June 15, 2005
Mr. R. Herbert Hampton
Chief Executive Officer
Golden Cycle Gold Corporation
Suite 201
1515 South Tejon
Colorado Springs, CO 80906
Re: Golden Cycle Gold Corporation
Form 10-K for Fiscal Year Ended December 31, 2004
Filed March 31, 2005
Form 10-Q for Fiscal Quarter Ended March 31, 2005
Filed May 13, 2005
File No. 1-09385
Dear Mr. Hampton:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. 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 information so we may better understand
your
disclosure. After reviewing this information, we may 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 any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Fiscal Year Ended December 31, 2004
Item 9A. Controls and Procedures
Internal Control over Financial Reporting, page 18
1. We note that you have identified "certain areas in our systems
of
internal control which, if left unresolved or unaddressed, could
result in material deficiencies and weaknesses in our internal
control." You state that you are "considering what appropriate
remedial actions, if any, are necessary to improve our systems of
internal controls." If true, it is unclear how you were able to
certify that disclosure controls and procedures were effective as
of
the balance sheet date.
Under Rule 13a-15(e) of Regulation 13A, disclosure controls and
procedures are defined as "controls and other procedures of an
issuer
that are designed to ensure the information required to be
disclosed
by the issuer in the reports that it files or submits under the
Act.
.. . is recorded, processed, summarized and reported, within the
time
periods specified in the Commission`s rules and forms." Section
II.E
of Release No. 34-47986 clarifies that disclosure controls and
procedures include some elements of internal control; with the
reference stating that the " . . . evaluation and disclosure
requirements will continue to apply to disclosure controls and
procedures, including the elements of internal control over
financial
reporting that are subsumed within disclosure controls and
procedures."
It is unclear whether the potential material deficiencies and
weaknesses you identify fall within disclosure controls and
procedures, as defined. If after giving further consideration to
this matter, you believe that some internal controls subsumed
within
disclosure controls and procedures are impacted by the potential
material deficiencies and weaknesses that were identified, or you
are
otherwise unable to demonstrate that this is not the case, it will
be
necessary to amend your certifications and disclosures
accordingly.
2. We note that you have disclosed there were no significant
changes
to internal control over financial reporting within the quarter.
Please amend your disclosure to address any change in your
internal
control over financial reporting that has materially affected, or
is
reasonably likely to materially affect, your internal control over
financial reporting. Refer to the requirements of Regulation S-K,
Item 308(c), which is required of all registrants.
Item 8 - Financial Statements and Supplementary Data
Consolidated Balance Sheets, page 28
3. We note your financial position as of December 31, 2004
includes a
significant amount of short-term investments in relation to your
total assets. Tell us why you should not be considered an
investment
company as defined in section 3(a)(1) of the Investment Company
Act
of 1940. Provide us with any analysis and calculations necessary
to
support your position. We may have further comment.
Consolidated Statements of Operations, page 29
4. In the year ended December 31, 2003, you have reported a gain
on
assets sold as other non-operating income. Tell us why this item
is
properly reported as non-operating income, given the definition of
such item in Regulation S-X 5-03(b)(7), the definition of gross
revenues in Regulation S-X 5-03(b)(1) and paragraph 45 of SFAS
144.
Summary of Significant Accounting Policies
(l) - Revenue Recognition, page 34
5. Expand your disclosure of your revenue recognition policy to
address all the elements necessary for revenue recognition as
discussed in Staff Accounting Bulletin Topic 13, and how these
requirements are applied with respect to your joint venture
advance
distributions. In particular, address the requirement of delivery
under FASB Concepts Statement 5 as it relates to the Minimum
Annual
Distribution that is recoupable against future shares of your Net
Proceeds that you discuss in "Part I, Item 1 - Business" on page
three.
Engineering Comments
Business, page 3
6. Insert a small-scale map showing the location and access to
your
material properties. See Item 102 (3)(B) of Regulation S-K.
Briefly
describe the access to your properties in the text. 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 if you need addition assistance, please call
Filer
Support at 202-942-8900. Otherwise provide the map to the
engineering staff for our review.
7. Disclose:
* The nature of your ownership or interest in your properties,
* Any other underlying agreements or interests in the properties.
* Indicate whether the mining claims are State or Federal claims.
* 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 concessions.
Refer to paragraph (b)(2) of Industry Guide 7.
8. For each of your material properties, provide the disclosures
required by Industry Guide 7 (b). In particular, provide:
* 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.
9. For your Cripple Creek operation, provide a table that
discloses:
* Reserves for the past two years.
* Reconcile differences between the two years, and
* Disclose the reasons for any change from the preceding year.
10. As footnotes or as part of your reserve table, disclose the
following:
* Whether the reserve as stated is an estimate of what can be
economically and legally recovered from the mine and as such
incorporates losses for dilution and mining recovery;
* The metallurgical recovery factor for each category of reserve,
* Gold prices used to estimate your reserves.
11. Disclose the drill spacings used for the reserves and non-
reserve
mineralization you report.
12. Provide a table that discloses the last three years of annual
production, including grade, tonnage and amount of commodity
produced.
13. Supplementally provide an analysis as to why you should
continuing describing your interest in the Cripple Creek mine as a
"joint venture" rather than as a "net profits" interest.
Closing Comments
As appropriate, please amend your filing 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
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 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 filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment 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.
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 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.
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 filing or in
response to our comments on your filing.
You may contact Gary Newberry at (202) 551-3761, Kim Calder,
Assistant Chief Accountant, at (202)-551-3701 or April Sifford,
Branch Chief, at (202) 551-3684 if you have questions regarding
comments on the financial statements and related matters. You may
contact Roger Baer, Mining Engineer, at (202) 551-3705 with
questions
about engineering comments. Please contact me at (202) 551-3740
with
any other questions.
Sincerely,
H. Roger Schwall
Assistant Director
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Mr. R. Herbert Hampton
Golden Cycle Gold Corporation
June 15, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-0405
DIVISION OF
CORPORATION FINANCE
MAIL STOP 04-05