Mail Stop 3561
July 23, 2018
John Lee
Interim Chief Executive Officer
Prophecy Development Corp.
Suite 1610 - 409 Granville Street
Vancouver, British Columbia
Canada V6C 1T2
Re: Prophecy Development Corp.
Draft Registration Statement on Form 20-F
Submitted June 27, 2018
CIK No. 0001545224
Dear Mr. Lee:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Risk Factors, page 6
Recent and future amendments to Mongolian laws..., page 11
1. Please update the disclosure in this risk factor to indicate whether
there have been any
developments in Mongolian law or regulation affecting your business since
2010,
including the current status of the one remaining license that may
violate the Prohibition
Law.
John Lee
Prophecy Development Corp.
July 23, 2018
Page 2
Conflicts of interest may arise..., page 15
2. Please revise here or elsewhere as appropriate to identify the potential
conflicts of
interest.
Item 4. Information on the Company, page 17
Principal Products, Markets and Marketing, page 20
3. We note you generally discuss supply and demand and vanadium pentoxide
marketing in
this section. Please modify your filing to provide a chart or graph
presenting the 5-year
historical industry pricing for vanadium pentoxide in your targeted
market, e.g. China,
North America, Europe, and include the vanadium pentoxide quality
specifications for
these respective markets. See Item 5.D of Form 20-F.
Government Regulations, page 21
4. Please discuss in greater detail the governmental regulations and the
material effects of
governmental regulations on your business, as required by Item 4.B.8 of
Form 20-F.
Gibellini Project, page 23
5. We note the statement on page 27 that the purpose of the exploration and
verification
drilling program is to "establish a higher-grade starter pit that
accelerates future project
payback ..." In light of the current exploration stage of the company
and lack of
operations to date, please provide the basis for this statement or
remove.
Recent Activities, page 46
6. Please identify the strategic investor.
Directors, Senior Management and Employees, page 56
Term of Office, page 60
7. Please revise to disclose how or when each agreement will terminate. See
Item 6.C.1 of
Form 20-F.
Share Ownership, page 61
8. Please revise footnote one to clarify whether the shares and options
issued to Mr. Lee
include the shares issued in the debt settlement involving Linx, as
discussed on page 64.
If not, please add these shares and options to the table.
John Lee
Prophecy Development Corp.
July 23, 2018
Page 3
Related Party Transactions, page 63
9. We note a number of transactions involving the issuance of common stock
or units to
settle various debt. Please revise to disclose the amount of debt
extinguished and the
individuals involved in each related party transaction.
Exhibits
10. Please file the joint venture agreements relating to the Pulacayo
property or provide your
analysis as to why they are not material.
Financial Statements, page F-1
11. Please include three years of audited financial statements as required
by Items 8.A.2 and
8.A.3 of Form 20-F. See also Question 48 of the JOBS Act FAQ: Generally
Applicable
Questions on Title I of the JOBS Act, located at
https://
www.sec.gov/divisions/corpfin/guidance/cfjjobsactfaq-title-i-general.htm.
Independent Auditor's Report, page F-4
12. Please make arrangements with your auditors to conduct their audit and
prepare their
audit report in accordance with the standards of the Public Company
Accounting
Oversight Board (U.S.). See Instruction 2 to Item 8.A.2 of Form 20-F.
Also, make
arrangements for your auditors to reference International Financial
Reporting Standards
as issued by the International Accounting Standards Board in their
audit report.
Note 6(b). Mineral Properties, page F-15
Note 12. Mineral Properties, page F-24
13. Please disclose the specific types of expenditures recognized as
exploration and
evaluation assets. See paragraphs 9, 23 and 24(a) of IFRS 6. Also,
clarify in your
disclosures whether mineral properties include only exploration and
evaluation assets. If
any other amounts are included in mineral properties, disclose the
information required
by paragraphs 24(b) and 25 of IFRS 6.
John Lee
Prophecy Development Corp.
July 23, 2018
Page 4
You may contact Blaise Rhodes at (202) 551-3774 or Rufus Decker at (202)
551-3769 if
you have questions regarding comments on the financial statements and related
matters. Please
contact George K. Schuler, Mining Engineer, at (202) 551-3718 for engineering
related
questions. Please contact Ronald (Ron) E. Alper at (202) 551-3329 or Pam Howell
at (202) 551-
3357 with any other questions.
Sincerely,
/s/ Pamela Howell
for
John Reynolds
Assistant Director
Office of Beverages,
Apparel and
Mining
cc: James B. Guttman, Esq.
Dorsey & Whitney LLP