MAIL STOP 05-11
November 17, 2004
Tim Coupland, President
Dynamic Gold Corp.
675 West Hastings Street
Suite 200
Vancouver, BC Canada V6B 1N2
Re: Dynamic Gold Corp.
Registration Statement on Form SB-2
File No. 333-119823
Filed October 19, 2004
Dear Mr. Coupland:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
General
1. Please supplementally provide any artwork, photographs, or maps
that are to be inserted in your prospectus. We may have comment
on
its contents. Please note that inside front cover graphics should
be
clear illustrations of your product or business with concise
language
describing the illustrations.
2. We note that this registration statement covers 47.5% of the
shares outstanding and 100% of the outstanding shares not owned by
your two officers/directors. Supplementally, please explain why
this
is not an offering that is "by or on behalf" of the registrant.
3. Insert a small-scale map showing the location and access to
your
property. Note that SEC`s EDGAR program now accepts digital maps;
so
please include these in any future amendments that are filed on
EDGAR. It is relatively easy to include automatic links at the
appropriate locations within the document to GIF or JPEG files,
which
will allow the figures and/or diagrams to appear in the right
location when the document is viewed on the Internet. For more
information, please consult the EDGAR manual, and if you need
addition assistance, please call Filer Support at 202-942-8900.
Otherwise provide the map to the staff for our review.
4. Discuss the phased nature of the exploration process, and the
place in the process your current exploration activities occupy.
Disclose that you will make a decision whether to proceed with
each
successive phase of the exploration program upon completion of the
previous phase and upon analysis of the results of that program.
Make it clear to investors that even if you complete your
current exploration program and it is successful in identifying a
mineral deposit, you will have to spend substantial funds on
further
drilling and engineering studies before you will know if your have
a
commercially viable mineral deposit, a reserve.
Registration Statement Cover Page
5. Please include the IRS Employer Identification Number when
received.
Prospectus Cover Page
6. The prospectus cover page should be limited to the information
required by Item 501 of Regulation S-B. Therefore, please remove
the
statement that the offering price was based upon the last sale of
common stock to investors.
Summary, page 5
7. Please include the zip code in the address for your principal
executive offices.
8. Please provide the definition of "exploration stage
corporation"
as set forth in Guide 7(a)(4) of the Securities Act Industry
guides.
Provide similar disclosure in the business section.
9. We note that the word gold is in both the name of your company
and
property. If applicable, please clarify that you are in
exploration
for other minerals in addition to gold. Clarify throughout the
prospectus.
10. You state that you own "one property." It appears, however,
that
the Crown owns the property and that the company`s only right to
the
property consists of mining claims that are held in trust by Dan
Patrie Exploration Ltd. Please revise to clarify this point
throughout the prospectus.
11. If true, please revise this section to clarify that you have
achieved loses since inception, have no operations, have been
issued
a going concern opinion and rely upon the sale of your securities
or
loans from management to fund operations. Provide similar
disclosure
under the subheading "General" in the Business section.
Risk Factors, page 6
12. Please revise your first paragraph to indicate that you
discuss
all material risk in this section.
13. The statement in the second risk factor that "the likelihood
of
success must be considered in light of the problems, expenses,
difficulties, complications and delays encountered in connection
with
the exploration of the mineral properties that we plan to
undertake"
is a generic risk. Please remove.
14. Risk factor 5 appears to be a risk that is included in risk
factor 1. Please consider combining risk factors 1 and 5 or
revising
the fifth risk factor to focus on the risk noted in the
subheading.
15. Please revise the sixth risk factor subheading to specifically
refer to the going concern raised by the independent auditor`s
report.
16. The tenth risk factor, discussing penny stocks, is a generic
risk
factor. Please remove.
17. Please provide a risk factor to discuss the fact that the
claims
are held in trust for the company rather than directly by the
company
and the resultant risk.
18. Add a risk factor that addresses that fact that the
probability
of an individual prospect ever having "reserves" that meet the
requirements of Industry Guide 7 is extremely remote, in all
probability your properties do not contain any reserves, and any
funds spent on exploration will probably be lost.
Selling Shareholders, page 10
19. Please disclose if any of your selling shareholders are
affiliates of brokers-dealers. If applicable, please include a
representation, that each affiliate:
* Purchased your securities in the ordinary course of business,
and
* At the time of purchase of the shares to be resold, the seller
had
no agreements or understandings, directly or indirectly, with any
purchaser to distribute the shares.
If you cannot provide this representation, please advise
supplementally.
Plan of Distribution, page 14
20. We note your statement that you are "bearing all cost relating
to
the registration of the common stock." (Emphasis ours) Please
disclose, as indicated in Note 1 on page F-6, that "costs of this
offering will be paid for from proceeds from advances from
shareholders and an anticipated equity financing." Also, please
disclose whether any shareholders have agreed to provide such
advances. We may have further comment.
Directors, Executive Officers, Promoters and Control Persons, page
16
21. We note your statement on page 17 and in risk factor 8 that
Tim
Coupland will devote 25% of his time to your company. We refer to
the Form 20-F for Alberta Star Development Corp. ("Alberta Star")
filed for on June 1, 2004 for the period ended November 30, 2003.
Item 4.4 of the referenced filing states Mr. Coupland devotes 90%
of
his time to Alberta Star at a salary of $5,000 a month. Please
advise regarding this discrepancy or reconcile the noted
statements.
22. For all mining entities that your management had prior or
present
involvement, please revise to disclose the efforts made to date to
explore, develop and/or produce or refine any minerals.
23. Please revise to indicate the approximate number of hours per
week your management will devote to company business.
24. We note your mention of CKD Ventures Ltd. Please revise to
describe CKD Ventures` line of business.
25. Considering that your management, particularly Mr. Coupland,
could encounter business opportunities that benefit other
companies
they are associated with, it appears that a conflict of interest
may
arise. Please discuss and consider including a risk factor
addressing any potential conflicts of interest.
Security Ownership of Certain Beneficial Owners and Management,
page
18
26. Please revise to include persons and group of persons that
beneficially own more that five percent of your shares. Please
refer
to Item 403 of Regulation S-B and accompanying instructions.
Description of Business, page 20
27. Disclose:
* The nature of your ownership or interest in the property.
* Any other underlying agreements or interests in the property.
* In a table, provide names, claim or grant number, date of
recording
and expiration date, so your claims can be distinguished from
other
claims in the area.
* Disclose the conditions you must meet to keep these claims.
* Disclose the area of your claims, either in hectares or acres.
Revise to fully discuss the material terms of your land or mineral
right securing agreements. Refer to paragraph (b)(2) of Industry
Guide 7.
28. For your property, provide the disclosures required by
Industry
Guide 7 (b). In particular, provide:
* A map(s) showing the location of your properties.
* Any conditions that you must meet in order to obtain or retain
title to the property.
* A brief description of the rock formation and mineralization of
existing or potential economic significance on the property.
* A description of the present condition of the property.
* A description of any work completed on the property.
* A description of equipment and other infrastructure facilities.
* The current state of exploration of the property.
* The total cost of your property incurred to date and planned
future
costs.
* The source of power that can be utilized at the property.
* If applicable, provide a clear statement that the property is
without known reserves and the proposed program is exploratory in
nature.
Refer to Industry Guide 7 (b)(1)-(5) for specific guidance.
Industry
Guide 7 can be reviewed on the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.
29. Please clearly state, if true, that you are not a blank check
company subject to Rule 419 and that you have no intention to
merge
with or acquire another company in the foreseeable future.
30. Please define the terms "legal feasibility" and "logging
road."
31. According to the state of Nevada website, you are delinquent
in
state reporting requirements.
32. Please revise to explain how you would "exploit" mineral
deposits.
33. We refer to the last sentence on page 20. Please consider
revising the sentence to enhance comprehension. For instance,
please
elaborate on the "expenditure requirements under the property
agreement." Additionally, please clarify your reference to
"development of property." If there is an additional property
agreement, other than exhibit 10.1, please file as a material
agreement.
34. We note that the claims were recorded in Mr. Patrie`s name and
that he holds the mineral claims in trust. Please clarify whether
this resulted in the company acquiring the mineral claim. We note
disclosure in the summary and this section that you acquired one
mineral claim and disclosure in note 3 to the financial statements
that you have acquired a mineral property. Please revise or
advise.
35. Please define the term "economic mineralization". If
applicable,
please refer to Guide 7(b)(6) of the Securities Act Industry
guides
and revise accordingly.
36. Please revise to disclose the business purpose of having the
title of Sobeski Lake held in trust.
37. On page 21, we note your statement that "Red Lake provides
most
services and supplies . . . . as well as a ready supply of
experienced exploration personnel." Please disclose whether you
have
entered into any agreements or negotiations, preliminary or
otherwise, with any personnel or geologists to help you with the
exploration of the mineral claim.
38. Your disclosure only encompasses the exploration for economic
mineral deposits. In the event that deposits are discovered, it
appears that you do not have the capabilities to remove and refine
those minerals. Please revise to discuss if you intend to
interest
other entities in the development, removal, and/or refinement of
any
minerals you may discover during your exploration.
39. Please provide the basis for the statement that "total gold
production from the district exceeds 20 million ounces and current
reserves likely comprise a similar volume" or else delete.
Geological Report: Sobeski Lake Gold Property
40. You note that Mr. Ostensoe has provided a geologic report on
the
Sobeski Lake property. Supplementally provide a copy of the
report,
and a written consent from any experts whose name you cite, and/or
whose work you incorporate into your document. These consents
should
concur with the summary of the information in the report
disclosed,
and agree to being named as an expert in the registration
statement.
Please refer to Rule 436 of Regulation C.
41. Please provide the basis for the statement that "we anticipate
that the northern part of the Red Lake camp will become the focus
of
increased exploration activity and enhance the value of our
claims"
or else remove.
42. Please provide greater details regarding your proposed
exploration plan. Also, include the anticipated time frame for
commencing and completing each phase. Lastly, discuss the
anticipated sources of funding.
Compliance with Government Regulation
43. Please disclose any fees or exploration costs that must be
incurred to maintain the mineral claims and disclose whether they
will be paid by your company or by Mr. Patrie.
44. We refer to your statements concerning work permits. Since
the
permits are free, please disclose any efforts made to acquire a
permit or reasons for not pursuing one. Disclose the anticipated
time frame for obtaining the work permits.
45. We note your statement that you do not know the cost
associated
with regulatory compliance. We also note your statement that you
have "budgeted for regulatory compliance cost." Please expand
your
discussion regarding the budgeted compliance cost. Also, explain
the
source of your budgeted compliance costs in light of the current
limited cash resources of the company.
Research and Development Expenditures
46. We note your statement that you "have not incurred any other
research or development expenditures." Please revise to include
the
cost associated with the geological report mentioned on page 22.
Please refer to Item 101(b)(10) of Regulation S-B.
47. Please disclose the competitive business conditions and the
small
business issuer`s competitive position in the industry, as
required
by Item 101(b)(4) of Regulation S-B.
Plan of Operation, page 24
48. Please add a section discussing liquidity and capital
resources.
The discussion and analysis should highlight known trends,
demands,
commitments, events and uncertainties, and specific guidance on
disclosures about liquidity, capital resources and critical
accounting estimates.
49. Please disclose the current cash balance as of the most recent
practicable date and disclose how long you can currently satisfy
your
cash requirements, as required by Item 303(a)(1)(i) of Regulation
S-
B.
50. In risk factor 1, we note that as of October 14, 2004, you had
zero cash holdings and that you "do not currently have sufficient
funds to conduct initial exploration." We note on page 24 that
you
"have enough funds on hand to complete these phases, which have a
combined estimated cost of $15,000." Please revise to reconcile
these statements.
51. In risk factor 1, we note that "[t]he most likely source of
future funds . . . is through the sale of equity capital," and the
"only other anticipated alternative . . . would be a sale of a
partial interest in" your property. (Emphasis ours.) Please
reconcile that with your statement on page 24 that your
"management
is prepared to provide [you] with short-term loans. . . ."
52. Please elaborate on phase two of your exploration programs.
Revise to disclose the number of people needed, the time it will
take
to complete phase two, and the necessity of employing a qualified
geologist to oversee your programs.
53. Please revise to disclose any expected hiring due to the
commencement of your plan of operation. Please refer to Item
303(a)(iv) of Regulation S-B.
54. Please revise to provide more detail relating to your
anticipated
sources of financing for the next 12 months. Please provide a
timeline illustrating the points in time you will pursue each
financing option. Also, discuss the order of preference for your
financing options.
55. We note the possible loans from management. Please disclose
whether management has agreed to provide such funding and if they
are
legally obligated to provide such funding. If not, please clearly
state and also disclose that there is no guarantee management will
provide any funding.
56. We note your statement that "[w]e do not have any arrangements
in
place for any future equity financing." We also note in Note 1 on
page F-6 that you have "an anticipated equity financing." Please
elaborate on this anticipated equity financing. In addition, you
repeat the first noted sentence twice on page 24. Please revise
to
eliminate one of them.
Description of Property, page 25
57. We note in the previous section that you incurred "office and
miscellaneous cost of $156." In this section you state that you
do
not own or lease any other property. Please revise to explain you
office arrangement.
Financial Statements, page 28
Note 3, Mineral Property
58. The disclosure that "the Registrant acquired a 100% undivided
right, title and interest in and to four mineral claims, known as
the
Sobeski Lake Gold Property may not be totally accurate. You
disclose
on page 21, under the Caption, "Title to the Sobeski Lake Gold
Property" that the claims will be held in trust by Dan Patrie of
Dan
Patrie Exploration Ltd, of Ontario, Canada. You also disclose
that
if the Trustee becomes bankrupt or transfer the Claims to a third
party, you may incur significant legal expenses in enforcing your
interest in the Claims in Ontario Courts. Tell us more about
this
risk and revise Note 3 to disclose if the registrant can ever
possess
legal mining claims for Land in British Columbia. Note 3, makes
reference to 24 claim units, whereas throughout the document
reference is to four mineral claims. Please correct this apparent
inconsistency.
Updated Financial Statements and Consent
59. Provide a current consent in any amendment and ensure that the
financial statements are updated as required by Item 310(g) of
Regulation S-B.
Available Information, page 29
60. Please provide the disclosure required by Item 101(c)(1) and
(2)
of Regulation S-B.
Part II
Recent Sales of Unregistered Securities
61. Please disclose the exemption relied upon in the May 2004
issuance of common stock to Messrs. Coupland and Game and the
facts
supporting reliance upon the exemption.
Exhibits
62. Please file any instruments defining the rights of security
holders, as required by Item 601(b)(4) of Regulation S-B.
Closing Comments
As appropriate, please amend your registration statement in
response to these comments. You may wish to provide us with
marked
copies of the amendment to expedite our review. Please furnish a
cover letter with your amendment that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review. Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
? should the Commission or the staff, acting pursuant to
delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
? the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
? the company may not assert staff comments and the declaration
of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as a confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering
of the securities specified in the above registration statement.
We
will act on the request and, pursuant to delegated authority,
grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Any questions regarding the financial statements may be
directed to Solomon Cromwell at (202) 942-2876. Questions on
other
disclosure issues may be directed to Duc Dang at (202) 824-5508,
or
to Pamela Howell, who supervised the review of your filing, at
(202)
942-1954. Questions pertaining to the engineering comments may be
directed to Roger L. Baer, Mining Engineer, at (202) 942-2965.
Sincerely,
John Reynolds, Assistant
Director
Office of Emerging Growth
Companies
cc: Joseph I. Emas
Fax: (305) 531-1274
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Dynamic Gold Corp.
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