Mail Stop 3561
November 23, 2005
James H. Disher, President
Banner Resources Inc.
3990 Warren Way
Reno, NV 89509
Re: Banner Resources Inc.
Amendment One to Registration Statement on Form SB-2
Filed November 14, 2005
File No. 333-128586
Dear Mr. Disher:
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.
1. We note your response to comment 21 in our letter dated October
25, 2005 and the revisions you have made in your Business
disclosure
including the elimination of the glossary in your discussion.
However, you description still has too much jargon for an investor
to
follow. For example, while you define the term induced halo
polarization as "IP," you do not provide a context for the term so
a
reader not familiar with your industry can understand your use of
this term. Another similar example is your use of the jargon "ppm
Cu." Please revise.
Consolidated Financial Statements
2. We note your response to our comment 24 in our letter dated
October 25, 2005. Your audited financial statements as of June
30,
2005 no longer comply with Item 310(g) of Regulation S-B. Please
revise your presentation to update your financial statements to
comply with the requirements of Item 310(g) of Regulation S-B.
Notes to the Consolidated Financial Statements
Note 1. Exploration Stage Company, page F-6
3. We note your response to comment 27 in our letter dated October
25, 2005 regarding your plans to address the going concern issue.
Please revise to include other plans, perhaps such as management
providing loans to the company, if needed, to allow the company to
continue operating. Refer to Section 607.02 of the financial
reporting codification. Please also coordinate with your
independent
registered public accountant to get them to tell us how they have
addressed all of the points in AICPA AU Section 341.10 of the
codification standards, as adopted by the PCAOB.
Note 2. Summary of Significant Accounting Policies, page F-6
4. We note your response to comment 28 in our letter dated October
25, 2005 regarding the valuation method used to determine the
donated
services reflected in your statement of changes in stockholders`
deficit as of June 30, 2005. Please revise your accounting
policies
to include the method used to calculate the amounts for these
donated
services.
Note 3. Mineral Properties, page F-8
5. We note your response to comment 29 in our letter dated October
25, 2005 regarding the specific details relating to your
allocation
of the purchase price for the assets acquired and the terms of the
2.5% royalty fee payable in future periods. Your response is not
clear to us and we are unable to locate a response to most of our
comment. Accordingly, we are reissuing our original comment and
would like a more complete and detailed response. In this regard,
your response should provide the reason for your accounting
treatment
noting your basis in GAAP. You disclose your acquisition of a
100%
interest in seven mineral claims consisting of 70 mineral claim
units
located in Clinton Mining Division, British Columbia, Canada for
320,000 shares of your common stock. Please disclose your
purchase
price allocation of the cost of the assets acquired. Please also
explain to us the nature and terms of the 2.5% royalty fee and who
it
is payable to and your accounting treatment for these fees at the
time of acquisition of the assets and your basis in GAAP for this
treatment. Further, please also provide us support for your
accounting treatment of the contingent consideration of $25,000
annual advance royalties commencing February 1, 2008. Is the
$25,000
a fixed amount, or will the amount of the fee vary according to
revenue volume or another similar operating measure? How long
will
you have to pay the $25,000 fee and does the annual fee
effectively
represent a compensation arrangement for the prior owner of the
mineral claims? Explain to us how these royalties differ from the
2.5% Net Smelter Return royalty. Tell us your calculation of the
total cost of the acquired assets and why. Refer to paragraphs 20
through 23, and paragraphs 25 through 28 of SFAS 141.
Item 27. Exhibits Index, page 55
6. We note your footnote reference (1) on page 56 regarding the
consent of the independent registered public accounting firm that
was
filed on September 26, 2005. Please coordinate with your
independent
registered public accountant to revise your presentation to
include
the filing of a currently dated consent relating to the use of
their
audit report dated September 13, 2005 with your next amendment as
required by Item 601(a)(23) of Regulation S-B.
*****
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 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 Milwood Hobbs, Staff Accountant, at (202)
551-
3241 or in his absence, Mike Moran, Accounting Branch Chief, at
(202)
551- 3841 if you have questions regarding comments on the
financial
statements and related matters. Please contact Scott Anderegg,
Staff
Attorney, at (202) 551-3342 or me at (202) 551-3720 with any other
questions.
Sincerely,
H. Christopher Owings
Assistant Director
cc: David Smalley
Fraser and Company LLP
Via Fax (604) 669-5791
James H. Disher
Banner Resources Inc.
November 23, 2005
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