May 17, 2005
via facsimile and U.S. mail
Mr. Fred W. Brackebusch
President, Treasurer and Director
New Jersey Mining Company
88 Appleberg Road
Kellogg, Idaho
Re: New Jersey Mining Company
Form 10-KSB, Filed March 30, 2005
Form 10-QSB, Filed May 16, 2005
File No. 0-28837
Dear Mr. Brackebusch:
We have reviewed the above filings and have the following
accounting and engineering comments. We have limited our review
to
the areas commented on below. 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.
10-KSB for the year ended December 31, 2004
Report of Independent Registered Public Accounting Firm, page 24
1. We note that you present the cumulative results of operations,
changes in stockholders` equity and statements of cash flows for
the
period from inception on July 18, 1996 to December 31, 2004 as
audited. However, your auditors indicate in their report that
they
did not audit the portion of those cumulative totals for the
period
from inception on July 18, 1996 to December 31, 2002. Since there
is
no disclosure or labeling to suggest the information related to
the
period from inception on July 18, 1996 to December 31, 2002 is
unaudited, it will be necessary to amend your filing to include
the
other auditor`s report, provided that auditor is willing to
reissue
the opinion, or to otherwise label such information as unaudited
until you are able to make other arrangements. Please contact us,
along with your independent auditors, to discuss the requested
items
above prior to submitting your response.
Statement of Changes in Stockholders` Equity, page 28
2. With regard to transaction reflected in the line item "Issuance
of
common stock for services" during the year ended December 31,
1999,
tell us the reasons there was no change in the common stock amount
pertaining to the 79,300 shares issued.
Statements of Cash Flows, page 30
3. Under paragraph 14 of SFAS 95 you are required to classify cash
receipts and cash payments as resulting from investing, financing,
or
operating activities. As such, please revise your statement of
cash
flows to classify in the appropriate sections the amounts included
in
the line item "cash of acquired companies" for the period from
inception on July 18, 1996, through December 31, 2004.
Exhibit 31.1
4. We note the certification you provide appears to be
inconsistent
with the requirements of Item 601(b)(31) of Regulation S-B.
Please
revise paragraph 5 of the certification to read "based on my most
recent evaluation of internal control over financial reporting,"
if
this would properly reflect the nature of the evaluation that you
performed.
Engineering Comments
General
5. Insert a small-scale map showing the location, transportation
corridors, and access to the properties. Note that SEC`s EDGAR
program now accepts digital maps, so please include these in any
future amendments that are uploaded to 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 for additional assistance, please call Filer Support
at
202-942-8900. Otherwise, provide the map to the staff for review.
6. The filing refers to mines and other mineral properties that
exist
in the area of the property. This may allow investors to infer
that
the company`s property may have commercial mineralization, because
of
its proximity to these mines and properties. Remove information
about mines, prospects, or companies operating in or near to the
property. Focus the disclosure on the company`s property.
7. To the extent that the web site contains disclosure about
adjacent
or other properties on which the company has no right to explore
or
mine, include the following language along with the following
cautionary note, including the bolding and indenting:
"This web site also contains information about adjacent properties
on
which we have no right to explore or mine. We advise U.S.
investors
that the SEC`s mining guidelines strictly prohibit information of
this type in documents filed with the SEC. U.S. investors are
cautioned that mineral deposits on adjacent properties are not
indicative of mineral deposits on our properties."
8. Since the cutoff grade concept is important to understanding
the
potential of the mineral properties, disclose the "cutoff" grade
or
tenor used to define the reserves. In establishing this cut-off
grade, disclose the operating parameters and assumptions that
realistically reflect the location, deposit scale, continuity,
assumed mining method, metallurgical processes, costs, and
reasonable
metal prices.
Golden Chest, page 14
Present Condition and Work Completed on the Property, page 15
9. The third paragraph of the section refers to material within a
preliminary pit design constructed using a $ 500/oz. gold price.
However, the spot price of gold has not reached the $500 level for
a
considerable amount of time and Industry Guide 7 requires that the
reserves be economic and legally accessible at the time of the
reserve determination. Revise this disclosure using more recent
cost
estimates and historical prices. The staff believes that the
historic three-year average price is more appropriate.
It is the staffs` position that proven or probable "reserves" for
a
mineral property cannot be designated unless:
* Competent professional engineers conduct a detailed engineering
and
economic feasibility study, and the study demonstrates that a
mineral
deposit can be mined at a commercial rate and a profit made. This
is
the "final" or "bankable" feasibility study that is required to
meet
the requirements to designate reserves under Industry Guide 7.
* An appropriate historic metal price such as the historic three-
year
average price is used in any reserve or cash flow analysis to
designate reserves.
* The company has demonstrated that the mineral property will
receive
its governmental permits, and the primary environmental document
has
been filed with the appropriate governmental authorities.
Industry Guide 7 can be reviewed on the Internet at:
www.sec.gov/divisions/corpfin /forms/industry.htm#secguide7
Silver Button Prospect, page 18
10. As a general checklist, when reporting the results of sampling
and chemical analyses:
* Disclose only weighed-average sample analyses associated with a
measured length or a substantial volume.
* Eliminate all analyses from "grab" or "dump" samples, unless the
sample is of a substantial and disclosed weight.
* Eliminate all disclosure of the highest values or grades of
sample
sets.
* Eliminate grades disclosed as "up to" or "as high as."
* Eliminate statements containing grade and/or sample-width
ranges.
* Aggregated sample values from related locations should be
aggregated based on a weighted average of lengths of the samples.
* Generally, use tables to improve readability of sample and
drilling
data.
* Soil samples may be disclosed as a weighted average value over
some
area.
* Refrain from reporting single soil sample values.
* Convert all ppb quantities to ppm quantities for disclosure.
Revise the text accordingly.
Closing Comments
As appropriate, please amend your filings and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
amendments to expedite our review. Please furnish a cover letter
with your amendments 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 amendments 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 the company`s disclosure, they
are responsible for the accuracy and adequacy of the disclosures
they
have made. In connection with responding to our comments, please
provide, in writing, a statement from the company acknowledging
that:
the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
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.
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 our review of your filings or
in
response to our comments on your filings.
You may contact Regina Balderas, Staff Accountant, at (202)
942-7768 or, in her absence, Karl Hiller at (202) 942-1981 if you
have questions regarding comments on the financial statements and
related matters. Direct questions relating to the engineering
issues
to George K. Schuler, Mining Engineer, at (202) 824-5527. Direct
questions relating to all other disclosure issues to the
undersigned
at (202) 942-1870. Direct all correspondence to the following ZIP
code: 20549-0405.
Sincerely,
H. Roger Schwall
Assistant Director
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New Jersey Mining Company
May 17, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE