Mail Stop 6010
December 9, 2005
Trevor Sali
President and Chief Executive Officer
Claron Ventures, Inc.
#2-630 2nd Avenue
S7K-2C8 Saskatoon
Saskatchewan, Canada
Re: Claron Ventures, Inc.
Registration Statement on Form SB-2
Filed November 14, 2005
File No. 333-129664
Dear Mr. Sali:
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.
Prospectus
1. As it does not appear that you have "reserves," as defined by
Securities Act Industry Guide 7(a)(1), you must be in the
"exploration stage," defined by Guide 7(a)(4)(i). As such,
Industry
Guide 7 specifically requires that you describe your business
activities as "exploration stage" activities until such time as
your
have "reserves" as defined in the Guide. Please revise your
disclosure on pages 3 and 5 (and elsewhere in the registration
statement, as necessary) to remove any implication that you are
operating a development or production stage company. Industry
Guide
7 can be reviewed on the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.
2. In an appropriate section of the registration statement, please
include disclosure regarding reports to security holders and the
determination of the offering price, and as required by Items
101(c)
and 505(a) of Regulation S-B, respectively.
Prospectus Cover Page
3. We refer to the disclosure in the last sentence of the second
paragraph. Please tell us how you intend the offering to operate
before trades are quoted on the OTC Bulletin Board. Can one
selling
shareholder sell at different prices? Will the post-effective
amendment be filed before the offering at the new price begins?
Will
the selling shareholder wait until the post-effective amendment is
declared effective before the sale at the new price occurs? Will
different selling shareholders sell at different prices? How can
you
have a post-effective amendment for each price a selling
shareholder
wishes to offer?
Prospectus Summary, page 1
4. Prior to the "Summary of the Offering" subsection you should
indicate, if true, that: (i) you are an exploration stage company;
(ii) there is no assurance that a commercially viable mineral
deposit
exists on either of your claims; and (iii) further exploration
will
be required before a final evaluation as to the economic and legal
feasibility is determined. See Industry Guide 7(a)(4).
5. Please disclose the average purchase price paid for the shares
to
be resold by the selling shareholders, as well as the date these
shares were originally acquired.
Risk Factors, page 3
6. The second paragraph implies that your risk factor disclosure
is
incomplete. Please revise to provide complete risk factor
disclosure
and remove any implication to the contrary.
General
7. Throughout this section, and in particular in the risks
described
under the headings "Our operations . . .," on page 4, "The
volatility
of metals prices . . ." on page 5, "our ore reserve estimates . .
.."
on page 6, "mining operations . . ." on page 7 and "The industry
in
which we operate . . ." on page 8, you tend to focus risks related
to
companies in the "production stage" as defined by Industry Guide
7.
Rather than including discussions related to mining operations
that
will not apply to you unless and until you have an operating mine,
provide one new risk factor that (1) includes a concise discussion
of
risks that would apply if you ever commenced actual mining
operations
and (2) makes clear that you have no ongoing mining operations of
any
kind. Your other risk factors should focus of the risks that make
the offering speculative or risky based on your current status.
8. It appears that your assets and personnel are all located in
Canada. If so, please provide appropriate disclosure regarding
the
difficulty that U.S. investors might have enforcing liabilities
under
the U.S. securities laws.
9. We note that you currently have approximately 15,000,000 shares
of
common stock and no shares of preferred stock issued and
outstanding.
If true, please add a risk factor that addresses the fact that
your
Articles of Incorporation authorize the issuance of 100,000,000
shares of common stock and 10,000,000 shares of preferred stock,
that
authorized but unissued shares may be issued without further
shareholder approval and that these shares may be granted rights
and
preferences that are greater than those of common shares being
offered pursuant to this prospectus.
10. Please add a risk factor clarifying that there is currently no
public market for your securities and discuss the risk that such a
public market may never develop.
We rely on key personnel . . ., page 3
11. Unless you can substantiate significant technical training or
experience in minerals exploration or mining by your sole
manager/employee, you must include a risk factor early in this
risk
factor section to state that:
* He lacks technical training and experience exploring for,
starting,
and/or operating a mine.
* Without significant direct training or experience in these
areas,
your management may not be fully aware of many of the specific
requirements related to working within this industry.
* Management decisions and choices may not take into account
standard
engineering or managerial approaches mineral exploration companies
commonly use. Consequently, your operations, earnings, and
ultimate
financial success could suffer irreparable harm due to
management`s
lack of experience in this industry.
Our sole officer and director . . ., page 4
12. Revise to disclose the number of hours per week Mr. Sali
devotes
to your business.
Our operations are subject to currency fluctuations, page 6
13. Revise the first sentence of this risk factor, which currently
implies that you have revenue generating operations.
Our property has not produced any commercial reserves . . . , page
7
14. Unless you can demonstrate to us otherwise, please revise this
risk factor to disclose in plain English the fact that the
probability of an individual prospect ever having "reserves" (that
is
being commercially viable) is extremely remote, that in all
probability your properties do not contain any reserves, and any
funds spent on exploration will probably not be recovered.
Although the company has no reason . . ., page 7
15. Please reconcile the first clause of the risk factor heading
with
the statements in the body of the risk factor that "title may be
affected by undetected defects" and "the precise area and location
of
[your mineral claims] may be in doubt."
Directors, Executive Officers, Promoters and Control Persons, page
9
16. Please revise your disclosure to clarify the business
experience
of Mr. Sali during the past five years.
Indemnification, page 11
17. Please reconcile your statement at the end of the second
paragraph which implies that limited indemnification is available
if
the indemnitee is found liable to you with the statement in the
third
paragraph that no indemnification is available if the indemnitee
is
found liable to you.
Description of Business, page 12
18. Please disclose in an appropriate section of the registration
statement your reasons for incorporating in Nevada when it appears
that all of your assets and business operations are in Canada.
19. Tell us whether you intend to register your securities under
Section 12(g) of the Exchange Act. If not, please add appropriate
disclosure and risk factors to inform investors when you may
discontinue reporting and the effects of not reporting, including
the
effect on the eligibility of transactions in your securities to be
quoted on the Over-the-Counter Bulletin Board.
20. With a view toward clarifying disclosure, please tell us how
the
presence of a "limited amount" of copper supports your statement
on
page 7 that the exploration data is "encouraging." Also, in an
appropriate section of your document, please ensure that you
balance
your disclosure about positive data with any available negative
data.
For example, we note the reference to results that "were not
promising" mentioned on page 6 of exhibit 99.1.
21. Please clarify how and when you acquired the mineral rights.
22. Please explain what you mean by a "cell claim."
23. Disclose the length of each CDN $175 extension.
24. Clarify what you mean by "prospecting."
25. Please expand your disclosure about your exploration plans for
your properties.
* Disclose a brief geological justification for each of your
exploration projects written in non-technical language. For
example,
why is diamond drilling necessary?
* Disclose a breakdown of your exploration timetable, including a
brief outline of all planned phases, or disclose that you have no
current detailed plans to conduct exploration on your property.
* Identify who will be conducting any proposed exploration work.
Provide a balanced discussion of their qualifications.
26. If true, 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.
Need for Government Approval, page 14
27. Please revise to clarify what permits will be required to
conduct
your planned exploration activities. Clarify the requirements for
those permits and why you are unable to state whether you can
obtain
the permits.
Plan of Operation, page 14
28. Please clarify what your operations will be for the next 12
months. For example, it is unclear why the activities listed on
the
bottom of page 12 will take 12 months and why they have not yet
been
started. Also, it is unclear whether those activities represent
the
full extent of needed exploration. Will further drilling,
engineering
studies or other activities be required before you will know
whether
you have a commercially viable mineral deposit? Why?
29. Please describe the exchange controls mentioned on page 6.
Description of Property, page 15
Mineral Rights, page 16
30. Revise to disclose the material terms of all agreements
relating
to your mineral rights and file the agreements as exhibits. Refer
to
paragraph (b)(2) of Industry Guide 7. Please include the
following
in your revised disclosure:
* The nature of your interest in the properties and a brief
description of the term "mineral rights."
* Any conditions that you must meet in order to obtain or retain
title to the property.
* Any royalties, or other underlying agreements or interests in
all
the properties.
* In a table, provide claim or grant number, date of recording and
expiration date, so your claims can be distinguished from other
claims in the area.
31. For your property, provide the disclosures required by
Industry
Guide 7(b). In particular, provide the following:
* The location and means of access to the property.
* A description of the present condition of the property.
* A description of equipment and other infrastructure facilities.
* The source of power that can be utilized at the property.
* If true, a clear statement that the property is without known
reserves.
32. We note your disclosure that "2.129% copper was present" in a
sample taken in connection with a preliminary study conducted on
your
claim grounds. We further note that your geological evaluation
report refers to that sample as "grab" sample. When reporting the
results of sampling and chemical analyses, eliminate all analyses
from "grab" or "dump" samples, unless the sample is of a
substantial
and disclosed weight. You should also refrain from reporting
single
soil sample values. Revise your disclosure accordingly.
33. Please explain why ownership of your claims could be subject
to
other claims as mentioned at the top of page 2. Also explain why
the
claim has not been surveyed as mentioned on page 7 and the extent
of
the doubt about the location.
Financial Statements
34. In the event of a delay of effectiveness, please revise to
provide updated financial statements as required by Item 310 of
Regulation S-B.
35. Please include an updated consent of the independent auditors
with any amendment to the registration statement.
Balance Sheet, page F-2
Note 3 - Related Parties, Page F-7
36. Please tell us why you have included the receivable related to
the issuance of common stock to the sole shareholder as an asset
rather than in shareholders` equity.
Statement of Stockholders` Deficit, page F-4
37. Please revise the statement of stockholders` equity on page F-
4
to agree with the amounts in the balance sheet on page F-2.
Description of Capital Stock, page 18
38. Please revise your disclosure to state, if true, that your
board
of directors may issue common stock and preferred stock with
voting
powers, rights and preferences that differ from and may be
superior
to those of holders of your currently issued common stock. Also
disclose the related anti-takeover effect.
Plan of Distribution and Selling Stockholders, page 19
39. With a view toward disclosure, please tell us whether any
selling
security holder has had a material relationship with you within
the
past three years.
Part II
Item 25. Other Expenses of Issuance and Distribution, page 23
40. We note that you estimate expenses from this offering to be
approximately $51,000. Please provide us with the basis for your
belief stated on page 3 that you can continue your business
operations for approximately the next twelve months with the
approximately $46,000 you had as of the date of the registration
statement.
41. Please tell us whether the offered shares will be freely
tradable
in all states and where you have included the costs for complying
with state securities laws in this item. If the offering will be
limited to particular states, please provide appropriate
disclosure
including any appropriate risk factor regarding any resale
restrictions applicable to purchasers in this offering.
Exhibits
42. Rather than including the technical report filed as exhibit
99.1,
please provide in your prospectus a clear and balanced summary of
the
material provisions of the report. See section (b)(7) of Industry
Guide 7.
Exhibit 23.3
43. In addition to agreeing to being named as an expert in the
registration statement, the exhibit should include a specific
consent
to the summary of the report in the prospectus, not just a vague
grant of permission to use and refer to the report.
* * *
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 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 Act
of
1933 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.
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 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 Praveen Kartholy at (202) 551-3778 or Brian
Cascio, Accounting Branch Chief, at (202) 551-3676 if you have
questions regarding comments on the financial statements and
related
matters. Please contact Donald C. Hunt at (202) 551-3647 or me at
(202) 551-3617 with any other questions.
Sincerely,
Russell Mancuso
Branch Chief
cc (via fax): David M. Loev
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Trevor Sali
Claron Ventures, Inc.
December 9, 2005
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