David Lubin & Associates
92 Washington Avenue
Cedarhurst, NY 11516
Telephone: (516) 569-9629
Facsimile: (516) 569-5053
January 21, 2005
Securities and Exchange Commission
Division of Corporate Finance
450 Fifth Street, N.W.
Washington, D.C. 20549-0406
Attention: Mary Cascio, Special Counsel
Re: American Goldrush Corporation Form F-l filed
November 23,2004 File No. 333-120722
Ladies and Gentlemen:
American Goldrush Corporation (the "Company") herewith files with the
Securities and Exchange Commission (the "Commission") an amended registration
statement on Form F-1/A (the "Amended Registration Statement") in response to
the Commission's comments, dated December 22, 2004 (the "Comment Letter"), with
reference to the Company's registration statement on Form F-1 (the "Registration
Statement") filed with the Commission on November 23, 2004, file number
333-120722.
The Company appreciates your review in assisting it to enhance the
overall disclosure in its Registration Statement. In addition to filing the
Amended Registration Statement on Form-1/A, the Company supplementally responds
to all the Commission's comments as follows:
General
1. Comment: Supplementally advise us as to whether you intend to use additional
sales material, in addition to the prospectus, to sell Class A, B, and C
warrants. If this is the case, please provide the staff with copies of any sales
literature you intend to use, prior to use. These materials are subject to our
review and comment.
Response: The Company does not intend to use any sales materials to sell Class
A, B and C warrants other than the prospectus. The Company also acknowledges
that the information contained in the prospectus must be current if it is to be
used as sales material for a warrantholder to exercise the Class A, B and C
warrants.
2. Comment: Please provide us with the artwork you intend to use. The inside
front cover artwork should be clear illustrations of your product or business
with concise language describing the illustrations. Artwork that does not convey
the business purpose and language that strays beyond a limited scope will not be
appropriate inside the front cover. Please refer to Section VIII of the Division
of Corporation Finance March 31, 2001 Current Issues and Rulemaking Projects
Quarterly Update available at www.sec.gov.
Response: The Company does not intend to utilize any artwork. If the Company
decides to use any artwork, it will provide the Commission with the artwork it
intends to use.
3. Comment: Please identify all selling shareholders who are registered
broker-dealers or affiliates of broker dealers. Additionally, tell us if the
broker-dealer received the securities as underwriting compensation. Please note
that a registration statement registering the resale of shares being offered by
broker-dealers must identify the broker dealers as underwriters if the shares
were not issued as underwriting compensation.
Response: None of the selling shareholders in the Company are registered
broker-dealers or affiliates of broker-dealers. The second sentence of the first
paragraph of the section entitled "Selling Security Holders" in the Registration
Statement contains such disclosure.
4. Comment: We note that the courtesy copy you provided us was not paginated and
that the margins of some of the sections were fully justified, resulting in odd
spacing between letters in words and a document that in places is more difficult
to read than it should be. See, for example, the risk factor headings for risk
factors 4, 5 and 10. Please confirm that the versions you provide to investors
will be paginated and properly justified.
Response: The Amended Registration Statement, and the version to be provided to
investors, will be paginated and the margins left justified as required
Prospectus Summary, page 1
5. Comment: We note in the introductory paragraph to this section and you state
that this section is not complete, that there may be information that you may
not have included in this section. Please disclose all information that you
believe is material at this time. Otherwise, delete this language from your
introductory paragraph.
Response: The Company has deleted the language from the introductory paragraph
of the prospectus summary in the Amended Registration Statement in accordance
with the Commission's comments. The Company believes that the Prospectus Summary
contains a sufficient summary of all material information contained in the
prospectus.
Description of Financing Transactions, page 3
6. Comment: Please provide the specific exemption that you relied on for each of
your private placements from October 2003 to date.
Response: The Company has revised the Amended Registration Statement to provide
that the two private placements were each exempt from the registration
requirements of the Securities Act of 1933, as amended, by virtue of Regulation
S promulgated thereunder.
Trading Market, page 3
7. Comment: We note that you intend to apply to the OCTBB in this section and in
your risk factor section. Please tell us on a supplemental basis, the status and
timing of your application with the OTCBB.
Response: As of the date of this letter, the Company has not selected a market
maker to file a Form 15c-211 to have the shares of the Company listed on the
OTCBB. The Company does not intend to be listed on the OTCBB until it is a
reporting company.
Risk Factors, page 5
8. Comment: Please revise your risk factor section to avoid language like
"adverse effect" or "adversely affect" State specifically how the risk may
affect your results of operations or financial condition.
Response: The Company has made the proper revisions to the Registration
Statement's risk factors section in its Amended Registration Statement in
accordance with the Commission's comments.
9. Comment: Please revise your risk factors to remove the phrase "we cannot
assure" or "there can be no assurance" regarding a certain set of facts. The
real risk is that the event will occur; it is not your inability to prevent it.
Response: The Company has made the proper revisions to the Registration
Statement's risk factors section in its Amended Registration Statement in
accordance with the Commission's comments.
10. Comment: We note that your risk factors, for the most part, could apply to
any company within your industry classification. Please specifically tailor your
risks so that they apply to your company in particular.
Response: The Company has added some risk factors that apply specifically to the
Company as well as amending some of the risk factors so that the reader knows
that they specifically apply to the Company.
11. Comment: If material, provide a risk factor that addresses the possibility
that you may be deemed a Passive Foreign Investment Company. Briefly explain
that U.S. investors who invest in American Goldrush Corporation will be subject
to U.S. taxation at possibly adverse or higher rates and under a system that may
be more complicated and unfamiliar to them.
Response: The Company has included a risk factor addressing the possibility that
it may be deemed a PFIC and the related risks to U.S. investors.
12. Comment: Include a risk factor which addresses the fact that it would be
difficult for investors to: * Effect service of process within the United States
on you or any of your non-U.S. resident executive officers or directors named in
your registration statement; * Enforce judgments obtained in U.S. courts based
on the civil liability provisions of the U.S. federal securities laws against
you or any of your non-U.S. resident executive officers or directors you have
named in your registration statement; * Enforce judgments of U.S. courts based
on civil liability provisions of the U.S. federal securities laws in the
Canadian court against you or any of your non-U.S. resident executive officers
or directors named in your registration statement; and * Bring an original
action in the Canadian court to enforce liabilities based on the U.S. federal
securities laws against you or any of your non-U.S. resident executive officers
or directors named in your registration statement.
Response: The Company has amended the Registration Statement's risk factors
section in its Amended Registration Statement to include a risk factor
concerning the issue of effecting service of process, enforcing judgments and
bringing actions against non-U.S. resident executive officers and directors in a
foreign court.
If we do not continue to make payments under our Property Options Agreement...
page 6
13. Comment: Please state in this risk factor the reason(s) why you must pay Mr.
Polischuk CDN$50,000 and by what date you must pay the entire amount. If you
plan on making payments over a period of time or on a lump sum basis, please
disclose the schedule of payments or the anticipated payment date. In addition,
please provide a cross-reference to a more detailed information regarding this
option agreement.
Response: The Company has made the proper revisions to this section of the
Registration Statement in its Amended Registration Statement in accordance with
the Commission's comments.
Damage to the environment could also result from our operations, page 7
14. Comment: Delete the clause beginning "although we intend to substantially
comply" as it serves to mitigate the risk being discussed.
Response: The Company has deleted the language in accordance with the
Commission's comments in its Amended Registration Statement.
We may not have access to all of the supplies and materials we need to begin,...
page 10
15. Comment: We note that you will attempt to locate products, equipment and
materials AFTER THIS OFFERING IS COMPLETE. Please disclose why you are
attempting to locate the materials needed after this offering is completed.
Response: The Company has deleted the phrase "after the offering is complete"
and revised the language in this section to disclose the fact that the Company
cannot compete with larger companies for supplies and manpower. Further, we
disclose that if prices for such resources increase beyond its financial limits,
the Company may be forced to limit its exploration activities.
It is possible that there maybe native or aboriginal claims to our property....
page 10
16. Comment: Please tell us, on a supplemental basis, the measures that were
taken to ensure that the title is without any known defects.
Response: The Company consulted with the Government of British Columbia Treaty
Negotiations Office. Although Native and aboriginal groups have made extensive
land claims to large areas of land within British Columbia, the status of such
claims is uncertain and has not been resolved despite lengthy and expensive
court proceedings. According to the Government of British Columbia Treaty
Negotiations Office, the land area where the Company's claims are located has
not been part of any completed land claims agreements. The title to the mining
claims optioned by the Company has been registered with the Province of British
Columbia, Ministry of Energy and Mines, Titles Division, and to the best of the
Company's, there are no known defects or encumbrances on the land.
Capitalization, page 13
17. Comment: Please provide the information about indebtedness and distinguish
between secured and unsecured as required by Item 3.B. of Form 20-F.
Response: Although the Company has only current unsecured liabilities, the
Company has included the information about indebtedness in the Amended
Registration Statement.
Regulation and Environmental Matters, page 14
18. Comment: Provide a discussion of the specific governmental rules and
regulations, including federal, provincial and local government rules and
regulations, that impact your business activities. For example, if a permit is
required for you to conduct any exploratory activities,, please discuss the
requirements for the permit, whether you have obtained such a permit or the
status of your application for the permit and the regulatory body responsible
for granting the permit Additionally, include a discussion of environmental
regulations, which impact your operations, We may have further comments. See
Item 4.B.8 of Form 20-F.
Response: The Company has revised this section of the Registration Statement in
its Amended Registration Statement to include a discussion of the only Canadian
governmental authority as well as environmental regulations impacting the
Company's business.
Property Option Agreement for the Polischuk Property, page 14
19. Comment: Please provide the specific date as to when the option that you
have secured will expire. In addition, provide a summary of the termination
provisions in the contract.
Response: The Property Option Agreement was amended since the date of the
initial filing of the Registration Statement. The Amended Registration Statement
contains a description of the agreement, as amended, as well as the specific
date as to when the option will expire and a summary of the termination
provisions.
Material Contracts, page 16
20. Comment: We note that you have an irrevocable option with Messrs. Blomkamp
and Praill and that you must provide notice to each individual when you decide
to purchase any or all of their shares. Please disclose the period of time that
must elapse in order to maintain sufficient notice. In addition, are there any
triggering events that may cause the redemption by the Company.
Response: The Company has included the applicable time period if it determines
to exercise its option. Please note that there are no triggering events that
would cause the shares to be redeemed by the Company.
Employees, page 17
21. Comment: Please disclose the kind of services your outside contractors
provide to the Company.
Response: The Company has made the proper revisions to its Registration
Statement in its Amended Registration Statement in accordance with the
Commission's comments.
Management. page 25
22. Comment: Please provide a more detailed description, including time periods
employed in various positions, for the recent business experience of each of the
directors and senior management.
Response: The Company has made the proper revisions to its Registration
Statement in its Amended Registration Statement in accordance with the
Commission's comments.
Executive Compensation, page 27
23. Comment: Please discuss the consulting agreement with Tricia Dennis and the
material termination provisions.
Response: The Company has added the fact that it can terminate said consulting
agreement at any time without any additional payment to Ms. Dennis in accordance
with the Commission's comments.
Potential Conflicts of Interest page 28
24. Comment: We note that your president and other directors work; for other
natural resource exploration companies. We note that you have some factors to
limit the potential conflicts of interest. Please disclose any conflicts of
interest that have occurred in the past with any of your executive officers,
management, and/or board members.
Response: The Company is not aware of any current or potential conflicts of
interest with any of the Company's executive officers or directors, except as
otherwise stated in its Amended Registration Statement. It is typical in the
mining industry that consultants work for several exploration companies
simultaneously.
Exchange Controls, page 36
25. Comment: The discussion in this section should concern whether or not Canada
has any controls limiting, prohibiting or otherwise affecting the exchange of
Canadian dollars for U.S. dollars and other currencies, not the taxation of
dividends. Please revise.
Response: The Company has made the proper revisions to its Registration
Statement in its Amended Registration Statement in accordance with the
Commission's comments.
Experts, page 39
26. Comment: Please identify Morton &. Company as your legal counsel who has
opined on your common shares.
Response: Morton & Company is identified as legal counsel to thee Company who
has opined to the shares as indicated in the Legal Matters section of the
Amended Registration Statement.
Expenses of Issuance and Distribution, page 32
27. Comment: We note the SEC registration fee you disclose in this section is
not the same amount as the total SEC registration fee you reflect on your cover
page. Please explain.
Response: That was a typographical error and the Company has revised the amount
of registration fee in the table to disclose the proper amount of registration
fee in accordance with the Commission's comments in its Amended Registration
Statement.
Exhibit 5.1
28. Comment: Please provide the reason why you have referred to 601(b)(5) of
Regulation S-B in your legality opinion; otherwise please delete the citation.
Response: Reference to 601(b)(5) of Regulation S-B has been removed from the
opinion in the Amended Registration Statement.
Engineering Comments
General
29. Comment: The maps illustrating the location and access to your property
occupies a small portion of the viewable area loaded into the SEC's EDGAR
program. This may allow the average investor or viewers to bypass the map
displays, believing they are viewing blank fields. Please modify the viewable
area to clearly display the maps for the average investor. For more information,
please consult the EDGAR manual, and if you need additional assistance, please
call Filer Support at 202-942-8900.
Response: The Company has made changes to the maps in accordance with the
Commission's comments in its Amended Registration Statement
Risk Factors, page 5
30. Comment: Add a risk factor addressing the fact that your property has not
been examined in the field by a professional geologist or mining engineer.
Discuss the risks to investors.
Response: The Company has amended the risk factor section of its Registration
Statement in its Amended Registration Statement to include a risk factor that
the property has not been examined in the field by a professional geologist or
mining engineer in accordance with the Commission's comments.
Description of business, page 14
31. Comment: Discuss the phased nature of the exploration process, and the place
in the process your current exploration activities occupy. 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.
Response: The Company has included in its Amended Registration Statement
disclosure concerning the Company's exploration process in accordance with the
Commission's comments.
Property option agreement for the Polischuk property, page 15
32. Comment: The fourth paragraph on page 15 references the "Pioneer" and
"Bralorne" mines. Describe only geology, history, or exploration results that
are directly related to the properties that you have the right to explore or
mine. Remove all references to mines, adjacent or analogous properties,
deposits, occurrences, or exploration activities by other companies outside of
your properties.
Response: The Company has made the deletions and revisions to this section of
the Registration Statement in its Amended Registration Statement in accordance
with the Commission's comments.
33. Comment: The first paragraph of page 16 uses the terms "reserve(s)" and
"develop" which have very specific meanings under Industry Guide 7(a)(4), (see
http://www.sec.gov/divisi.ons/corpfin/fonns/industrv.htmiiitsecguide7). These
terms reference the "development stage" when companies are engaged in preparing
reserves for production, and the "production stage" when companies are engaged
in commercial-scale, profit-oriented extraction of minerals. If you do not have
any "reserves," as defined by Guide 7, please remove the terms "reserve(s)"and
"develop" throughout the document. Replace or delete the terms as needed. This
includes the use of the terms in the Financial Statement headnotes and footnotes
- - see Instruction 1 to paragraph (a), Industry Guide 7.
Response: The Company has made the proper deletions and revisions to the
Registration Statement in its Amended Registration Statement in accordance with
the Commission's comments.
34. Comment: The fifth paragraph of page 17 uses the terms "ore(s)", "ore
deposit(s)," and "ore body(s)". Under SEC Industry Guide 7, the terms "ore(s)'3
"ore deposit(s),"or "ore body(s)" are treated the same as the term "reserve."
Since all deposits are not necessarily reserves, remove these terms from this
filing.
Response: The Company has made the proper deletions and revisions to the
Registration Statement in its Amended Registration Statement in accordance with
the Commission's comments.
The Company respectfully submits via EDGAR the foregoing responses to
the Commission and the Amended Registration Statement on Form F-1/A as requested
by the Commission. Please note that we are also submitting via courier three (3)
copies of a redline version showing changes from the initial filing of the
Company's Registration Statement on Form F-1 in order to help expedite the
review process.
Please address any further questions or comments to the undersigned at
the above-referenced telephone and fax numbers. Thank you very much.
Very truly yours,
/s/ David Lubin
David Lubin
Cc: Ron Blomkamp