The following Interim Management Discussion and Analysis (“MD&A”) of Oro Gold Resources Ltd.
(“Oro Gold” or the “Company”) has been prepared as of April 28, 2010 and is intended to be read in
conjunction with the Company’s unaudited consolidated financial statements for the three months
ended February 28, 2010 together with the notes thereto and the Company’s audited Consolidated
Financial Statements and Notes for the years ended November 30, 2009 and 2008.
The interim financial statements for the three months ended February 28, 2010 have been prepared
by management in accordance with Canadian generally accepted accounting principles. The MD&A
has not been reviewed by the Company’s auditors. This MD&A constitutes an update to the November
30, 2009 Annual MD&A.
Throughout this report we refer to “Oro Gold”, the “Company”, “we”, and “us”, “our” or “its”. All these terms
are used in respect of Oro Gold Resources Ltd. Additional information relating to the Company is
available on the SEDAR website at www.sedar.com. All the financial information in this MD&A and all
dollar amounts in the tables, including comparatives, are expressed in Canadian dollars, unless
otherwise noted.
Cautionary Statement on Forward-Looking Information
This MD&A is based on a review of the Company’s operations, financial position and plans for the future
based on facts and circumstances as of April 28, 2010. Except for historical information or statements of
fact relating to the Company, this document contains assumptions, estimates, and other forward-looking
statements regarding future events. Such forward-looking statements involve inherent risks and
uncertainties and are subject to factors, many of which are beyond the Company’s control that may
cause actual results or performance to differ materially from those currently anticipated in such
statements. Important factors that could cause actual results to differ materially from those expressed
or implied by such forward-looking statements, include among others, metal price volatility, economic
and political events affecting metal supply and demand, fluctuations in ore grade, tonnes of ore milled,
geological, technical, and mining or processing problems. Readers are cautioned not to put undue
reliance on these forward-looking statements.
BUSINESS DESCRIPTION
Oro Gold is an exploration stage company involved in the acquisition and exploration of mineral properties
in Mexico and Central America. The Company does not have any producing mineral properties at this time.
The Company directly and indirectly holds several mining concessions in Mexico. The level of exploration
operations has been determined by the availability of capital resources. To date, equity financing,
consisting of the Initial Public Offering, private placements, and subsequent warrants and options exercises
have provided the main source of funding. The Company is a reporting issuer in British Columbia, Alberta
and Ontario. Commencing April 18, 2005, the Company began trading on the TSX Venture Exchange
under the symbol “OGR”.
Oro Gold has various properties located in Mexico and generative properties located in Panama. The
district-scale Trinidad property continues to be the Company’s top priority project and the main focus of
exploration and resource definition efforts. Ongoing generative activity and a joint venture strategy will
continue to be a fundamental part of Oro Gold’s growth. The Company’s mission is to build shareholder
value by making discoveries and developing low-cost gold resources through early and advanced stage
exploration.
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 2
HIGHLIGHTS
Property Agreements and Exploration
? Diamond drill hole 44 intersected 5.6 g/t gold over 15.6 metres, including 12.3 g/t gold over 6.6
metres. This new drill intercept is interpreted to be an extension of the HS zone, increasing the
strike length of the high-grade gold (oxide) zone by an additional 100 metres to the south and
closer to surface. Hole 44 also intersected a lower gold-bearing breccia zone which returned 0.3 g/t
gold over 20 metres. This intersection is considered to be significant since this level of a gold
anomaly in breccia material is often peripheral to higher grade zones. This is the deepest gold
anomaly discovered to date, and indicates excellent potential for additional oxide zones at depth
(Press release April 28, 2010).
? Oro Gold increased size of high grade zone at Trinidad by intersecting 40.9 metres of 11.9 g/t gold
and 16.5 metres of 27.7 g/t gold and confirmed a significant increase in size and geologic continuity
of the gold zone over a distance of 500 metres, connecting two zones which were previously
modelled separately, the HS zone and the Taunus South zone (Press release March 3, 2010).
? Preliminary metallurgical test work completed on core samples taken from the HS zone of the
Trinidad gold resource indicates the high grade oxide material is readily amenable to
milling/cyanidation treatment with gold recovery ranging from 94% to 97% (press release March 22,
2010).
? The Company obtained title for two properties: Tigra Negra and El Salto, both in the States of
Sinaloa and Nayarit, in Mexico. Both properties are adjoining the Company’s Trinidad property.
With these property additions Oro Gold has consolidated a strategic, contiguous property position
along a northwest-trending structural corridor, which has the potential to host significant new gold
discoveries. The total land package now exceeds 2,500 square kilometres, and is wholly-owned by
the company.
Financing and Corporate:
? On April 1, 2010 the Board of Directors appointed Priscila Costa Lima as Chief Financial Officer
and Peter Kendrick as VP Corporate Development of the Company.
RESULTS OF OPERATIONS
Summary of Financial and Operational Results
For the three months period ended February 28, 2010, the Company incurred a net loss of $2,250,846 or
$0.04 per share compared to a net loss of $480,218, a loss of $0.02 per share in 2009. These results
include interest income and other income of $29,911 (2009 - $3,568) and foreign exchange loss of $43,446
(2009 - $24,583).
The table below presents the major expenses incurred in the first quarters of 2010 and 2009, and the
variance between the years.
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 3
Operating and Administrative Expenses
2010 2009 Variance % Change
Accounting and legal 6 ,353 26,456 ( 20,103) -76%
Exploration expenses (Schedule 1) 1 ,182,114 224,844 9 57,270 426%
Investor relations 6 9,789 4,735 6 5,054 1374%
Management and consulting fees 6 9,070 51,821 1 7,249 33%
Office and general 2 2,024 18,607 3 ,417 18%
Rent 2 0,265 13,786 6 ,479 47%
Communications 7 ,041 2,895 4 ,146 143%
Salaries 1 20,761 92,137 2 8,624 31%
Stock based compensation 7 05,120 - 705,120 100%
Transfer agent fees and regulatory fees 2 ,870 2,410 4 60 19%
Travel and promotion 1 7,108 7,885 9 ,223 117%
Foreign exchange loss 4 3,446 24,583 1 8,863 77%
Interest and other income ( 29,911) (3,568) ( 26,343) 738%
Loss on disposal of equipment ( 202) 2,578 ( 2,780) -108%
Exploration costs relate to generative and project exploration costs in Mexico and Panama and are higher
due to an increase in drilling, assaying and other activities in the properties in the Rosario Gold Belt in
Sinaloa, Mexico during the first fiscal quarter of 2010 compared to the first quarter of 2009.
Investor relations, communications, and travel and promotion increased due to increased levels of the
Company’s activities in the current quarter.
Accounting and legal decreased in the first quarter of 2010 compared to the first quarter of 2009 due
accounting staff becoming full time employees of the Company, while salaries and wages increased for the
same reason.
Stock based compensation increased due to stock options granted during the first quarter of 2010
compared to no grant during the first quarter of 2009.
Foreign exchange losses primarily resulted from the appreciation of the Canadian dollar against the US
dollar and Mexican Peso during 2010.
Summary of Quarterly Results
The following table summarizes selected financial data reported by the Company for the last eight quarters.
The losses and loss per share amounts for the quarters prior to November 30,2008 have been restated to
reflect the change in accounting policy related to exploration costs, as previously described.
(Restated) (Restated)
For the quarters ended: Feb.28, Nov.30, Aug.31, May.31, Feb.28, Nov.30, Aug.31, May.31,
2010 2009 2009 2009 2009 2008 2008 2008
$ $ $ $ $ $ $ $
Interest and other income (29,911) (41,549) (2,733) (4,529) (3,568) (566) (2,643) (9,910)
Loss 2,250,846 2,022,085 1,494,817 1,120,658 480,218 1,366,124 1,375,773 872,555
Net loss per common share, basic
and diluted 0.04 0.03 0.03 0.03 0.02 0.05 0.06 0.04
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 4
For the three month period ended February 28, 2010 (“2010 Q1”), the Company reported a
consolidated loss of $2,250,846 or $0.04 per share as compared with the corresponding period in the
prior year (“2009 Q1”) of $480,218, a loss of $0.02 per share.
Operating expenses for the three months ended February 28, 2010 totalled $2,237,513 (2009 Q1 -
$456,625). Significant expenses for this 3 month period are as follows:
? Exploration expenses totalled 1,182,114 (2009 Q1 - $224,844). Exploration costs relate to
generative exploration in Mexico, Panama and other areas of Latin-America, as well as project
exploration costs.
? Salary expenses totalled $120,761 (2009 Q1 - $92,137). This increase is due to an increase in the
number of employees including the hiring of an Accountant, Resources Evaluation Manager, IR
Manager and Corporate Secretary.
? Foreign exchange loss totalling $43,446 (2009 Q1 - $24,583). The increased loss relates to the
appreciation of the Canadian dollar relative to the US dollar and Mexican peso during the period.
? Investor relations expenses, which include costs of investor information dissemination, investment
shows and consulting expenses for marketing and strategy were $69,789, compared to those in
2009 Q1 at $4,735. This is due to increased investor relations and marketing initiative activities for
the period and the contracting of IR consulting personnel.
Stock-based Compensation
During the three months ended February 28, 2010 the Company granted incentive stock options for the
purchase of up to 2,080,000 common shares at a price of $0.44 per share to the Company’s officers,
directors, employees and consultants.
The Company uses the fair value method of accounting for all stock-based payments to employees,
directors and officers. Under this method, stock based compensation expense of $705,120 was recorded
by the Company with a corresponding increase in contributed surplus. The fair value of the stock options
granted at the date of the grant using the Black-Scholes pricing model assume risk-free interest rate of
2.46%, no dividend yield, expected life of 5 years and an expected price volatility of 104.18%.
Subsequent to the period end the company granted incentive stock options for the purchase of up to
100,000 common shares at a price of $0.62 per share to the newly appointed Chief Financial Officer.
PROPERTIES SUMMARY
Trinidad Property, México
The 651 km2 Trinidad property was originally staked by Oro Gold and is located in an area of good
infrastructure, 90 kilometres east of Mazatlan. The Company received the Trinidad’s exploration title in
2007. The property includes the former Taunus open-pit gold mine, previously owned by Eldorado Gold
Corporation and in production from 1996 to 1998. The expected mine life was 4 years; however, the mine
was shut down in 1998 due to low gold price. The Company obtained feasibility study data for the pastproducing
mine located on the property and completed its resource estimate using the historical drill data as
well as surface work completed by Oro Gold. This resource estimate indicated that 1,624,000 tonnes
grading 1.76 g/t for a total of 91,915 ounces of gold remained in the Taunus Pit and Colinas areas. The
resource estimate was later increased by 119% to 200,930 ounces of gold representing 4,491,800 tonnes
at 1.39 g/t gold at a 0.5 g/t gold cut-off (press releases dated May 29, 2008 and July 2, 2008).
The core drilling program that commenced in April 2009, defined and expanded the new high-grade breccia
zone discovered by Oro Gold. The results of this drill program exceeded expectations with demonstration
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 5
of a much higher grade in core than in RC drill holes with intercepts such as 5.3 g/t gold over 65.9 metres in
09TR015, 5.2 g/t gold over 36.5 metres in 09TR016, 5.3 g/t gold over 65.9 metres in 09TR019 or 8.6 g/t
gold over 20.9 metres in 09TR022 as well as the expansion of the high-grade zone that is now known over
350m strike length (press releases: May-20-09 Hole 15; May-26-09 hole 16/17A; Jun-11-09 Holes 18-20;
and Jul-16-09 holes 21-22). These drill results demonstrated the significant upside potential at the Trinidad
project and the entire district andOro Gold continued core drilling with the objective of updating the resource
estimate during the first half of 2010 depending on geologic conditions and drilling success.
In July 2009, the Company launched an Induced Polarization (IP) / Magnetometer / Electro Magnetic (EM)
geophysical test in order to identify the geophysical signature of the mineralized breccia zone. The test was
judged positive as it gave indications on the geology of the Taunus area. The full survey was then carried
out from the north of Bocas to the south of Colinas.
During July 2009 to October 2009 the Company continued drilling in the Taunus area, initially with one drillrig,
with two since August and three since October, while the exploration team reinterpreted the high-quality
geological information gathered in the first phase of the drill program. The first rig was devoted to resource
definition at the inferred category level. The second rig initially drilled several definition holes and it later
drilled exploration holes within 1km of the Taunus area. The third rig tested developing gold targets and
was intended to accelerate step-out drilling with the objectives of: 1) expanding high-grade gold zones at
the Taunus, Bocas and Colinas targets, and 2) testing new gold targets identified nearby.
In November 2009 the Company reported the continuation of drilling and announced that the emphasis of
the drill program was to expand the new high-grade gold discovery area (HS zone) at Taunus; target
potential new zones within 2 kilometres of Taunus; and make a new discovery in the Trinidad district
outside of Taunus.
In December 2009, the Company reported the extension of the high-grade HS zone and that results from
the property’s Taunus South, Bocas Shallow, and the new Eldorado South zones showed potential to add
resource gold ounces. As well, drilling suggested further mineralization potential at depth. (Press release
dated December 10, 2009).
To January 2010, Oro Gold had completed approximately 8,500 metres in 39 diamond drill holes at Trinidad
and the drilling had defined several significant gold-bearing zones at Taunus including the HS, Taunus
South and Eldorado South zones. (Press release dated January 27, 2010). Further, the results from hole
34A confirmed high-grade gold in the HS zone and indicated potential at depth. This hole was drilled in
order to collect a representative sample of the HS zone for metallurgical analysis and to test for deeper gold
potential below the HS zone. The diamond drill hole intersected 34.5 metres of 8.7 g/t gold. This interval
included 5.0 metres of 23.9 g/t gold (or 10 metres of 16.0 g/t gold). These internal composites represented
some of the highest gold values reported to date and occurred in an interval with good core recovery
(>90%). The hole penetrated over 40 metres of conglomerate below the HS zone and then intersected a
pyritic lithic tuff.
Recent Developments
On March 31, 2010 the Company announced the commencement of drilling on the San Cristobal area, a
recently discovered area located 12km southeast of the Taunus target, near Mazatalan. This first phase drill
program at San Cristobal is part of a larger exploration program at Trinidad, which is focused on the Taunus
target where a 10,000 metre drilling program is underway. The Company plans to complete an approximate
1,200-metre reverse circulation (RC) drill program to test an extensive 3,000m by 500m anomaly defined by
soil, trench sampling, and geological mapping (see attached map at end of press release). The anomaly is
open in several directions and the current work program is defining additional gold-bearing zones on the
adjoining Oro Gold concessions located to the east within the northwest-southeast regional trend.
On March 3, 2010 the Company reported significant drilling results on its Trinidad property. Diamond drill
hole 41 intersected 11.9 g/t gold over 40.9 metres, including 27.7 g/t gold over 16.5 metres. These results
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 6
confirm a significant increase in size and geologic continuity of the gold zone over a distance of 500 metres,
connecting two zones which were previously modeled separately, the HS zone and the Taunus South zone.
On April 28, 2010 the Company reported Diamond drill hole 44 which intersected 5.6 g/t gold over 15.6
metres, including 12.3 g/t gold over 6.6 metres. This new drill intercept is interpreted to be an extension of
the HS zone, increasing the strike length of the high-grade gold (oxide) zone by an additional 100 metres to
the south and closer to surface. The HS zone has now been extended by approximately 500 metres in
length and will continue to be drill-tested to the south (the HS zone and Taunus South zone are now being
interpreted as one larger continuous zone). Hole 44 also intersected a lower gold-bearing breccia zone
which returned 0.3 g/t gold over 20 metres. This intersection is considered to be significant since this level
of a gold anomaly in breccia material is often peripheral to higher grade zones. This is the deepest gold
anomaly discovered to date, and indicates excellent potential for additional oxide zones at depth.
Diamond drill hole 45 is currently ongoing, located 60 metres to the south of Hole 44, to further extend the
high-grade gold zones.
Additional information on the drill results, the location of the drill holes and the targeted zones can be
viewed on our website at www.orogoldresources.com.
Outstanding Drill Results at Trinidad
The 2009 and 2010 drill program produced a number of high-grade intervals, including:
Hole # Results
(grams/tonne gold)
Over a length of
(metres)
08TR012 8.5 g/t 61.1m
08TR013 5.3 g/t
including 15.8 g/t
24.0m
7.3m
08TR014 9.7 g/t 7.0m
09TR015 5.3 g/t 66.0m
09TR016 3.4 g/t
5.2 g/t
60.6m
36.5m
09TR019 6.3 g/t 30.0m
09TR020 5.3 g/t
4.1 g/t
13.4m
13.0m
09TR022 8.6 g/t 20.9m
09TR023 3.8 g/t 5.8m
09TR025 3.6 g/t 81.8m
09TR027 5.2 g/t 18.7m
09TR032 3.0 g/t
1.1 g/t
9.0m
32.0m
09TR034a 8.7 g/t 34.5m
09TR038 1.6 g/t 12.8m
09TR041 11.9 g/t 40.9m
10TR044 5.6 g/t
including 12.3 g/t
15.6m
6.6m
El Habal Property, Mexico
As part of the El Habal package, Oro Gold acquired a 100% interest in the 80 hectare San Pablo property
located approximately 10 km east of the past-producing Rosario gold-silver mine in Sinaloa, Mexico in May
2008. Oro Gold has been consolidating a property position surrounding the San Pablo concession over the
last two years. A total of five concessions have been acquired, two through the Mexican government lottery
process, and three by staking open ground. The acquisition of San Pablo completes the consolidation of a
3,765 hectare El Habal land package which gives Oro Gold a 100% interest in another prospective area
within the Rosario gold belt.
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 7
The El Habal property has had a long history of exploration and development dating back to the 1930’s.
Most recently, in 1999, MK Gold Company entered into a joint venture agreement with the previous owner,
Cominco, and drilled seven reverse circulation (RC) holes of which one intersected 1.3 g/t gold over 261m
in historic hole EH-5. The mineralized interval occurred at 40 metres below surface and continued to the
end of the hole and was described as quartz stockwork veining in altered volcanics. These drilling results
are non compliant with National Instrument (“NI”) 43-101 as they were completed prior to the
implementation of NI 43-101. However, the results are considered to be indicative of a potential
mineralized system at El Habal. Oro Gold is currently in the process of obtaining the drill data.
A number of historic workings have been identified on the property. Three underground workings were
developed on pipe-shaped silicified zones ranging in size from 500 to 1,200 square metres. The zones are
aligned in a northeast direction and are described as being zones of structural intersections. The sampling
completed by the Mexican Council of Mineral Resources in 1985 indicates grades ranging from 1 to 14 g/t
gold. Given the historic indications of mineralized intervals and the observed stratigraphic controls of
alteration, Oro Gold considers the El Habal property to have excellent potential to host a bulk tonnage, near
surface gold deposit.
During fiscal year 2009, the Company completed the mapping and sampling program initiated in October
2008. Best results included 34.8g/t gold over 1.5m including 3.0g/t gold over 4.4m. A short drill program
consisting of 5 diamond drill holes was completed with the objective of testing the historical results. In
February 2010 the Company gained access to a complete data set of work completed by previous
operators. A review of the data set indicates that the Company has not drill tested historic hole EH-5 which
reported 1.3 g/t gold over 261m. A detailed review of the drill log indicates potential down-hole
contamination since the hole drilled through historic underground workings.
Cimarron Property, Mexico
On April 28, 2008, Oro Gold completed the earn-in of 100% of the Cimarron property by making a one-time
payment of $250,000 plus Mexican value added tax to the underlying vendor. The underlying vendor
retains a sliding scale NSR based on the price of gold.
On November 30, 2007 the Company entered into formal agreements (“Formal Agreements”) with Mazorro
Resources Inc. (“Mazorro”) to option out the Cimarron Property. In June 2008, Oro Gold and Mazorro
commenced the first phase of a RC drill program which consisted of 2,400 metres of drilling and was
designed to target the kilometer-scale gold anomaly at the Calerita prospect, as well as drill-test anomalies
identified from the soil geochemical and magnetic surveys covering 326 line-kilometres The results of the
drilling confirmed the presence of a significant outcropping gold-bearing zone (see press release dated
September 4, 2008 for drilling highlights). Based on these results, two diamond holes were drilled
confirming the previous RC drilling results and providing additional geological data to aid in interpreting the
RC results.
The results of the first phase of drilling were very encouraging. The drilling at Calerita expanded the known
gold mineralization at depth. The dimensions of the zone are now at least 350 metres by 250 metres at
surface and to a depth of approximately 100 metres. The good infrastructure of the property in terms of road
access, proximity to power, and location near an international port makes the project economics potentially
very attractive if we continue to discover and define a gold resource.
During fiscal 2009, the Company and Mazorro were unable to re-negotiate the payment terms that were
defaulted by Mazorro. As a result, in accordance with the Formal Agreements, in October 21, 2009 the
Company delivered to Mazorro a formal notice of termination of the agreement, and Oro Gold plans to
advance the property on its own in 2010.
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 8
Tigra Negra, Mexico
On June 10, 2009 the Company announced it had staked the 579 square kilometre (57,900 Hectare)
concession Tigra Negra, in the state of Nayarit, Mexico. The land position encompasses two concessions
with historic gold mining areas, Las Cucharas and El Tigre, held by Mexican mining companies.
Government geochemical data indicates broad gold anomalies in stream sediments. The new property is
located approximately 20 kilometres to the southeast of the Trinidad project where Oro Gold is currently
drilling a new high-grade discovery and defining a gold resource. The 100%-owned property was acquired
based on government geochemical data showing highly anomalous gold (up to 985 ppb gold) over a large
area in stream sediments, and the existence of historic gold workings.
El Salto, Mexico
The Company staked the 426 square kilometre (42,650 Hectare) concession El Salto, in the state of
Nayarit, Mexico and title was awarded on June 29, 2009. The property covers the projected strike
extension of the San Cristobal gold zone located in the south-eastern portion of the Trinidad concession.
San Cristobal is a 12 square kilometre area consisting of hydrothermal breccias and quartz veining in four
target zones (see July 22, 2008 press release). Soil sampling has defined a northwest trending gold- in-soil
anomaly which extends over 3 kilometres onto the newly acquired ground. Anomalous trench and rock chip
sample results range from 0.5 g/t to 62 g/t gold. Geologic mapping and drill target definition is planned for
the end of 2009 with drilling planned in early 2010. The northern limit of this property is located
approximately 13 kilometres south of the Taunus target where Oro Gold is currently drilling.
La Union, Mexico
During fiscal 2009, Oro Gold staked the 258-square-kilometre concession La Union, in the state of Sinaloa,
Mexico. The La Union concession covers a portion of the northwest-trending structural corridor that hosts
Oro Gold’s Taunus gold deposit on its Trinidad property and is considered highly prospective for gold
mineralization. La Union has not received systematic exploration and is considered grassroots in nature
with good exploration potential. First phase reconnaissance surface work has identified favourable geology
with evidence of abundant quartz vein material. Anomalous results ranging from 21 to 1218 ppb gold were
obtained in five stream sediment samples collected on the property.
PROPERTY AGREEMENTS
Certain concessions of the Trinidad property (namely Nancy, Santa Cesilia and La Poderosa) and the San
Isidro property (San Isidro and El Porvenir) are subject to an agreement whereby the Company has the
right to explore the concessions for up to four years, in exchange for annual payments of US$25,000. The
Company has the option to purchase, at any time during the four year period, a 100% interest in the claims
according to the following schedule: Nancy for US$200,000; San Isidro and El Porvenir for US$200,000;
and Santa Cesilia and La Poderosa for US$200,000. Any payments made will be deducted from the
purchase of the claims. A scaled NSR based on the price of gold is also payable to the owner. The
Company may purchase the NSR for US$1,000,000. The annual payments corresponding to February
2006 to 2009 were satisfied in accordance with the agreement. However, during the year the parties
amended the agreement to replace the US$500,000 final balloon payment due February 6, 2010 with an
escalating schedule of payments of US$5,000 upon signing, US$ 25,000 on March 22, 2010, US$ 30,000
on March 22, 2011, US$ 60,000 on March 22, 2012 and on March 22, 2013, US$ 150,000 on March 22,
2014 and US$ 170,000 on March 22, 2015. The amounts are subject to 16% Value Added Tax (“IVA”).
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 9
OUTLOOK
Going forward, the Company’s main focus will be to continue to advance the Trinidad project and initiate
exploration on two district size project areas, Tigra Negra and Rosario (see figure below). (The increased
property positions consolidated a strategic, contiguous property position along a northwest-trending
structural corridor which has the potential to host significant new gold discoveries. The total land package
now exceeds 2,500 square kilometres in the Trinidad district.)
The success of the 2009 drill program and the continued success in the beginning of 2010 should contribute
to an increase in the Company’s gold resource base once a new resource estimate is announced later in
2010.
The Company expects to continue funding its affairs through 2010 from its most recent financing (gross
proceeds of approximately $12 Million in July 2009) and believes it has sufficient funds for all activities
during the next 12 months.
2010 Plans:
Oro Gold plans to drill a minimum of 10,000 metres with the objectives of substantially increasing its gold
resources, and making new gold discoveries in other areas along the 125-kilometre-long northwest-trending
corridor. The Trinidad district hosts multiple gold targets that are being advanced to drill stage. The San
Cristobal target will be one of the first areas to be drilled this year.
The Company is anticipating a landmark year by accomplishing the following goals:
? Increase the gold resource base to the million-ounce mark at Taunus-Eldorado's historic open-pit
area;
o Diamond and reverse-circulation drilling of 10,000 m (first-quarter and second-quarter
2010);
o Update the NI 43-101 resource at the Taunus-Eldorado historic open-pit area (third-quarter
2010);
? Make a new gold discovery outside Taunus-Eldorado's historic open-pit area;
? Complete an in-house scoping study on the Taunus gold resource (third-quarter 2010);
? Discover three new gold targets in region: Trinidad, Rosario and Tigra Negra (2,500-squarekilometre
property position) (fourth-quarter 2010).
Form 51-102F1
INTERIM MANAGEMENT DISCUSSION & ANALYSIS
For the three months period ended February 28, 2010
Page 10
LIQUIDITY AND CAPITAL RESOURCES
The Company is in the exploration stage and therefore has no cash flow from operations. At February 28,
2010, the Company had cash and cash equivalents of $7,767,620 (2009 Q1 - $58,187), and working capital
of $7,965,937 (2009 Q1 - deficiency $472,334).
The Company had $762,939 (2009 Q1 - $628,223) in accounts receivable and refundable taxes of which
approximately $668,166 (2009 Q1 - $543,300) is IVA paid in Mexico. The Company has applied for refund
of the IVA and expects a resolution from the Mexican authorities during the current fiscal year.
At present, the Company’s operations do not generate cash flows and its financial success is dependent on
management’s ability to discover economically viable mineral deposits. The mineral exploration process
can take many years and is subject to factors that are beyond the Company’s control.
The Company currently has sufficient financial resources to meet its administrative overhead and property
commitments going forward and is confident that it can raise additional funds to undertake all of its planned
exploration activities.
Operating Activities
Cash utilized in operating activities during the quarter ended February 28, 2010 was $1,530,929 (2009 Q1 -
$466,591) before any changes in non-cash working capital. After adjusting for cash flows applied to non
cash working capital, cash used in operating activities was $1,470,556 (2009 Q1 - $635,655).
Investing Activities
The total cash flow used for investing activities during 2010 Q1 was $40,065 (2009 Q1 – $32,123) of which
$28,855 was related to the resource property costs (2009 Q1 -$14,341l) and $11,210 for purchase of
equipment (2009 Q1 - $17,782).
At February 28, 2010, the Company’s investment in resource properties comprised of $546,505 (November
30, 2009 - $517,649) of acquisition costs. The Company’s investment in equipment, net of amortization,
was $158,663 (November 30, 2009 - $162,250).
Financing Activities
During the first quarter of 2010, a net total of $65,343 from financing activities was raised by issuing new
equity compared to $106,833 in Q1 2009. The following table shows how the funds were raised.
Financing Activities 2010 2009
Common shares issued, net of issuance costs - 115,721
Proceed from options exercised 2 7,750 -
Proceeds from warrants issued in private placements 3 7,713 -
Shares issuance costs ( 120) (8,888)
6 5,343 106,833
Subsequent to |
