JEFFREY G. KLEIN, P.A.
301 Yamato Road Suite 1240
Boca Raton, Florida 33431
| Telephone: (561)953-1126 | | Telefax: (561)994-6693 |
| | | Email: jklein@jkleinlegal.com |
December 10, 20142
U.S. Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D. C. 20549
Attention:
Re: DNA Precious Metals, Inc.
Form 10-K for the Year Ended December 31, 2013
Filed March 26, 2014
File No. 000-54937
Dear Sir/Madam:
The following responses are filed in connection with the Commission’s comment letter dated December 1, 2014
1. With respect to comment No.1, we have amended the disclosure with respect to the effectiveness of the Company’s internal controls over financial reporting to read as follows:
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Annual Report (December 31, 2013). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures were effective to ensure that the information we are required to disclose in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as the principal executive and financial officers, respectively, to allow timely decisions regarding required disclosure.
2. With respect to comment No. 2, and the reasons for capitalizing the costs of cite development:
As reflected in Note 4 to the Consolidated Financial Statements, we have capitalized certain costs which include land, buildings, computer equipment, office equipment, mill equipment and vehicles. We have commenced depreciation for the items that have been placed into service, and have not depreciated any fixed assets that are not currently in service. With respect to the buildings and the mill equipment, those items have not been depreciated at this time as we are still in the process of completing the assembly of the equipment and completion of the building. We are an exploration stage company, any costs of lease, exploration, carrying and retaining unproven mineral lease properties are expensed as incurred. We expense all mineral exploration costs as incurred as we are still in the exploration stage. If we identify proven and probable reserves in our investigation of our properties and upon development of a plan for operating a mine, we would enter the development stage, which we have done and capitalize future costs until production is established. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production method over the estimated life of the proven and probable reserves. If in the future we capitalize mineral properties, these properties will be periodically assessed for impairment. To date, we have not established the commercial feasibility of any exploration prospects; therefore, all costs are being expensed.
ASC 930-805, “Extractive Activities-Mining: Business Combinations” (“ASC 930-805”), states that mineral rights consist of the legal right to explore, extract, and retain at least a portion of the benefits from mineral deposits. Mining assets include mineral rights. Acquired mineral rights are considered tangible assets under ASC 930-805. ASC 930-805 requires that mineral rights be recognized at fair value as of the acquisition date. As a result, the direct costs to acquire mineral rights are initially capitalized as tangible assets. Mineral rights include costs associated with acquiring patented and unpatented mining claims.
ASC 930-805-30-1 and 30-2 provides that in fair valuing mineral assets, an acquirer should take into account both:
| | · | The value beyond proven and probable reserves (“VBPP”) to the extent that a market participant would include VBPP in determining the fair value of the assets. |
| | · | The effects of anticipated fluctuations in the future market price of minerals in a manner that is consistent with the expectations of market participants. |
Note that no mineral rights are included in fixed assets, and they are maintained in a separate balance sheet caption.
Our fixed assets are stated at cost, less accumulated depreciation. Depreciation will be provided using the straight-line method over the estimated useful lives of the related assets when those assets are placed into service. Costs of maintenance and repairs will be charged to expense as incurred.
Should you have further questions, please do not hesitate to contact the undersigned.
| | Very truly yours, /s/ Jeffrey G. Klein Jeffrey G. Klein Counsel For DNA Precious Metals, Inc. |
DNA PRECIOUS METALS INC.
(Stationary)
Securities and Exchange Commission
Re: DNA Precious Metals, Inc.
Form 10-K for the Year Ended December 31, 2013
Filed March 26, 2014
File No. 000-54937
The following is filed in connection with the comment letter dated December 1, 2014.
The undersigned, on behalf of DNA Precious Metals, Inc. 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 filings; 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. |
Sincerely,
/s/James Chandik
James Chandik, CEO and president
