UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 7010
November 30, 2005
Mr. Laurence Stephenson
Chief Executive Officer
Sutcliffe Resources Ltd.
625 Howe Street, Suite 420
Vancouver, British Columbia, Canada V6C 2T6
Re: Sutcliffe Resources, Ltd.
Registration Statement on Form 20-F
Filed October 13, 2005 and amended October 31, 2005
File No. 0-51570
Dear Mr. Stephenson:
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 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.
We remind you that the Form 20-F registration statement
becomes
effective automatically under the Exchange Act 60 days from
October
13, 2005, the date you first filed it. The Exchange Act reporting
requirements become operative at that time.
Form 20-FR amendment 1
General
1. Where comments on one section also relate to disclosure in
another
section, please make parallel changes to all affected disclosure.
This will eliminate the need for us to repeat similar comments.
2. Eliminate the excessive use of technical language. For
example, on
page 17 you indicate the following: "The Harrison Lake property is
a
belt of ultramafic (igneous rock...) and metacolcanics and
metasediments...." If necessary define technical terms in context
or,
if not practicable, include a glossary defining such terms.
3. We note your disclosure on page 16 regarding 606896 B.C. Ltd.
and
International Millennium Mining Corporation. Please describe for
us
your dealings with these two entities. We may have further
comments.
4. We also note your disclosure on page 14 regarding the two cease
trade orders that were issued against you in 2000. Please tell
us, in
necessary detail, why the orders were issued. We may have further
comments.
5. We note that you sold securities in private placements. Advise
us
whether any of such private placements took place in the United
States, and, if so, disclose the exemption from registration upon
which you relied.
Forward-Looking Statements, page 3
6. Revise the reference to the Private Securities Litigation
Reform
Act. Note that you cannot rely on the safe harbor provided by the
PSLRA because you are subject to the "penny stock" rules of the
Securities Exchange Act of 1934.
Key Information
Exchange Rates, page 7
7. Update the rates table to the latest practicable date.
Risk Factors, page 8
8. Eliminate language that mitigates the risk you present. State
the
risk directly and plainly, eliminating statements such as "there
can
be no assurance." Also, revise risk factor subheadings so that
they
clearly identify the risk to be discussed. Several of your risk
factor captions are too vague and generic to adequately describe
the
risk that follows.
9. We note that you appear to have a going concern risk. Please
add a
separate risk factor that relates to the issue of your ability to
continue to operate as a going concern.
10. We note your disclosure on page 35 regarding securities that
you
have issued, including escrow shares, options, and warrants.
Please
discuss in a risk factor the dilutive effect of such securities.
11. It appears that none of your officers and directors devotes
100%
of their professional time to your operations. We also note your
disclosure regarding your lack of employees. Discuss in a risk
factor
how this situation affects your ability to operate as a business.
Operating and Financial Review and Prospects, page 18
Liquidity and Capital Resources, page 22
12. We note your disclosure regarding a $30,909 note due from a
related party. It appears that this is the type of transaction
that
would need to be included in the Related Party Transaction section
on
page 32. Please revise.
Directors, Senior Management and Employees, page 25
13. Disclose the amount of time that each named individual devotes
to
your operations.
Compensation, page 27
14. You indicate that the table only includes your president and
chief
executive officer`s compensation because the compensation of your
other executive officers does not exceed $100,000. Please note
that
Item 6.B. of Form 20-F requires you to disclose the compensation
of
your directors and officers regardless of the compensation amount.
Revise your compensation table accordingly.
Major Shareholders and Related Party Transactions
Significant Changes in Major Shareholders` Holdings, page 31
15. In response to this item, you have provided a cross-reference
to
Item 6.E. Share Ownership and Table No. 9. However, these
sections do
not appear to provide the information required by Item 7.A.1(a) of
Form 20-F. Please revise to include the required information.
Additional Information, page 35
16. We note your disclosure on page 73 regarding your issuance of
3,000,000 flow-through shares. Describe the characteristics of
the
flow-through shares so that the reader may better understand the
nature of the security.
Controls and Procedures, page 45
17. This section indicates that "[t]here have been no significant
changes in the Company`s internal controls or the occurrence of
event
or other factors that could significantly affect these controls."
Revise to comply with Item 15 of Form 20-F. Specifically,
disclose
whether there have been "any changes," as opposed to "significant
changes." Consult the last paragraph of section II.J. found in
Release
No. 33-8238 for additional guidance. Further, revise this section
to
address change(s) that "materially affect, or is reasonably likely
to
materially affect," rather than "significantly affect" the
Company`s
internal control over financial reporting.
Audit Committee Financial Expert, page 45
18. Disclose whether or not the financial expert that has been
identified by your audit committee is independent.
Auditors` Report, page 50
19. We note the inappropriate indication that the financial
statements
are presented in accordance with U.S. GAAP. The opinion paragraph
should specify that the financial statements are presented in
accordance with Canadian GAAP, consistent with disclosures
elsewhere
in the financial statements and at other locations in your filing.
Please ask your auditor to call us to discuss this comment before
you
respond to this letter.
20. Include an updated auditors` consent under Item 10:G of Form
20-F
with your amended filing.
21. It is unclear whether the audit was conducted in accordance
with
Canadian auditing standards as well as the standards of the Public
Company Accounting Oversight Board (United States). If
applicable,
the second and fourth paragraphs of the auditor`s report will be
impacted. See AuG-21.
Financial Statements
General
22. The comments below are applicable to the audited financial
statements and the unaudited interim June 30, 2005 financial
statements.
Mineral Property Acquisition Costs
23. Based on disclosures in Notes 3.c) and 11.g), it appears that
you
are not treating mineral property acquisition costs as tangible
assets
for U.S. GAAP purposes as called for by EITF 04-2. Please tell
how
you account for these costs for U.S. GAAP and provide us with
details
of these costs for the reporting periods after the implementation
date
of
EITF 04-2.
United States Accounting Principles - Note 11
24. Please expand Note 11 to include an explanation of the
difference
between Canadian and US GAAP in accounting for income taxes.
Please
note that US GAAP requires the recordation of deferred tax assets
and
an offsetting allowance if the asset is not expected to be
realized.
25. Please revise Note 11 to include disclosure that mineral
property
exploration costs are classified as operating cash flows under US
GAAP
rather than investment cash flows under Canadian GAAP. Include a
reconciliation of Canadian GAAP operating and investing cash flows
to
US GAAP amounts.
Engineering Comments
General
26. To the extent that the company 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."
27. For the property, provide the disclosures required by Industry
Guide 7 (b). In particular, provide:
* The location, means of access to the property, and
transportation
from the property.
* A brief description of the rock formations and mineralization of
existing or potential economic significance on the property.
* A description of any work completed on the property and its`
present
condition.
* The details as to modernization and physical condition of the
plant
and equipment, including subsurface improvements and equipment.
* Provide a description of equipment and other infrastructure
facilities.
* The current state of exploration of the property.
* The total cost of the property has incurred to date and planned
future costs.
* The source of power and water 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.
28. Insert a small-scale map showing the location and access to
the
property. Note that SEC`s EDGAR program now accepts digital maps,
so
please include these maps 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 addition assistance is
required, please call Filer Support at 202-942-8900. Otherwise,
provide the map to the staff for review.
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 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 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 John Weitzel at (202) 551-3731 or, in his
absence, Barry Stem, Senior Assistant Chief Accountant, at (202)
551-
3763 if you have questions regarding comments on the financial
statements and related matters. Direct your questions relating to
the
engineering comments to George Schuler, Mining Engineer, at (202)
551-
3718. Please contact Carmen Moncada-Terry at (202) 551-3687 or,
in
her absence, the undersigned at (202) 551-3707 with any other
questions.
Sincerely,
H. Roger Schwall
Assistant Director
cc: J. Weitzel
B. Stem
G. Schuler
C. Moncada-Terry
Mr. Laurence Stephenson
Sutcliffe Resources, Ltd.
November 30, 2005
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