February 18, 2010
Karl Hiller, Branch Chief
United States
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C.
20549 – 4628
Mr. Karl Hiller,
| Re: | Hard Creek Nickel Corporation | |
| Form 20-F for the fiscal year end December 31, 2008 | ||
| Filed June 23, 2009 | ||
| Response Letter Dated February 2, 2010 | ||
| File No. 0-52326 |
Thank you for your letter dated February 16, 2010. We have amended our Form 20-F in response to your comments and describe below the manner in which we have done so.
We enclose two marked copies of our amended Form 20-F, for use during your review process.
Our responses below are numbered in a manner that corresponds with your comments as set out in your letter of February 2, 2010.
General
1. We have filed our letter of correspondence dated January 12, 2010 and will file this letter of correspondence dated February 17, 2010 on EDGAR on February 18, 2010 at the latest.
2. We will insert and explanatory paragraph at the forepart of our amended Form 20-F explaining the reasons for our filing the amendment and informing readers to the specific locations of further details and revisions once the Commission and Hard Creek Nickel Corporation have agreed on the final amendments to our Form 20-F.
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
3. We will update the officer certifications to comply with Rule 12b-15 of Regulation 12B once the Commission and Hard Creek Nickel Corporation have agreed on the final amendments to our Form 20-F.
Operating and Financial Review and Prospects, page 28
4. We have revised the Form 20-F to comply with Instruction 2 to Item 5 and corrected our disclosure to state that our financial statements have been prepared in accordance with Canadian GAAP and not United States GAAP as previously referenced. In our previous Form 20-F filings, we had a separate set of audited financial statements prepared under United States GAAP, for the fiscal year ending December 31, 2008 we prepared only one set of financial statements under Canadian GAAP with a separate note on the differences between Canadian and United States GAAP. These references to United States GAAP in our original 2008 Form 20-F were copied from our 2007 Form 20-F and were not removed to comply with Instruction 2 to Item 5.
We have revised our disclosure in the first paragraph to clarify the primary difference between Canadian and United States GAAP for acquiring mineral properties and mineral right costs.
The Offer and Listing, page 43
5. We have revised the Offer and Listing section to comply to Instruction 9 items 9.A.4 and 9.C pertaining to the price history of our stock and the market in which our shares trade.
Financial Statements
Statement of Cash Flows
6. In our view we view the change on our Cash Flow Statement as a reclassification of mining tax credits from Investing Activities to Operating Activities to be consistent with our presentation in 2007 and propose this change as a note disclosure rather than a restatement since nothing was affected on the Balance Sheet, Statement of Loss, Retained Earnings or Earnings per Share. See last page for details.
Note 11 - Differences Between Canadian and United States Generally Accepted AccountingPrinciples and Practices
7. We have revised our risk factor disclosure to be consistent with the determinations we have made about recoverability and our accounting costs for our mineral assets.
During the fiscal year ended December 2006, the Company adopted recommendations from the Emerging Issues Task Force (“EITF”) – EITF Abstract 04-2: “Whether Mineral Rights Are Tangible or Intangible Assets”. In accordance with the EITF, acquisition costs for mineral rights are accounted for as tangible assets and shown as a separate component of property, plant, and equipment. Since the adoption of EITF 04-2, the Company did not incur any mineral property acquisition costs, the acquisition costs under Canadian GAAP were incurred during the fiscal year 2002 prior to the adoption of EITF 04-2.
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
As part of this response letter, the Company acknowledges that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
I will be away from the office from February 18th to March 1st and upon my return, I look forward to any further comments you may have regarding the Form 20-F or with respect to any of the above responses. Should you have any questions, please do not hesitate to contact me at 604.681 -2300 or 604.816 -8512 once I am back in the office.
Yours truly,
/s/
Brian Fiddler, CFO
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
Hard Creek Nickel Corporation
Consolidated Statements of Cash Flows
For The Year Ended December 31, 2008
| Original | Reclassified | ||||||||
| OPERATING ACTIVITIES | |||||||||
| Net loss | -1,958,267 | -1,958,267 | |||||||
| Non cash items | |||||||||
| Amortization | 20,860 | 20,860 | |||||||
| Property impairment | 44,662 | 44,662 | |||||||
| Stock-based compensation | 317,436 | 317,436 | |||||||
| Financing costs | 426,700 | 426,700 | |||||||
| Future income tax recovery | -102,822 | -102,822 | |||||||
| Changes in operating assets and liabilities | |||||||||
| Recoverable taxes | 458,435 | 458,435 | |||||||
| Mining tax credits | - | ** - 983,320 | -983,320 | ||||||
| Prepaid expenses | 42,380 | 42,380 | |||||||
| Accounts payable and accrued liabilities | -568,091 | -568,091 | |||||||
| Due to related party | -1,484 | -1,484 | |||||||
| -1,320,191 | -2,303,511 |
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
| INVESTING ACTIVITIES | |||||||||
| Reclamation bond | - | ||||||||
| Purchase of office equipment and vehicle | -39,090 | -39,090 | |||||||
| Exploration and development costs | * -4,293,398 | ** 983,320 | -3,310,078 | ||||||
| -4,332,488 | -3,349,168 |
** Reclassifiy BC refundable mining tax credits from Investing to
Operating
INVESTING ACTIVITIES
Exploration and development costs
| Consolidated Schedule of Deferred | Exploration and Costs | 2,872,429 | |||
| Add back: | Write down property | 44,662 | |||
| BC refundable mining tax credits | 983,320 | ||||
| Deduct: | Federal non-refundable mining tax credits | 605,284 | |||
| Stock based compensation booked as Geological services | - 212,297 | ||||
| * | 4,293,398 |
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
Hard Creek Nickel Corporation
Analysis of Mining Tax Credits Receivable
For The Year Ended December 31, 2008
Consolidated Schedule of Deferred Exploration and Costs
BC refundable mining tax credits
| Year 2003 | 99,848 | |||
| Year 2004 | 203,437 | |||
| Year 2005 | 24,319 | |||
| Year 2006 | 295,598 | |||
| Year 2007 | 943,102 | |||
| Year 2008 | 983,320 | |||
| Balance, December 31, 2008 | 2,549,624 |
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |
| Mining Tax Credits Receivable | ||||
| Total BC refundable mining tax credits claimed | ||||
| for fiscal years 2003 - 2008 | 2,549,624 | |||
| Year 2003 cash received | - 99,848 | |||
| Year 2004 cash received | - 203,437 | |||
| Year 2005 cash received | - 24,319 | |||
| Balance, December 31, 2008 | 2,222,020 | |||
| Proof: | ||||
| BC refundable mining tax credits | ||||
| Year 2006 | 295,598 | |||
| Year 2007 | 943,102 | |||
| Year 2008 | 983,320 | |||
| Balance, December 31, 2008 | 2,222,020 |
| #1060 – 1090 W. Georgia Street Vancouver, BC V6E 3V7 Tel (604) 681-2300 Fax (604) 681-2310 |
| info@hardcreek.com www.hardcreeknickel.com |