Mail Stop 0511
December 3, 2004
Robert J. Kinloch, President
Middle Kingdom Resources Ltd.
347 Bay Street
Suite 202
Toronto, Ontario
M5H 2R7
CANADA
RE: Middle Kingdom Resources Ltd.
File No. 333-120051
Registration Statement on Form SB-2
Filed October 28, 2004
Dear Mr. Kinloch:
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. 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.
2. In the appropriate locations, disclose that you do not have
any
reserves.
Prospectus Cover Page
3. 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 common stock will be sold by Robert J. Kinloch.
4. We note disclosure in the prospectus that you do not intend to
advertise your offering through tombstones or investment meetings
prior to the effective date of this registration statement.
Supplementally advise whether you intend to use this prospectus
before the effective date of the registration statement. If you
do,
please include the disclosure required by Item 501(a)(10) of
Regulation S-B.
Selected Financial Data, p. 6
5. Please add the "Net Loss - Per Share" data to the table.
Risk Factors, p. 6
6. Please remove the mitigating language from your sixth risk
factor.
7. Based on your disclosure, it does not appear as if you have had
a
geologist or mining engineer examine your property and written a
report. Add a risk factor that addresses the fact that a
professional geologist or mining engineer has not examined your
property in the field. Detail the risks to investors, and the
fact
that you do not have an examination report.
8. Risk factor nine appears to be duplicative of one or more
others.
Please consider deleting.
Use of Proceeds, p. 11
9. Please reconcile the statement in the text that "it will cost
up
to $10,000 to analyze the core samples" with the maximum amount
provided in the chart above such statement ($5,000).
Plan of Distribution; Terms of the Offering, p. 15
10. Please delete the three references on pages 16 and 17 to "the
registration statement is declared effective by the SEC."
Procedures for Subscribing, p. 17
11. In item 1, please indicate that a copy of the subscription
agreement is included with the prospectus.
Business
General, p. 19
12. 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.
13. In your "Property Geology" section, you indicate that you have
evidence of barite. Disclose what evidence you have.
14. Please clarify the relationship between Energold and Middle
Kingdom in the third sentence of this section.
15. Please disclose the form and year of organization, as required
by
Item 101(a)(1) of Regulation S-B.
16. Please include in the second paragraph, if true, that the
company
does not consider itself a blank check as the term is defined in
Regulation C, Rule 419, and does not intend to merge with or
acquire
another company in the foreseeable future.
17. You disclose that under the terms of the agreement, you have
the
option to earn up to an undivided 51% interest in the Jarvis
Island
Property. Tell us more about the risks involved in trying to hold
a
controlling interest in this property and tell us and revise to
disclose if the Registrant, a US company, can ever possess a
controlling legal mining claim for land in British Columbia. In
addition, tell us and revise to disclose how you intend to account
for the joint venture.
Operations, p. 21
18. Please disclose the names of the two persons to represent the
Company on the Management Committee.
Our Proposed Exploration Program, p. 25
19. We note the disclosure at the bottom of page 26 with respect
to
your estimated costs for core sampling. Please advise why the
amounts stated do not match those provided earlier in the use of
proceeds section.
20. Please disclose the name of the person with whom Mr. Kinloch
consulted in his estimations for this section, as noted in the
last
sentence on p. 26.
21. Please disclose the agreement that Mr. Kinloch will allow to
expire, as stated in the last sentence of this section.
Management`s Discussion and Analysis or Plan of Operation
Results of Operations, p. 31
22. Please explain or delete the following statement: "We will be
exploring one property Judy, as this land is fee simple we should
consider deleting this following reference to four claims, also in
the next sentence again as the land is fee simple we should
consider
dropping the reference to staking and leave the balance of the
sentence as is containing four claims. The property has been
staked
and will begin our exploration plan upon completion of this
offering."
23. Additionally, please disclose the need for staking the claim
in
light of your previous statement that "Energold holds a 100%
undivided right, title and interest in all of the Jarvis Island
Property free and clear of all encumbrances."
Management, p. 32
24. Please consider whether Maverick Minerals Corporation is or
was a
competitor of the registrant. If so, a risk factor may be
appropriate. Reconsider the disclosure under Conflicts of
Interest.
25. Mr. Kinloch`s time devoted to the business of Maverick
Minerals
should be indicated.
26. The current status of the business of Maverick Minerals should
be
briefly discussed. It appears to be at or close to insolvency and
out of business based on recent Exchange Act filings.
Description of Securities, p. 36
27. Please clarify the last sentence under the subsection Non-
Cumulative Voting to indicate that this percentage assumes the
maximum amount is sold in this offering.
Certain Transactions, p. 38
28. The first paragraph under this caption is not understood.
Please
clarify the "possible transfer of our property" being discussed.
29. Describe the interest rate terms of the $16,400 loan.
30. Please reconcile the statement that "In February 2004, Mr.
Kinloch loaned us $16,440 to pay for the cost of staking the
property
and a portion of the legal fees for this offering" in light of:
(a.)
the fact that the Company was not incorporated until June 17,
2004;
and, (b.) your previous statement that "Energold holds a 100%
undivided right, title and interest in all of the Jarvis Island
Property free and clear of all encumbrances."
Independent Auditor`s Report, p. F-1
31. The title of the report should be revised to that in PCAOB
Auditing Standard No. 1. In addition, the report should be
revised
to comply with the form in the Auditing Standard.
32. The first sentence of the referenced report states that the
audit
as of August 31, 204. Please correct to read as of August 31,
2004.
Updated Financial Statements and Consent
33. Provide a current consent in any amendment.
Part II
Indemnification of Officers and Directors, p. 52
34. Please provide the disclosure required by Item 702 of
Regulation
S-B
Exhibits
Opinion
35. Please reconcile your legality opinion`s statement that the
Company`s registered office is located in Las Vegas with the
records
of the Nevada Secretary of State that the registered office is
located in Reno.
36. Revise your legality opinion to indicate that the opinion
opines
upon Nevada law including the statutory provisions.
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.
You may contact Solomon Cromwell at (202) 942-2876 if you
have
questions regarding comments on the financial statements and
related
matters. Questions on other disclosure issues may be directed to
John Zitko at (202) 824-5532, or Don Rinehart, who supervised the
review of your filing, at (202) 942-4622.
Sincerely,
John Reynolds, Assistant Director
Office of Emerging Growth Companies
cc: Conrad C. Lysiak
Fax (509) 747-1770
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Middle Kingdom Resources Ltd.
December 3, 2004
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