whether of
directors or stockholders, consent, either by a writing on the records of the
meeting or filed with the secretary, or by presence at such meeting and oral
consent entered on the minutes, or by taking part in the deliberations at such
meeting without objection, the doings of such meeting shall be as valid as if
had at a meeting regularly called and noticed, and at such meeting any business
may be transacted which is not excepted from the written consent to the
consideration of which no object for want of notice is made at the time, and if
any meeting be irregular for want of notice or of such consent, provided a
quorum was present at such meeting, the proceedings of said meeting may be
ratified and approved and rendered likewise valid and the irregularity or defect
therein waived by a writing signed by all parties having the right to vote at
such meeting; and such consent or approval of stockholders may be by proxy or
attorney, but all such proxies and powers of attorney must be in writing.
SECTION 3. Whenever any notice whatever is required to be given under the
provisions of the statutes, of the Articles of Incorporation or of these Bylaws,
a waiver thereof in writing, signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE 8
---------
Officers
SECTION 1. The officers of the corporation shall be chosen by the Board of
Directors and shall be a President, a Secretary and a Treasurer. Any person may
hold two or more officers.
SECTION 2. The Board of Directors at it's first meeting after each annual
meeting of stockholders shall choose a Chairman of the Board who shall be a
director, and shall choose a President, a Secretary and a Treasurer, none of
whom need be directors.
SECTION 3. The Board of Directors may appoint a Vice-Chairman of the Board,
Vice-Presidents and one or more Assistant Secretaries and Assistant Treasurers
and such other officers and agents as it shall deem necessary who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
SECTION 4. The salaries and compensation of all officers of the corporation
shall be fixed by the Board of Directors.
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SECTION 5. The officers of the corporation shall hold office at the pleasure of
the Board of Directors. Any officer elected or appointed by the Board of
Directors may be removed any time by the Board of Directors. Any vacancy
occurring in any office of the corporation by death, resignation, removal or
otherwise shall be filled by the Board of Directors.
SECTION 6. The CHAIRMAN OF THE BOARD shall, preside at meetings of the
stockholders and the Board of Directors, and shall see that all orders and
resolutions of the Board of Directors are carried into effect.
SECTION 7. The VICE-CHAIRMAN shall, in the absence or disability of the Chairman
of the Board, perform the duties and exercise the powers of the Chairman of the
Board and shall perform other such duties as the Board of Directors may from
time to time prescribe.
SECTION 8. The PRESIDENT shall be the chief executive officer of the corporation
and shall have active management of the business of the corporation. He shall
execute on behalf of the corporation all instruments requiring such execution
except to the extent the signing and execution thereof shall be expressly
designated by the Board of Directors to some other officer or agent of the
corporation.
SECTION 9. The VICE-PRESIDENT shall act under the direction of the President and
in the absence or disability of the President shall perform the duties and
exercise the powers of the President. They shall perform such other duties and
have such other powers as the President or the Board of Directors may from time
to time prescribe. The Board of Directors may designate one or more Executive
Vice-Presidents or may otherwise specify the order of seniority of the Vice
Presidents. The duties and powers of the President shall descend to the
Vice-Presidents in such specified order of seniority.
SECTION 10. The SECRETARY shall act under the direction of the President.
Subject to the direction of the President he shall attend all meetings of the
Board of Directors and all meetings of the stockholders and record the
proceedings. He shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the Board of Directors, and will perform
other such duties as may be prescribed by the President or the Board of
Directors.
SECTION 11. The ASSISTANT SECRETARIES shall act under the direction of the
President. In order of their seniority, unless otherwise determined by the
President or the Board of Directors, they shall, in the absence or disability of
the Secretary, perform the duties and exercise the powers of the Secretary. They
shall perform other such duties and have such other powers as the President or
the Board of Directors may from time to time prescribe.
SECTION 12. The TREASURER shall act under the direction of the President.
Subject to the direction of the President he shall have custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors. He shall
disburse the funds of the corporation as may be ordered by the President or the
Board of Directors, taking proper vouchers for such disbursements, and shall
render to the President and the Board of Directors, at it's regular meetings, or
when the Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the corporation.
SECTION 13. If required by the Board of Directors, he shall give the corporation
a bond in such sum and with such surety as shall be satisfactory to the Board of
Directors for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to
the corporation.
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SECTION 14. The ASSISTANT TREASURER in the order of their seniority, unless
other wise determined by the President or the Board of Directors, shall, in the
absence or disability of the Treasurer, perform the duties and exercise the
powers of the Treasurer. They shall perform such other duties and have such
other powers as the President or the Board of Directors may from time to time
prescribe.
ARTICLE 9
---------
Certificates of Stock
SECTION 1. Every stockholder shall be entitled to have a certificate signed by
the President or a Vice-President and the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary of the corporation, certifying the
number of shares owned by him in the corporation. If the corporation shall be
authorised to issue more than one class of stock or more than one series of any
class, the designations, preferences and relative, participating, optional or
other special rights of the various classes of stock or series thereof and the
qualifications, limitations or restrictions of such rights, shall be set forth
in full or summarised on the face or back of the certificate which the
corporation shall issue to represent such stock.
SECTION 2. If a certificate is signed (a) by a transfer agent other than the
corporation or it's employees or (b) by a registrar other than the corporation
or it's employees, the signatures of the officers of the corporation may be
facsimiles. In case any officer who has signed or whose facsimile signature has
been placed upon a certificate shall cease to be such officer before such
certificate is issued, such certificate may be issued with the same effect as
though the person had not ceased to be such officer. The seal of the
corporation, or a facsimile thereof, may, but need not be, affixed to
certificates of stock.
SECTION 3. The Board of Directors may direct a new certificate or certificates
to be issued in place of any certificate or certificates theretofore issued by
the corporation alleged to have been lost or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost or destroyed. When authorising such issue of a new certificate or
certificates, the Board of Directors may, in it's discretion and as a condition
precedent to the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and/or give the corporation a bond in such
sum as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost or
destroyed.
SECTION 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation, if it is satisfied that all provisions of the laws and
regulations applicable to the corporation regarding transfer and ownership of
shares have been complied with, to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon
it's books.
SECTION 5. The Board of Directors may fix in advance a date not exceeding sixty
(60) days nor less than ten (10) days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining the
consent of stockholders for any purpose, as a record date for the termination of
the stockholders entitled to notice of and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
give such consent, and in such case, such stockholders, and only such
stockholders as shall be stockholders of record on the date so fixed, shall be
entitled to notice of and to vote at such meeting, or any adjournment thereof,
or to receive such payment of dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation after
any such record date fixed as aforesaid.
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SECTION 6. The corporation shall be entitled to recognise the person registered
on it's books as the owner of shares to be the exclusive owner for all purposes
including voting and dividends, and the corporation shall not be bound to
recognise any equitable or other claim to or interest in such share or shares on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of Nevada.
ARTICLE 10
----------
General Provisions
SECTION 1. Dividends upon the capital stock of the corporation, subject to the
provisions of the Articles of Incorporation, if any, may be declared by the
Board of Directors at any regular or special meeting, pursuant to law. Dividends
may be paid in cash, in property or in shares of the capital stock, subject to
the provisions of the Articles of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out of any
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalising dividends or for
repairing or maintaining any property of the corporation or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
SECTION 3. All checks or demands for money and notes of the corporation shall be
signed by such officer or officers or such other person or persons as the Board
of Directors may from time to time designate.
SECTION 4. The fiscal year of the corporation shall be fixed by resolution of
the Board of Directors.
SECTION 5. The corporation may or may not have a corporate seal, as may be from
time to time be determined by resolution of the Board of Directors. If a
corporate seal is adopted, it shall have inscribed thereon the name of the
corporation and the words "Corporate Seal" and "Nevada". The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any manner
reproduced.
ARTICLE 11
----------
Indemnification
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or a
person of whom he is the legal representative is or was a director or officer of
the corporation or is or was serving at the request of the corporation or for
it's benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
General Corporation Law of the State of Nevada time to time against all
expenses, liability and loss (including attorney's fees, judgements, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. The expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
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corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. Such right of indemnification shall be a contract right which may
be enforced in any manner desired by such person. Such right of indemnification
shall not be exclusive of any other right which such directors, officers or
representatives may have or hereafter acquire and, without limiting the
generality of such statement, they shall be entitled to their respective rights
of indemnification under any bylaw, agreement, vote of stockholders, provision
of law or otherwise, as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as a
director or officer of another corporation, or as it's representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out of
such status, whether or not the corporation would have the power to indemnify
such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification and amend these and such Bylaws to provide at all
times the fullest indemnification permitted by the General Corporation Law of
the State of Nevada.
ARTICLE 12
----------
Amendments
SECTION 1. The Bylaws may be amended by a majority vote of all the stock issued
and outstanding and entitled to vote at any annual or special meeting of the
stockholders, provided notice of intention to amend shall have been contained in
the notice of the meeting.
SECTION 2. The Board of Directors by a majority vote of the whole Board at any
meeting may amend these Bylaws, including Bylaws adopted by the stockholders,
but the stockholders may from time to time specify particular provisions of the
Bylaws which shall not be amended by the Board of Directors.
APPROVED AND ADOPTED this March 25th, 1997.
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CERTIFICATE OF SECRETARY
I, Robert E. Lee, hereby certify that I am the Secretary of Apolo Gold
Inc., and the foregoing Bylaws, consisting of 9 pages, constitute the code of
Bylaws of Apolo Gold Inc., as duly adoped at a regular meeting of the Board of
Directors of the corporation held March 25th, 1997.
IN WITNESS WHEREOF, I have hereunto subscribed my name this March 25th, 1997.
/s/ Robert E. Lee
Secretary
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[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
The undersigned, Gustavo H. Villalobos, a Public Interpreter for the Republic of
Venezuela, as evidenced by an Official License issued unto him and published in
Official Gazette No. 34,300, dated September 1989, registered with the Main
Public Registry Office for the Federal District, Caracos, on August 23, 1989,
under #36, follo 140, letter "V", does hereby certify that the attached document
has been submitted to him for translation, and that the following is a true
English language version thereof:
Between "PROYECTOS MINEROS GOLDMA C.A.", a trading corporation, of this
domicile, duly registered before the Mercantile Register, Judicial District of
the Federal District and the State of Miranda, dated December 14, 1989, under
No. 6, Volume 80-A, First, herein represented by MOHAMAD YOUSSEF MERHI, a
Venezuelan, of legal age, of this domicile, bearer of identity card No.
11,735,431, on the one hand, and on the other, "COMPANIA MINERA APOLOGOLD C.A.",
of this domicile, duly registered before the Mercantile Register, Judicial
District of the Federal District and the State of Miranda, dated November 14,
1997, under No. 51, Volume 296-A-First, herein represented by its President,
MARTIAL H. LEVASSEUR, of Canadian Nationality, of legal age, of this domicile,
holder of Passport No. BC 046369, have decided to enter into, as we formally do,
a purchase- sale contract, upon condition, which shall be governed by the
regulations contained in these clauses.
FIRST: To better understand the terms contained in this contract, it has been
agreed between the parties that when "the Seller" is mentioned in this contract,
it shall be understood that we are meaning the trading corporation called
Proyectos Mineros Goldma C.A., the identification data of which have been
sufficiently stated; whenever
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[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
"The Representative of the Seller" is mentioned, it shall mean MOHAMAD YOUSSEF
MERHI, , already identified, whenever "The Purchaser" is mentioned, it shall
mean the trading corporation called COMPANIA MINERA APOLOGOLD C.A., the
identification data of which were already mentioned in detail; whenever "The
Representative of the Purchaser" is mentioned, this shall mean MARTIAL H.
LEVASSEUR, already identified; whenever "The Property" is mentioned, this shall
mean the alluvial diamond and gold mining concession called Codsa 13, the
subject to this contract, which shall be fully identified hereinafter, with all
the equipment, heavy machinery and camp pertaining to the concession; whenever
"The Company" is mentioned, this shall mean the trading corporation called
APOLOGOLD INC., registered before the Secretary of State of Nevada, United
States of America, dated March 18, 1997, also represented by Martial H.
Levasseur, in his capacity as President; whenever "the parties" are mentioned,
this shall mean "The Purchaser", "The Seller", "The Representative of the
Seller", "The Representative of the Purchaser" and "The Company", jointly, or,
two or more of them jointly, and whenever Dollar or Dollars are mentioned, this
shall mean the currency of legal tender of the United States of America.
SECOND: The purpose of this contract is to describe the conditions which must be
complied by "The Contracting Parties" to guarantee the final sale and transfer
of the ownership of "The Property", and to describe some basic operational
procedures.
THIRD: The Seller is the legitimate seller of all rights over a mining
concession for the exploitation of alluvial diamond and gold, called Codsa 13,
whose ownership, granted by the Ministry of Energy and Mines, dated August 27,
1992, was published in Official Gazette of the Republic of Venezuela No. 1159,
Special Edition, dated August 31, 1992, and authenticated before the Subordinate
Registry Office, Roscio District of the State of Bolivar, dated September 15,
1992, under No. 66, pages 37 to 44, overleaf of the First Protocol. The above
mentioned concession is located in the jurisdiction of Gran Sabana Autonomous
Municipality, State of Bolivar, and is comprised by five (5) lots of land
called: Codsa No 13-A to Codsa No. 13-E, which are sufficiently identified in
the referred title of the concession, its boundaries and measurements being
deemed as reproduced as an integral part of this document.
FOURTH: "The Representative of the Seller" guarantees to "The Purchaser" that it
has been sufficiently informed of all previous agreements and contracts which
might affect "The Property" and that "The Purchaser" knows the outstanding
agreements and/or contacts which might interfere with the culmination of this
contract.
FIFTH: The sales price agreed by the contracting parties to be received by "The
Seller" in order to complete the sale of "The Property", is three million five
hundred thousand dollars of the United States of America (US$ 3,500,000), which
sum, to the sole effects of fulfilling the provisions set forth in the Law of
the Central Bank of Venezuela, at the current exchange rate of five hundred
ninety six bolivars per dollar, reaches a total of tow billion eighty six
million Bolivars (Bs. 2,086,000,000).
SIXTH: The agreed sales prices shall be paid entirely by "The Purchaser" to "The
Representative of the Seller", within a period of not more than three years,
which term shall begin from the date of the signing of this contract before a
Notary Public.
SEVENTH: On the 30th day of May, 1999, or the latest within the term of 15
working days following the date of authentication of this contract, "The
Purchaser" shall deliver to the Seller a down payment of fifty thousand dollars
(US$ 50,000), which amount shall, to the sole effects of complying with the Law
of the Central Bank of Venezuela, at the current exchange rate of five hundred
ninety six bolivars per 1 US dollar (Bs. 29,800,000). This payment shall be part
of the total purchase price of The Property.
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
EIGHTH: On November 15, 1999, "The Purchaser" shall pay to "the Seller", a
second amount of money, of at least fifty thousand dollars (US$ 50,000), which
amount shall, to the sole effects of complying with the Law of the Central Bank
of Venezuela, at the current exchange rate of five hundred ninety six bolivars
per each dollar (Bs. 596 x US$), reaches the amount of twenty none millions
eight hundred thousand bolivars (Bs. 29,800,000). This payment shall be part of
the total purchase price of the Property.
NINTH: The Purchaser undertakes to establish at least one new mining operations
in The Property, with a minimum production average of 1,000 cubic meters per
day. Except for the occurrence of any unpredictable natural circumstances, this
minimum production must be reached within a term of eight (8) months following
the date of authentication of this contract, but under any circumstance, the
referred average must be reached within the year following the date of
authentication of this contract.
TENTH: After beginning the mining operations referred to in the ninth clause to
this contract, The Purchaser shall begin to pay to The Seller a monthly
installment equivalent to an estimate of thirty percent (30%) of the net profit
which might be obtained by The Purchaser in the referred mining operations. The
Purchaser guarantees that such estimate shall not in any case be less than
twenty percent (20%) of the monthly gross profit obtained by the Purchaser in
the mining operations performed in The Property.
ELEVENTH: Out of the monthly payments to be made and referred to in the above
clause, fifty percent (50%) shall be credited to the total price agreed by The
Property, and the remaining fifty percent (50%) shall be received by The Seller
as rental payment, operational and technical assistance, use and wear of
equipment. The last payment shall be carried out until total payment of The
Property is made.
TWELFTH: The Purchaser guarantees that after one year of the date of
authentication of this contract, the minimum amount to be received by
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
The Seller as payment for rent, technical and operational assistance, use and
wear of equipment and deposit to the account of the Loral price of The Property,
shall be at least ten thousand dollars (US$ 10,000) per month, which amount, to
the sole effects of complying with the law of Central Bank of Venezuela, at the
current exchange rate of five hundred ninety six bolivars per 1 US dollar
(Bs.596/US$), reaches the amount of five million nine hundred sixty thousand
bolivars (Bs. 5,960,000), which amount shall be paid by The Purchaser to The
Seller until the amount to be paid by The Purchaser to The Seller by virtue of
the mining production referred to in the ninth clause of this contract reaches
the minimum amount of ten thousand dollars (US$ 10,000) per month. This amount
shall be applied as provided for in the tenth and eleventh clause of this
contract.
THIRTEENTH: Except for any other agreement between the parties, the currency to
be used to the effects of calculation in this contract, shall be the Dollar of
the United States of America. The Seller reserves the right to receive payments
from The Purchaser under any of the following forms or combinations thereof:
gold, diamond, calculated at the market price used in the area, dollars in cash
and shares of the public company, always at its choice.
FOURTEENTH: Currently, mining operations in The Property are made by the
representative of The Seller, Dominic Aleong, or for any replacement that The
Seller shall appoint, these operations shall be permitted to continue in an
independent fashion, in the current place where it works, under the same
operational conditions and payment obligations to The Seller existing as of the
date of authentication of this contract. The amounts received by The Seller by
virtue of this operations shall in no respect be considered as a partial payment
of the obligations assumed in this contract by The Purchaser.
FIFTEENTH: The Representative of The Purchaser shall be entitled to negotiate
additional terms with The Seller and Dominic Aleong, or any replacement
appointed by The Seller to update the equipment used in
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
the operations stated in the above clause, and to modify the operation and
payment terms between the Seller, Dominic Aleong or any replacement appointed by
The Seller, and to share the use of any equipment currently used in The
Property, repaired or its repair being paid by The Purchaser.
SIXTEENTH: Until the total transfer of the ownership of the Property is carried
out, or until established otherwise in this contract, both parties shall be
entitled to remove and collect any types and quantities of samples within the
are of the Property, at any time, without this impairing in any manner the work
that is being carried out in the Property.
SEVENTEENTH: The Purchaser shall freely permit the Seller to be present in all
operations of recovery, weighing and measurement of diamonds or gold, conducted
by The Purchaser, and shall mutually agree a method to ensure any of the
recovered materials. Likewise, The Seller and the Purchaser shall jointly
develop an acceptable method to evaluate the diamonds and gold recovered in any
of the mining operations conducted The Purchaser in The Property.
EIGHTEENTH: The Purchaser accepts all risks and obligations that the development
of the mining activity entails, and shall be responsible for all costs, expenses
and any taxes related to the mining production, which at the same time are
related to any of the operations conducted and controlled by The Purchaser in
The Property, from the date of authentication of this contract.
NINETEENTH: The Purchaser shall provide from time to time to The Seller all
information necessary for the making of reports that are required, shall comply
with obligations accepted by the Seller in the mining title of The Property, and
shall respect and cause to be respected by its employees and representatives,
the entirely of the legal provisions towards the conservation and preservation
of the environment, established in any Venezuelan laws, all this in order to
protect the rights of the Property.
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
TWENTIETH: The Seller shall be responsible for the prompt presentation of each
and all of the reports that may be needed to make, of the settlement of surface
taxes incidental to the Property, and to make all necessary to keep effective
the rights over the Property, as well as to supply immediately to the Purchaser
all copies of the documents made by The Seller in order to maintain the
Property. In the event The Seller fails to comply with the obligations to
promptly fill out any official reports or to promptly pay any of the fees or
taxes needed to maintain the Property in force, the purchaser is authorized to
comply with these obligations, being able to resort to any professionals
specialized in Venezuela, if necessary, to comply with this object. In the event
of any conflict between the Parties on the prompt compliance with the
obligations assumed by The Seller, professionals may be contracted to decide on
such situation, and the Parties must accept the information that these
professionals furnish them, which solution shall be final.
TWENTY FIRST: In the event the seller fails to promptly submit the official
reports, or to pay taxes, both referred and necessary to keep in order the
Property, this clause authorizes the Purchaser to do so, and to discount all
expenses incurred in from the total price of the Property. Likewise, if the
Seller fails to make any actions to keep in order The Property, this clause
shall permit and authorize the Purchaser to represent the Seller before any
proper Government Offices, in respect to the Property, operations in the
property or similar affairs.
TWENTY SECOND: The failure by the Purchaser to promptly comply with any of the
obligations assumed in this Contract, shall void the same. It has been agreed
between the parties that the Purchaser may use a maximum term of sixty (60)
continuous days to get up to date as to its possible delay in the fulfillment,
except in the event of the fulfillment of obligations which, if not executed,
might jeopardy the ownership of the property. In the event the Contract is
fulfilled, the
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
Purchaser shall loose, for the benefit of the Seller, all payments made pursuant
to this contract, not being entitled to demand compensation for any improvements
made in the Property.
TWENTY THIRD: In the event this contract is declared void, the Purchaser may,
with the approval by the Seller, enter into an option or arrangement to remove
from the Property any recovery or mining equipment used by the Purchaser in the
Property in mining tasks performed by it.
TWENTY FOURTH: In the event the Purchaser fails to comply with the obligations
imposed by this contract, and therefore is declared void, the Purchaser shall be
bound to be liable for any cost of environmental recovery or debts related to
its operations in the Property, as ordered by any Office of the Venezuelan
Government, during the following three (3) years after the date of termination
thereof. This obligation shall not include specifically any of the costs related
tot he mining operations or others performed in the present or previously in the
Property.
TWENTY FIFTH: The Purchaser may assign all the rights and obligations acquired
by it in this contract, to the Company. The Company shall become a warrantor of
the obligations assumed by the Purchaser in this contract.
TWENTY SIXTH: Until the Purchaser completes the purchaser the Property
established in this contract, the Seller reserves the right to propose the
justified removal of any employees of the Purchaser who are inconvenient for the
success of the operations and effectiveness of the Property.
TWENTY SEVENTH: The Seller, through he persons designated by it, shall have free
and unrestricted access at any time, to any area of the Property, and to any
operations performed thereat. The Seller shall also be entitled to notify the
Purchaser in wiring of any infringements or procedures deemed as not permitted
by the Venezuelan Laws.
In any case, the Seller shall express in writing which Law or
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
Laws are though as being breached and/or which procedures and practices of the
Purchaser are questionable.
TWENTY EIGHTH: The seller shall guarantee to the Purchaser the preferred right
to exercise the same within the sixty (60) days following its notice, to equal
or improve any offer made to The Seller to any third party, in respect to the
mining rights held in the other mining concessions that the seller has or that
the Seller may have in the future in Venezuela.
TWENTY NINTH: In the event of a disagreement between the Seller and the
Purchaser,. And that such disagreement is not settles by agreement between the
Parties or referred to any of the terms and clauses to this Contract, or in
respect to any of the operations in the Property, the Parties agree to take the
issue first in an arbitration procedure in order to achieve the suitable
solutions, as provided for and described in this contract. If any of the Parties
begins any legal procedure thought the Courts without resorting first to the
Arbitration procedure, it shall be responsible for the legal costs of both
parties ain any of these procedures.
THIRTIETH: The Purchaser accepts to pay to The Representative of the Seller, two
and a half percent (2.5%) of the net annual profit obtained by The Purchaser,
while related to the Property.
THIRTY FIRST: The Representative of the Purchaser undertakes to sell to the
Representative of the Seller, fifty thousand (50,000) shares of the capital
stock of the Company at a price of one cent of a Dollar (US$ 0.01), that is,
five hundred dollars (US$ 500) as a whole. The sale of such shares shall be
carried out withing the three (3) months following the date of the signing of
this contract.
THIRTY SECOND: the Seller shall grant authority to the Purchaser to represent it
before any government entities in order to see for the Property to be in perfect
order. This authority shall finish at the time the contract finishes for any
reason or is void.
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<PAGE>
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
THIRTY THIRD: Neither the Purchaser nor the Seller may assign or dispose in any
manner of the rights granted to them herein; likewise, they may not sublease or
contract with third parties for any type of operations in The Property, without
the express consent by the other party.
THIRTY FOURTH: The city of Caracas, Federal District is hereby chosen as special
domicile, to all effects of this contract, its causes and consequences, and the
Parties declare to submit to the jurisdiction of the Courts thereof.
THIRTY FIFTH: This contract contains all provisions agreed by the contracting
Parties; therefore, any others that amend, repeal or extend the same, must be
agreed by the same parties in writing. All not expressly provided for in this
document shall be governed by the provisions contained in the Law of Mines and
its Regulation, Civil Code or Special Laws regulating such matter.
In Caracas, on the date of execution thereof.
The foregoing translation is hereby certified correct, IN WITNESS WHEREOF I have
hereunto set my hand and affixed my official seal, in the city of Caracas,
Republic of Venezuela, on this sixteenth (16th) day of the month of May of the
year nineteen hundred ninety nine (1999).
/s/ Gustavo H. Villalobos
- -------------------------
Gustavo H. Villalobos
Lic. Public Interpreter
[[ Stamp of GUSTAVO VILLALOBOS, INTERPRETE PUBLICO, Caracos, Venezuela ]]
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<PAGE>
AGREEMENT BETWEEN
APOLOGOLD CA. (a Venezuelan Company)
AND
APOLO GOLD INC. (a Nevada Corporation)
With reference to the registered agreement (Document #1) between
APOLOGOLD C.A. and GOLDMA C.A., dated November 14, 1997, and the acquisition
of the Venezuelan concessions known as CODSA 13(5 lots registered as CODSA
13A, 13B, 13C, 13D, and 13E) and persuant to the Articles and Clauses
contained therein and duly signed by the parties to that Agreement. Also,
persuant to the Agreement dated November 17, 1997, (Document #2) the share
interest in and the control of APOLOGOLD C.A. is held in trust by MARTIAL M.
LEVASSEUR for the benefit of APOLO GOLD INC.
The Agreement between APOLOGOLD C.A. and GOLDMA C.A. (Document #1) covers the
following points which will be undertaken by APOLO GOLD INC. as the holding
Company:
Duration of Purchase: 3 years from date of signing
Purchase Price: US $3,500,000
Terms: (a) US $50,000 paid by June 9, 1999
(b) US $50,000 to be paid by November 15, 1999
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<PAGE>
(c) A 20% Royalty from net production
(i) 10% to be paid toward paying down the US$3,500,000
total purchase price.
(ii) 10% paid to GOLDMA C.A., Mohammed Youseff Merhi the
Seller, as rental payment, operational and technical
assistance.
(d) 2.5% of net production profit until full payment of the
Purchase price of US$3,500,000 is achieved
(e) 50,000 shares of the common stock of APOLO GOLD INC. to be
issued at a cost of US$O.01 to Mohammed Youssef Merhi of
GOLDMA C.A.
APOLO GOLD INC. will be the Operator of the project and any other projects
related to or as a result of opportunities in the parties area of influence in
Venezuela and the Americas, and will have all the rights and control of
APOLOGOLD C.A. as stated previously above.
A FINDERS FEE is payable of 3,500,000 shares of APOLO GOLD INC, issued at
the price of US$0.01 and also 7.5% net production profit from the project to:
AML DIAMOND AND GOLD EXP.INC.
This Agreement is subject to all the provisions agreed to by the original
contracting parties and they, the Seller and the Purchaser, have agreed to the
assignment of all the rights and control of APOLOGOLD C.A. to APOLO GOLD INC.
In Vancouver, B.C., Canada, signed on behalf of APOLOGOLD C.A. and APOLO
GOLD INC. by MARIIAL H. LEVASSEEUR, President.
Dated this 20th day of May, 1999
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<PAGE>
/s/ Martial M. Levasseur /s/ Robert E. Lee
APOLOGOLD C.A. WITNESS
PRESIDENT
/s/ Martial M. Levasseur /s/ Robert E. Lee
APOLO GOLD INC. WITNESS
PRESIDENT
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<PAGE>
November 30, 1997
MARITAL H. LEVASSEUR, President and holder of 999 shares (99.9%) of the 1,000
shares of APOLOGOLD C.A., a Venezuelan incorporated Company, hereby confirms
that the shares are held in trust only. The beneficial owner and therefore
holding full control of APOLOGOLD C.A. is APOLO GOLD INC., a Company
incorporated in the State Of Nevada, U.S.A., and located at 1458 - 409
Granville Street, Vancouver, B.C., Canada, V6C 1T2.
/s/ Martial H. Levasseur /s/ Robert E. Lee
PRESIDENT WITNESS
APOLOGOLD C.A.
/s/ Martial H. Levasseur /s/ Robert E. Lee
PRESIDENT WITNESS
APOLO GOLD INC.
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<PAGE>
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