Golden River Resources Corporation
A Delaware Corporation
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Level 8, 580 St Kilda Road, Melbourne
Victoria 3004, Australia
PO Box 6315, St Kilda Road Central
Melbourne, Victoria 8008, Australia
Telephone: +61 3 8532 2860
Facsimile: +61 3 8532 2805
Email: investor@goldenriverresources.com
September 17, 2008
VIA EDGAR
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Attn: Jill Davis, Esq.
Mail Stop 7010
Re: Golden River Resources Corporation
Form 10-KSB for the Fiscal Year Ended June 30, 2006
Filed September 28, 2006
Form 10-KSB for the Fiscal Year Ended June 30, 2007
Filed September 27, 2007
Response letter dated March 3, 2008
File No. 000-16097
Ladies and Gentlemen:
On behalf of Golden River Resources Corporation, a Delaware corporation ("GRR"
or the "Company"), we have set forth below the Company's proposed responses to
the Staff's comment letter dated May 20, 2008 with respect to the Company's
Annual Report on Form 10-KSB for the fiscal year ended June 30, 2006 (the "Form
10-KSB") and its Quarterly Report on Form 10-QSB for the fiscal quarter ended
December 31, 2006 (the "Form 10-QSB"). The Staff's comments have been reproduced
(in bold) below and are immediately followed by the Company's responses thereto.
Form 10-KSB for the Fiscal Year Ended June 30, 2007
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Notes to Consolidated Financial Statements
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Note 5 Affiliate Transactions, page F-12
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1. We note your disclosure that "Wilzed Pty Ltd, accompany associated with
the President of the Company, Joseph Gutnick, has provided loan funds
to enable the Company to meet its liabilities." Please explain to us in
detail the nature of the association between your president, Mr
Gutnick, and Wilzed Pty Ltd. As part of your response, please address
whether Mr Gutnick has any equity ownership in or amounts due to or
from Wilzed Pty Ltd. Additionally, indicate whether Mr Gutnick has
significant influence or control over Wilzed Pty Ltd. Finally, please
indicate whether or not you and Wilzed Pty Ltd are entities under
common control.
Mr Gutnick was one of two directors and held one (1) share of the total
of six issued and outstanding shares of Wilzed Pty Ltd ("Wilzed") at
the time of the transaction. The second director of Wilzed was Mr.
Gutnick's wife and she also held the other five (5) issued and
outstanding shares of Wilzed.
Wilzed have advised that at the time of the transactions between the
Company and Wilzed, there were no monies due to or from Mr Gutnick and
Wilzed.
The Company has been advised by Mr Gutnick that he does have
significant influence but not control over Wilzed.
It is the Company's view that it and Wilzed are entities under common
control.
Note 9 Issue of Options Under Stock Option Plan, page F-14
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2. We note your response to comments three and four from our letter dated
October 4, 2007 and, at this time, are unable to agree with your
conclusion that the three months prior to November 2004 was an
appropriate period over which to determine the volatility rate used in
the determination of fair value of options issued in 2004. Please
determine the volatility rate in accordance with the provisions of
paragraph 284-285 of SFAS 123 (the literature in place at the time the
options were issued), and tell us the impact the difference in
volatility has on each annual and quarterly period impacted.
The volatility rate determined in accordance with paragraph 284-285 of
SFAS 123 was 174.6% compared to 20% originally used.
The impact on each annual report using a volatility of 174.6% is as
follows:
Stock Based Loss from Operations Net Loss
Compensation
As Reported Amended As Reported Amended As Reported Amended
A$000 A$000 A$000 A$000 A$000 A$000
June 30, 2005 377 1,144 2,603 3,370 2,600 3,367
June 30, 2006 191 557 1,312 1,678 1,328 1,694
The impact on each quarterly report impacted is as follows:
Stock Based Loss from Operations Net Loss
Compensation
As Amended As Amended As Amended
Reported A$000 Reported A$000 Reported A$000
A$000 A$000 A$000
March 31, 2005 251 763 485 997 480 992
September 30, 2005 78 231 308 461 315 468
December 31, 2005 58 166 370 478 386 494
March 31, 2006 32 94 290 352 303 365
September 30, 2006 7 20 528 541 544 557
The options were fully amortized in July 2006.
3. We note your response to comment five, and are unable to agree with
your conclusions regarding the use of a share price in your private
placements as the best indicator of the value of your common shares.
Please modify your fair value determinations to comply with the
provisions of paragraph 22 of SFAS 123(R) and SAB Topic 14.
In our response of March 3, 2008, the Company advised that the revised
amount to be amortized was US$1,060,200 (A$1,406,287) based on using
the market price of US$0.3088 in the binomial calculation.
The impact on each annual report is as follows:
Stock Based Loss from Operations Net Loss
Compensation
As Amended As Amended As Amended
Reported A$000 Reported A$000 Reported A$000
A$000 A$000 A$000
June 30, 2007** 300 613 1,686 1,999 1,784 2,097
June 30, 2008* 192 388 944 1,140 949 1,145
* based on internal financial statements which are subject to audit.
The impact on each quarterly report is as follows:
Stock Based Loss from Operations Net Loss
Compensation
As Amended As Amended As Amended
Reported A$000 Reported A$000 Reported A$000
A$000 A$000 A$000
December 31, 2006** 36 172 247 383 288 424
March 31, 2007 152 209 302 359 314 371
September 30, 2007 54 110 284 340 290 346
December 31, 2007 53 107 182 236 181 235
March 31, 2008 43 86 207 250 207 250
** includes adjustment relating to amortization of stock based
compensation in respect to the issue of options in 2004 relating to
question 2 above.
Although the Company accepts and appreciates the SEC comments on the accounting
issues as described above, management respectfully requests that the Company be
permitted to implement all these revisions within its June 30, 2008 10-K filing.
The Company is engaged in mineral exploration activities and has not generated
any revenues from such activities to date. As a result, the Company believes
that the restatements of previously issued interim and year-end financial
statements, which would have the affect of increasing reported non-cash losses,
would not have a meaningful effect to the Company's investors and shareholders.
Accordingly, we request the Staff allow the Company to record the effect of all
adjustments required as a result of the comments from the SEC as a cumulative
correction in the Company's Form 10-K for the year ended June 30, 2008 by
restating the Company's comparative 2007 annual financial statements and
preparing its 2008 annual financial statements effecting the revised accounting.
Additionally, we request that the Company not be required to file amendments for
all previously filed Form 10-QSB's and Form 10-KSB's.
In making this request, the Company refers to the Chief Accountant of the SEC's
Division of Corporation Finance posting on the SEC website of January 16, 2007
titled "Sample Letter Sent in Response to Inquiries Related to Filing Restated
Financial Statements for Errors in Accounting for Stock Option Grants" (the
"January 16 Letter") and acknowledges that the Company will include in its Form
10-K Report for the year ended June 30, 2008 the comprehensive disclosures
referred to in the January 16 Letter and the disclosures required by the Chief
Accountants September 19, 2006 letter.
On behalf of the Company we hereby acknowledge the following:
o the Company is responsible for the adequacy and accuracy of the
disclosure in the filing;
o staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with respect to the filing; and
o 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.
If you have any questions concerning the responses, please do not hesitate to
call me at 011-61-3-8532-2866.
Yours faithfully
/S/ PETER LEE
PETER LEE
Director, CFO & Secretary