[LETTERHEAD OF DILL DILL CARR STONBRAKER & HUTCHINGS, PC]
Christopher W. Carr
Daniel W. Carr
John J. Coates
Kevin M. Coates
H. Alan Dill
455 Sherman Street, Suite 300 Robert A. Dill
Denver, Colorado 80203 Thomas M. Dunn
Phone: 303-777-3737 John A. Hutchings
Fax: 303-777-3823 Stephen M. Lee
www.dillanddill.com Fay M. Matsukage*
Robert S. McCormack
Dean M. Smurthwaite
Adam P. Stapen
Jon Stonbraker
Patrick D. Tooley
*Also licensed in Nevada
July 6, 2007
Karl Hiller
Branch Chief
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: HALO RESOURCES LTD.
FORM 20-F FOR THE FISCAL YEAR ENDED AUGUST 31, 2006
FILED MARCH 15, 2007
FILE NO. 0-30196
Dear Mr. Hiller:
On behalf of Halo Resources Ltd. (the "Company"), Amendment No. 1 to Form 20-F
for the Fiscal Year Ended August 31, 2006 is being filed.
The comments of the Staff in its letter dated April 25, 2007, have been
addressed in this filing pursuant to your request. The comments are set forth
below, together with the Company's responses regarding the revised disclosure.
To assist the staff in its review of this Amendment, we are sending a hard copy
of this letter, together with a hard copy of the Amendment, marked to show all
of the changes.
FORM 20-F FILED MARCH 15, 2007
CONTROLS AND PROCEDURES, PAGE 97
1. WE NOTE YOUR DISCLOSURE STATING THAT YOUR OFFICERS HAVE CONCLUDED THAT
CERTAIN WEAKNESSES EXISTED IN THE COMPANY'S INTERNAL CONTROLS OVER
FINANCIAL REPORTING THAT MUST BE CORRECTED IN ORDER FOR THE COMPANY'S
DISCLOSURE CONTROLS AND PROCEDURES TO BE EFFECTIVE. PLEASE AMEND YOUR
FILING TO COMPLY WITH ITEM 15(A) FORM 20-F WHICH REQUIRES YOUR
PRINCIPAL EXECUTIVE OFFICERS TO DISCLOSE THEIR CONCLUSIONS REGARDING
EFFECTIVENESS OF THE COMPANY'S DISCLOSURE CONTROLS AND PROCEDURES AS OF
THE END OF THE PERIOD COVERED BY THE REPORT. IN THIS REGARD, IT APPEARS
FROM THE WEAKNESSES IDENTIFIED IN YOUR DISCLOSURE UNDER THIS HEADING
THAT YOU WOULD CONCLUDE YOUR DISCLOSURE CONTROLS AND PROCEDURES WERE
INEFFECTIVE AS OF DECEMBER 31, 2006.
RESPONSE: THE COMPANY'S DISCLOSURE UNDER "ITEM 15. CONTROLS AND
PROCEDURES" WAS MADE IN ACCORDANCE WITH CURRENT DISCLOSURE REQUIREMENTS
UNDER CANADIAN NATIONAL INSTRUMENT
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 2
52-109 "CERTIFICATION OF DISCLOSURE IN ISSUER'S ANNUAL AND INTERIM
FILINGS". THE MANAGEMENT OF THE COMPANY HAS CONCLUDED THAT THE
COMPANY'S DISCLOSURE CONTROLS AND PROCEDURES ARE EFFECTIVE. ITEM 15.
HAS BEEN AMENDED AS FOLLOWS:
"AN EVALUATION WAS PERFORMED UNDER THE SUPERVISION AND WITH THE
PARTICIPATION OF THE COMPANY'S MANAGEMENT, INCLUDING MR. CERNOVITCH,
THE COMPANY'S CURRENT CHAIRMAN AND FORMER CEO, AND MR. DEMARE, THE
COMPANY'S CFO, OF THE EFFECTIVENESS OF THE DESIGN AND OPERATION OF THE
COMPANY'S DISCLOSURE CONTROLS AND PROCEDURES PURSUANT TO RULES
13A-15(B) AND 15D-15(B) OF THE SECURITIES EXCHANGE ACT OF 1934 (THE
"EXCHANGE ACT") AS OF AUGUST 31, 2006. BASED UPON THAT EVALUATION,
MESSRS. CERNOVITCH AND DEMARE HAVE CONCLUDED THAT THE COMPANY'S
DISCLOSURE CONTROLS AND PROCEDURES ARE EFFECTIVE TO ENSURE THAT
INFORMATION REQUIRED TO BE DISCLOSED BY THE COMPANY IN REPORTS THAT IT
FILES OR SUBMITS UNDER THE EXCHANGE ACT IS RECORDED, PROCESSED,
SUMMARIZED AND REPORTED WITHIN THE TIME PERIODS SPECIFIED IN SECURITIES
AND EXCHANGE COMMISSION'S RULES AND FORMS.
THERE HAVE NOT BEEN ANY CHANGES IN THE COMPANY'S INTERNAL CONTROL OVER
FINANCIAL REPORTING THAT OCCURRED DURING THE PERIOD COVERED BY THIS
FORM 20-F THAT HAVE MATERIALLY AFFECTED, OR ARE REASONABLY LIKELY TO
MATERIALLY AFFECT, THE COMPANY'S INTERNAL CONTROL OVER FINANCIAL
REPORTING. "
FINANCIAL STATEMENTS
NOTE 5 - UNPROVEN MINERAL INTERESTS, PAGE F-10
2. WE ARE UNABLE TO RECONCILE THE TOTAL AMOUNTS OF ACQUISITION AND
DEFERRED EXPLORATION COSTS IN THE TABLE UNDER THIS HEADING TO THE
NARRATIVE DISCLOSURES OF EACH OF YOUR PROPERTIES FOR THE YEARS
PRESENTED IN THE TABLE. PLEASE REVISE YOUR DISCLOSURES ACCORDINGLY.
RESPONSE: THE UNPROVEN MINERAL INTERESTS TABLE REFLECTS COSTS INCURRED
AS OF AUGUST 31, 2006 AND 2005. THIS TABLE IS NOT INTENDED TO RECONCILE
TO THE ADDITIONAL NOTE DISCLOSURES, WHICH ARE PROVIDED MAINLY TO
DESCRIBE THE COMPANY'S SIGNIFICANT PROPERTIES AND COMMITMENTS. THERE IS
ALSO A FURTHER "SCHEDULE OF UNPROVEN MINERAL INTERESTS" PROVIDED IN THE
COMPANY'S FINANCIAL STATEMENTS. THIS IS STANDARD DISCLOSURE FOR JUNIOR
MINERAL EXPLORATION COMPANIES UNDER CANADIAN GAAP.
NOTE 10 - INCOME TAXES, PAGE F-18
3. WE NOTE THAT YOU HAVE RECOGNIZED A DEFERRED TAX ASSET FOR NET OPERATING
LOSS CARRYFORWARDS. PLEASE TELL US HOW YOU HAVE REACHED THE CONCLUSION
THAT IT IS MORE LIKELY THAN NOT THAT YOU WILL RECOGNIZE THIS TAX
BENEFIT IN FUTURE PERIODS GIVEN YOUR CURRENT OPERATIONS. INCLUDE WITHIN
YOUR RESPONSE DETAIL OF THE MATERIAL ASSUMPTIONS UNDERLYING
MANAGEMENT'S DETERMINATION THAT THE DEFERRED TAX ASSET WILL BE
REALIZED.
RESPONSE: SECURITIES REFERRED TO AS FLOW-THROUGH SHARES ARE COMMONLY
ISSUED BY ENTERPRISES CONDUCTING MINING EXPLORATION IN CANADA. UNDER
CANADIAN TAX LEGISLATION THE ENTERPRISE IS PERMITTED TO ISSUE
FLOW-THROUGH SHARES AND THE DEDUCTIONS FOR TAX PURPOSES
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 3
RELATING TO RESOURCE EXPENDITURES MAY BE CLAIMED BY THE INVESTORS AND
NOT BY THE ENTERPRISE.
THE RELEVANT CANADIAN GUIDANCE IN ACCOUNTING FOR FLOW-THROUGH SHARES IS
EMERGING ISSUES COMMITTEE # 146 ("EIC 146") - FLOW-THROUGH SHARES.
TYPICALLY JUNIOR RESOURCE ENTERPRISES HAVE SIGNIFICANT UNRECOGNIZED
FUTURE INCOME TAX ASSETS AS A RESULT OF APPLYING THE MORE LIKELY THAN
NOT CRITERIA. THE ISSUANCES OF FLOW-THROUGH SHARES GIVE RISE TO A
TAXABLE TEMPORARY DIFFERENCE. THE TAXABLE TEMPORARY DIFFERENCES ARE
EXPECTED TO REVERSE DURING THE LOSS CARRYFORWARD PERIOD AND AS SUCH A
PORTION OF THE UNRECOGNIZED FUTURE INCOME TAX ASSETS CAN BE APPLIED
AGAINST THE FULL TAXABLE TEMPORARY DIFFERENCE. THIS RESULTS IN THE
ENTERPRISE RECOGNIZING A PORTION OF ITS UNRECOGNIZED FUTURE TAX ASSETS
BY REVERSING A VALUATION ALLOWANCE. THIS REVERSAL IS RECOGNIZED AS A
CREDIT IN THE INCOME STATEMENT.
UNDER STATEMENT 109, FASB STAFF HAS TAKEN THE VIEW THAT WHEN SHARES ARE
ISSUED THE PROCEEDS SHOULD BE ALLOCATED BETWEEN THE OFFERING OF SHARES
AND THE SALE OF TAX BENEFITS WHICH RESULTS IN THE RECOGNITION OF A
LIABILITY. THE LIABILITY IS REVERSED WHEN THE TAX BENEFITS ARE
RENOUNCED AND A DEFERRED TAX LIABILITY IS RECOGNIZED AT THAT TIME.
INCOME TAX EXPENSE (RECOVERY) IS THE DIFFERENCE BETWEEN THE AMOUNT OF
THE DEFERRED TAX LIABILITY AND THE LIABILITY RECOGNIZED ON ISSUANCE.
THIS RESULTS IN A REVERSAL OF THE VALUATION ALLOWANCE ALTHOUGH THE
CALCULATION MAY DIFFER FROM CANADIAN GAAP.
THE RECONCILING DIFFERENCES HAVE BEEN ACCOUNTED FOR IN NOTE 17(a)(v).
NOTE 17 - DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED
ACCOUNTING PRINCIPLES, PAGE F-23
(i) UNPROVEN MINERAL INTERESTS, PAGE F-24
4. WE NOTE YOUR DISCLOSURE STATING YOU HAVE ADOPTED THE PROVISIONS OF EITF
04-02 AND FSB FAS 141-1 AND 142-1 AND, IN ACCORDANCE WITH THIS
GUIDANCE, YOU HAVE CAPITALIZED CERTAIN COSTS RELATED TO THE ACQUISITION
OF MINERAL RIGHTS. PLEASE EXPAND YOUR DISCLOSURE TO DISCUSS IN MORE
DETAIL THE NATURE OF THE COSTS CAPITALIZED UNDER U.S. GAAP.
RESPONSE: THE COSTS CAPITALIZED UNDER U.S. GAAP ONLY INCLUDE THOSE
COSTS WHICH REPRESENT A RIGHT TO EXPLORE, EXTRACT AND RETAIN AT LEAST A
PORTION OF THE BENEFITS FROM MINERAL INTERESTS. THE CAPITALIZED COSTS
ALSO INCLUDE PROSPECTING AND EXPLORATION PERMITS IF THEY INCLUDE AN
OPTION FOR THE ENTITY TO ACQUIRE THE RIGHTS TO EXTRACT AND RETAIN AT
LEAST A PORTION OF THE BENEFITS FROM THE MINERAL INTERESTS.
OTHER ITEMS WHICH WERE CAPITALIZED FOR CANADIAN GAAP PURPOSES, SUCH AS
DIVIDENDS, FUTURE INCOME TAX ADJUSTMENTS AND ASSET RETIREMENT
OBLIGATIONS, WERE NOT CONSIDERED TO BE TANGIBLE ASSETS UNDER EITF 04-02
AND AS SUCH HAVE NOT BEEN CAPITALIZED UNDER US GAAP.
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 4
(vii) DEVELOPMENT STAGE COMPANY, PAGE F-25
5. WE NOTE YOUR DISCLOSURE STATING YOU ARE IN THE EXPLORATION STAGE AND,
AS OF JULY 1, 2004, ARE CONSIDERED A DEVELOPMENT STAGE COMPANY AS
DEFINED BY SFAS 7. PLEASE AMEND YOUR FILING TO INCLUDE THE DISCLOSURES
REQUIRED BY PARAGRAPH 11 OF SFAS 7.
RESPONSE: THE COMPANY HAS FILED ITS ANNUAL REPORT PURSUANT TO ITEM 17
OF FORM 20-F. ITEM 17 REQUIRES THAT THE COMPANY'S FINANCIAL STATEMENTS
INCLUDE A DISCUSSION OF MATERIAL VARIANCES FROM US GAAP ALONG WITH
QUANTITATIVE RECONCILIATIONS OF NET INCOME AND MATERIAL BALANCE SHEET
ITEMS. DISCLOSURE REQUIRED BY US GAAP BUT NOT REQUIRED UNDER FOREIGN
GAAP ON WHICH THE FINANCIAL STATEMENTS ARE PREPARED NEED NOT BE
FURNISHED PURSUANT TO ITEM 17.
CANADIAN GAAP DOES NOT REQUIRE DISCLOSURE OF CUMULATIVE AMOUNTS FROM
INCEPTION FOR DEFICIT, INCOME STATEMENT, CASH FLOW STATEMENT AND
STATEMENT OF SHAREHOLDERS' EQUITY.
ENGINEERING COMMENTS
GENERAL
6. TO MINIMIZE THE LIKELIHOOD THAT WE WILL REISSUE COMMENTS, PLEASE MAKE
CORRESPONDING CHANGES WHERE APPLICABLE THROUGHOUT YOUR DOCUMENTS. FOR
EXAMPLE, WE MIGHT COMMENT ON ONE SECTION OR EXAMPLE, BUT OUR SILENCE ON
SIMILAR OR RELATED DISCLOSURE ELSEWHERE DOES NOT RELIEVE YOU OF THE
NEED TO MAKE APPROPRIATE REVISIONS ELSEWHERE.
RESPONSE: CHANGES THAT ARE APPLICABLE IN MORE THAN ONE INSTANCE HAVE
BEEN MADE THROUGHOUT THE FILING.
INFORMATION ON THE COMPANY, PAGE 17
7. PLEASE INSERT A SMALL-SCALE MAP SHOWING THE LOCATION AND ACCESS TO EACH
PROPERTY, AS REQUIRED BY INSTRUCTION 1(A) TO ITEM 4.D OF FORM 20-F.
PLEASE NOTE THE EDGAR PROGRAM NOW ACCEPTS ADOBE PDF FILES AND DIGITAL
MAPS, SO PLEASE INCLUDE THESE MAPS IN ANY 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 FIGURES AND 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 ADDITIONAL ASSISTANCE IS REQUIRED,
PLEASE CALL FILER SUPPORT AT 202-551-8900.
WE BELIEVE THE GUIDANCE IN INSTRUCTION 1(A) TO ITEM 4.D OF FORM 20-F
WOULD GENERALLY REQUIRE MAPS AND DRAWING WITH THE FOLLOWING FEATURES:
o A LEGEND OR EXPLANATION SHOWING, BY MEANS OF PATTERN OR SYMBOL,
EVERY PATTERN OR SYMBOL USED ON THE MAP OR DRAWING.
o A GRAPHICAL BAR SCALE; REPRESENTATIONS OF SCALE SUCH AS "ONE
INCH EQUALS ONE MILE" MAY BE UTILIZED PROVIDED THE ORIGINAL
SCALE OF THE MAP HAS NOT BEEN ALTERED.
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 5
o A NORTH ARROW.
o AN INDEX MAP SHOWING WHERE THE PROPERTY IS SITUATED IN
RELATIONSHIP TO THE STATE OR PROVINCE, ETC., IN WHICH IT IS
LOCATED.
o A TITLE OF THE MAP OR DRAWING, AND THE DATE ON WHICH IT WAS
DRAWN.
ANY DRAWING SHOULD BE SIMPLE ENOUGH OR OF SUFFICIENTLY LARGE SCALE TO
CLEARLY SHOW ALL FEATURES ON THE DRAWING.
RESPONSE: MAPS FOR EACH OF THE COMPANY'S PROPERTIES HAVE BEEN
INCORPORATED BY REFERENCE AS EXHIBITS TO THE FILING AS REQUESTED. SEE
EXHIBITS 15.1, 15.2, 15.4, 15.6 AND 15.8 TO THE FILING.
8. PLEASE DISCLOSE THE FOLLOWING INFORMATION FOR EACH OF YOUR PROPERTIES:
o THE NATURE OF THE COMPANY'S OWNERSHIP OR INTEREST IN THE
PROPERTY.
o A DESCRIPTION OF ALL INTERESTS IN THE PROPERTIES, INCLUDING THE
TERMS OF ALL UNDERLYING AGREEMENTS.
o CERTAIN IDENTIFYING INFORMATION, SUCH AS THE PROPERTY NAMES,
CLAIM NUMBERS, GRANT NUMBERS, AND DATES OF RECORDING AND
EXPIRATION; SUFFICIENT TO ENABLE THE CLAIMS TO BE DISTINGUISHED
FROM OTHER CLAIMS THAT MAY EXIST IN THE AREA.
o THE CONDITIONS THAT MUST BE MET TO RETAIN YOUR CLAIMS OR LEASES,
INCLUDING QUANTIFICATION AND TIMING OF ALL NECESSARY PAYMENTS.
o THE AREA OF THE CLAIMS, EITHER IN HECTARES OR ACRES.
PLEASE ENSURE THAT YOU FULLY DISCUSS THE MATERIAL TERMS OF THE LAND OR
MINERAL RIGHTS SECURING AGREEMENTS, AS REQUIRED UNDER PARAGRAPH (B)(2)
OF INDUSTRY GUIDE 7.
RESPONSE: THE PROPERTY DISCLOSURES HAVE BEEN AMENDED TO MORE FULLY
DESCRIBE THE NATURE OF THE COMPANY'S INTERESTS IN ITS PROPERTIES.
ADDITIONALLY, A TABLE OF CLAIMS HAS BEEN INCORPORATED BY REFERENCE AS
AN EXHIBIT TO THE FILING FOR EACH OF THE COMPANY'S PROPERTIES. SEE
EXHIBITS 15.3, 15.5, 15.7 AND 15.9 TO THE FILING.
9. TELL US WHETHER YOU OBTAINED PERMISSION FROM ALL NAMED EXPERTS, SUCH AS
ROSCOE POSTLE ASSOCIATES INC., GRAHAM C. CLOW, WAYNE W. VALIANT, AND
KEVIN LEONARD, FOR YOUR REFERENCES TO THEM IN YOUR FILING, AGREEING
WITH THE DISCLOSURES YOU HAVE MADE. IF YOU DID NOT, PLEASE EXPLAIN THE
REASONS AND INDICATE THE EXTENT TO WHICH ANY OF THE INDIVIDUALS
IDENTIFIED IN THE FILING ARE NOT IN FULL AGREEMENT WITH YOUR
STATEMENTS.
RESPONSE: THE COMPANY OBTAINED THE CONSENT OF EACH SUCH PERSON CITED IN
THE FILING AND THE FILING HAS BEEN AMENDED IN THAT REGARD.
10. YOUR DISCLOSURES CONCERNING THE GEOLOGIC SETTING, REGIONAL GEOLOGY,
LOCAL GEOLOGY, PROPERTY GEOLOGY, AND MINERALIZATION INCLUDE DETAIL AND
TECHNICAL LANGUAGE THAT AN AVERAGE INVESTOR MAY NOT UNDERSTAND, AND
WHICH MAY THEREFORE DETRACT FROM ITS USEFULNESS. ALTHOUGH YOUR
DISCLOSURES SHOULD INCLUDE INFORMATION ABOUT YOUR PROPERTIES, THESE
SHOULD BE PREPARED IN A CLEAR AND CONCISE MANNER. THE GUIDANCE IN
INDUSTRY GUIDE 7, PARAGRAPH (b)(5), CALLS FOR A "BRIEF
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 6
DESCRIPTION" OF THE ROCK FORMATIONS AND MINERALIZATION. PLEASE REPLACE
YOUR DISCLOSURE WITH A NON-TECHNICAL SUMMARY THAT IS RESPONSIVE TO THIS
GUIDANCE, WRITTEN USING TERMINOLOGY THE AVERAGE INVESTOR CAN
UNDERSTAND. YOU MAY REVISE YOUR FILING BY DEFINING THE TECHNICAL WORDS
THROUGH THE CONTEXT OF YOUR DISCUSSION AND PROVIDE DEFINITIONS WITHIN
THE GLOSSARY FOR WORDS THAT CANNOT BE ADEQUATELY DEFINED IN THE TEXT.
RESPONSE: THE GLOSSARY OF DEFINITIONS AND THE PROPERTY DISCLOSURES HAVE
BEEN AMENDED TO INCLUDE TERMINOLOGY THE AVERAGE INVESTOR CAN
UNDERSTAND. ADDITIONALLY, TECHNICAL TERMS ARE DEFINED BOTH IN THE
CONTEXT OF THE DISCLOSURE AND WITHIN THE GLOSSARY OF THE FILING. SEE
ITEM 4 OF THE FILING.
MINERAL RESOURCE ESTIMATES, PAGE 31
11. WE UNDERSTAND THAT YOU ARE PRESENTING YOUR NON-RESERVE INFORMATION
PURSUANT TO THE GUIDANCE IN INSTRUCTION 3 TO PARAGRAPH (b)(5) OF
INDUSTRY GUIDE 7. UNDER THESE CIRCUMSTANCES, IT IS IMPORTANT TO CLEARLY
DISTINGUISH BETWEEN PROVEN AND PROBABLE RESERVES, WHICH HAVE A CLEARLY
DEFINED TECHNICAL, LEGAL, AND ECONOMIC MEANING, AND NON-RESERVE
MINERALIZATION. IF YOU CHOOSE TO PRESENT SUCH NON-RESERVE INFORMATION,
PLEASE REPOSITION THIS INFORMATION TO A SEPARATELY TITLED SECTION,
HAVING DISCLOSURE OF YOUR MEASURED AND INDICATED MINERAL RESOURCES,
APART FROM YOUR INFERRED MINERAL RESOURCES, USING SEPARATE TABLES AND
NARRATIVES. IN PRESENTING THIS INFORMATION, RESOURCES SHOULD ONLY BE
REPORTED AS AN "IN-PLACE" TONNAGE AND GRADE, NOT AS UNITS OF PRODUCT,
SUCH AS OUNCES OF GOLD OR POUNDS OF COPPER, AND NOT AS CONTAINED
MINERAL. THE RELATIVE QUALITY, RELIABILITY, AND RISK ASSOCIATED WITH
YOUR ESTIMATES SHOULD BE ADDRESSED SUFFICIENTLY TO DISTINGUISH EACH
MINERAL RESOURCE CATEGORY.
PLEASE INCLUDE CAUTIONARY DISCLOSURE, PROMINENTLY DISPLAYED ABOVE EACH
TABLE, CLARIFYING THAT YOUR MINERAL RESOURCES, WHETHER MEASURED AND
INDICATED OR INFERRED, WHILE DISCLOSED PURSUANT TO CANADIAN
REQUIREMENTS, ARE NOT RECOGNIZED TERMS WITHIN THE DEFINITIONS
PRESCRIBED BY THE SEC, AND ARE NOT RESERVES. PLEASE EMPHASIZE THE
UNCERTAINTY OF WHETHER YOUR MEASURED AND INDICATED MINERAL RESOURCES
WILL EVER BE CONVERTED INTO RESERVES, AND WHETHER YOUR INFERRED MINERAL
RESOURCES WILL EVER BE UPGRADED INTO ANOTHER CATEGORY OF RESOURCES,
WHILE SPECIFYING THE PARTICULAR ASPECTS OF THE RESERVE DEFINITIONS
WHICH HAVE NOT BEEN SATISFIED FOR EACH CATEGORY OF RESOURCES.
YOU MAY WISH TO CONSIDER LANGUAGE SIMILAR TO THE FOLLOWING, MODIFIED AS
NECESSARY TO REFLECT YOUR PARTICULAR CIRCUMSTANCES, FOR DISCLOSURE
ABOVE THE MEASURED AND INDICATED RESOURCES TABLE:
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF MEASURED AND
INDICATED RESOURCES. THIS SECTION USES THE TERMS "MEASURED RESOURCES"
AND "INDICATED RESOURCES." WE ADVISE U.S. INVESTORS THAT THESE TERMS
ARE NOT RECOGNIZED BY THE U.S. SECURITIES AND EXCHANGE COMMISSION. THE
ESTIMATION OF MEASURED RESOURCES AND INDICATED RESOURCES INVOLVES
GREATER UNCERTAINTY AS TO THEIR EXISTENCE AND ECONOMIC FEASIBILITY THAN
THE ESTIMATION OF PROVEN AND PROBABLE RESERVES. U.S. INVESTORS ARE
CAUTIONED NOT TO ASSUME THAT MINERAL RESOURCES IN THESE CATEGORIES WILL
BE CONVERTED INTO RESERVES.
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 7
YOU MAY ALSO WISH TO CONSIDER LANGUAGE SIMILAR TO THE FOLLOWING,
AUGMENTED AS APPROPRIATE, FOR DISCLOSURE ABOVE THE INFERRED MINERAL
RESOURCES TABLE:
CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING ESTIMATES OF INFERRED
RESOURCES. THIS SECTION USES THE TERM "INFERRED RESOURCES." WE ADVISE
U.S. INVESTORS THAT THIS TERM IS NOT RECOGNIZED BY THE U.S. SECURITIES
AND EXCHANGE COMMISSION. THE ESTIMATION OF INFERRED RESOURCES INVOLVES
FAR GREATER UNCERTAINTY AS TO THEIR EXISTENCE AND ECONOMIC VIABILITY
THAN THE ESTIMATION OF OTHER CATEGORIES OF RESOURCES. U.S. INVESTORS
ARE CAUTIONED NOT TO ASSUME THAT ESTIMATES OF INFERRED MINERAL
RESOURCES EXIST, ARE ECONOMICALLY MINABLE, OR WILL BE UPGRADED INTO
MEASURED OR INDICATED MINERAL RESOURCES.
RESPONSE: THE COMPANY HAS REMOVED REFERENCES TO MEASURED AND INDICATED
MINERAL RESOURCES AND INFERRED RESOURCES FROM THE FILING, INCLUDING THE
TABULAR PRESENTATION FROM THE ORIGINAL FILING.
DRILLING, PAGE 46
12. IN THE THIRD PARAGRAPH OF THIS SECTION YOU REFER TO "GRAB" SAMPLES
FOLLOWED BY THE "BEST" ASSAY RESULTS. AS A GENERAL CHECKLIST, WHEN
REPORTING THE RESULTS OF SAMPLING AND CHEMICAL ANALYSES, THE FOLLOWING
POINTS MAY ASSIST YOU IN PREPARING MEANINGFUL DISCLOSURE ABOUT
MINERALIZATION OF EXISTING OR POTENTIAL ECONOMIC SIGNIFICANCE ON YOUR
PROPERTY:
o DISCLOSE ONLY WEIGHED-AVERAGE SAMPLE ANALYSES ASSOCIATED WITH A
MEASURED LENGTH OR A SUBSTANTIAL VOLUME.
o ELIMINATE ALL ANALYSES FROM "GRAB" OR "DUMP" SAMPLES, UNLESS THE
SAMPLE IS OF A SUBSTANTIAL AND DISCLOSED WEIGHT.
o ELIMINATE ALL DISCLOSURE OF THE HIGHEST OR BEST VALUES/GRADES OF
SAMPLE SETS. PRESENT A BALANCED DISCLOSURE OF THE DRILL AND
SAMPLING RESULTS.
o ELIMINATE GRADES DISCLOSED AS "UP TO" OR "AS HIGH AS" OR
"RANGING FROM."
o ELIMINATE STATEMENTS CONTAINING GRADE AND/OR SAMPLE-WIDTH
RANGES.
o AGGREGATED SAMPLE VALUES FROM RELATED LOCATIONS SHOULD BE
AGGREGATED BASED ON A WEIGHTED AVERAGE OF LENGTHS OF THE
SAMPLES.
o GENERALLY, USE TABLES TO IMPROVE READABILITY OF SAMPLE AND
DRILLING DATA.
o SOIL SAMPLES MAY BE DISCLOSED AS A WEIGHTED AVERAGE VALUE OVER
AN AREA.
o REFRAIN FROM REPORTING SINGLE SOIL SAMPLE VALUES.
o CONVERT ALL PPB QUANTITIES TO PPM QUANTITIES FOR DISCLOSURE.
PLEASE REVIEW YOUR FILING AND REVISE ALL YOUR DISCLOSURES TO COMPLY
WITH THIS GUIDANCE.
RESPONSE: THE COMPANY HAS AMENDED THE FILING IN CONNECTION WITH THE
RESULTS OF SAMPLING AND CHEMICAL ANALYSES TO COMPORT WITH THE GUIDANCE
ABOVE.
WEST RED LAKE PROPERTY, PAGE 50
WE NOTE YOUR DISCLOSURE IN THIS SECTION, REFERRING TO MINES AND OTHER MINERAL
PROPERTIES THAT EXIST IN THE AREA OF YOUR PROPERTY. SUCH DISCLOSURE MAY CAUSE
INVESTORS TO INFER THAT YOUR PROPERTY ALSO HAS
Karl Hiller
Branch Chief
Securities and Exchange Commission
July 6, 2007
Page 8
COMMERCIAL MINERALIZATION, BECAUSE OF ITS PROXIMITY TO THESE MINES AND
PROPERTIES. PLEASE FOCUS OR RESTRICT YOUR DISCLOSURE SOLELY TO THOSE PROPERTIES
IN WHICH YOU HAVE AN INTEREST. PLEASE DESCRIBE ONLY THE GEOLOGY, HISTORY, OR
EXPLORATION RESULTS THAT ARE DIRECTLY RELATED TO THESE PROPERTIES. PLEASE REMOVE
ALL REFERENCES TO MINES, ADJACENT OR ANALOGOUS PROPERTIES, DEPOSITS,
OCCURRENCES, OR EXPLORATION ACTIVITIES BY OTHER COMPANIES OUTSIDE OF YOUR
PROPERTIES THROUGHOUT THIS FILING.
RESPONSE: THE COMPANY HAS REMOVED REFERENCES TO MINES, ADJACENT OR
ANALOGOUS PROPERTIES, DEPOSITS, OCCURRENCES, OR EXPLORATION ACTIVITIES
BY OTHER COMPANIES OUTSIDE OF ITS PROPERTIES.
Please contact the undersigned with any additional questions or comments you may
have.
Sincerely,
/s/ ROBERT S. MCCORMACK
Robert S. McCormack
Cc: Halo Resources Ltd.
D&H Group LLP
July 6, 2007
Karl Hiller
Branch Chief
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
RE: HALO RESOURCES LTD.
FORM 20-F FOR THE FISCAL YEAR ENDED AUGUST 31, 2006
FILED MARCH 15, 2007
FILE NO. 0-30196
Dear Mr. Hiller:
In connection with responding to comments set forth in your letter of April 25,
2007, Halo Resources Ltd. (the "Company") hereby acknowledges that:
1. The Company is responsible for the adequacy of the disclosures in the
filing;
2. Staff comments or changes to disclosures in response to staff comments
do not foreclose the Commission from taking any action with respect to
the filing; and
3. 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.
HALO RESOURCES LTD.
By: /s/ LYNDA BLOOM
-------------------------------------------
Lynda Bloom
President, Chief Executive Officer, and
Director