February 11, 2008
KARL HILLER, BRANCH CHIEF
United States Securities and Exchange Commission
100 F. Street, N.W.
Mail Stop 7010
Washington, D.C. 20549-7010
RE: CAN CAL RESOURCES, LTD.
COMMENT LETTER DATED OCTOBER 30, 2007
FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006
FILED APRIL 9, 2007
RESPONSE LETTER DATED AUGUST 22, 2007
FILE NO. 0-26669
Dear Mr. Karl Hiller:
This correspondence is in response to your letter dated October 30, 2007
in reference to our filing of the Form 10-KSB for the fiscal year ended
December 31, 2006 Filed April 9, 2007 in response to the letter dated August
22, 2007 on behalf of Can Cal Resources, Inc. File No. 0-26669
Form 10-KSB for the Fiscal Year Ended December 31, 2006
Note 8- Controls and Procedures
1. We read your response to prior comment five, and understand that you
changed your accounting for the purchase of an intangible asset (mineral
rights, or more specifically, the rights to lease certain parcels of land
for mining purposes), from your original application of the guidance of
SFAS 123(R), resulting in valuation in the third quarter of 2006 based on
the fair value of the common shares issued, to that of SAB Topic 5:G,
whereas you now report the acquisition using carryover basis of the prior
owners. We understand from your disclosure in the third quarter report
that you acquired these fights from the Rose Trust. As this transaction
does not appear to have been made "just prior to or contemporaneously
with a first-time public offering", and because you have not described
any common control arrangements with the prior owners, tell us how you
and your accountants concluded that carryover basis should be utilized.
ANSWER:
OUR PREVIOUS RESPONSE MISTAKENLY REFERENCED SAB TOPIC 5:G. WE
ACTUALLY RELIED ON SFAS NO. 153, WHICH AMENDS APB NO. 29, TO DETERMINE
THE FAIR VALUE OF THE TRANSACTION. THE NON-MONETARY EXCHANGE OF ASSETS
WAS MEASURED BASED ON THE FAIR VALUE OF THE ASSETS EXCHANGED (STOCK IN
EXCHANGE FOR MINERAL RIGHTS). SINCE THE STOCK THAT WAS EXCHANGED WAS NOT
INDICATIVE OF THE FAIR VALUE OF THE ASSET RECEIVED, THE COMPANY VALUED
THE TRANSACTION BASED ON THE FAIR VALUE OF THE MINERAL RIGHTS.
FURTHERMORE, DUE TO THE DIFFICULTY IN DETERMINING THE FAIR VALUE OF THE
MINERAL RIGHTS THE COMPANY CONSERVATIVELY VALUED THE ASSET BASED ON THAT
OF THE SELLERS HISTORICAL CARRYING COST. THE RESULT BEING A MUCH LOWER
CARRYING VALUE ATTRIBUTED TO THE INTANGIBLE ASSET ON CAN-CAL'S BALANCE
SHEET THEN WOULD HAVE BEEN PRESENTED HAD THE STOCK EXCHANGED BEEN USED TO
DETERMINE THE FAIR VALUE.
Engineering Comments
2. Please confirm that you will remove all sample ranges or
terminology such as "assays ranging up to" from your filing.
ANSWER:
WE ACKNOWLEDGE THE NEED TO PROVIDE SPECIFIC AND EASILY
UNDERSTANDABLE DISCLOSURE AND WILL CLEAR UP THE VAGUE LANGUAGE DEPICTING
RANGES WITH SPECIFIC VALUES, ALONG WITH THE PREVIOUSLY REPORTED CHANGES
WE INTEND TO PROVIDE.
3. We note your response to prior comment 15. Currently, your
disclosure does not provide sufficient detail concerning your properties,
differentiating between lode and placer mining claims, Federal or State
mineral rights, patented and unpatented mining claims, and your fee lands
for your Pisgah, Owl Canyon, Cerbat, and Wikieup properties. In this
regard, we note that your initial filing on July 9, 1999, indicated the
Cinder and Cinder #2 claims were placer claims with reservations for gold
and other minerals as described in other property documents or discovered
prior to 1959. This is not reflected in your current filing.
Please disclose the status of all your mining properties and in the
event, you have option agreements, leases, or royalties, describe the
terms of the arrangements. Include identifying information, such as the
claim names, claim numbers, and the dates of recording and expiration
sufficient to enable the claims to be distinguished from other claims.
Also, include the area of the claims, in either hectares or acres, rather
than suggest that all of your claim areas are of comparable size, if this
is not the case. While mining claims may have a maximum area of 20.66
acres, and the size of placer claims varies with each state and the
definition of association claims, the actual sizes typically fall with in
a range.
Expand the disclosure concerning your exploration plans for your
properties as described previously or include a statement that you do not
have an exploration program at this time.
ANSWER:
AS REQUESTED, WE WILL INCORPORATE CLARIFICATION WITH RESPECT TO
TYPE OF CLAIM IF APPLICABLE, WHETHER EACH CLAIM IS A FERAL OR STATE CLAIM
AND THE PATENT STATUS OF EACH. FURTHER, WE WILL INCLUDE THE INFORMATION
PREVIOUSLY DISCLOSED REGARDING OUR CINDER CLAIMS. ALL FINANCIAL
OBLIGATIONS RELATING TO OUR PROPERTIES I.E. ANY LEASE OPTIONS AND/OR
ROYALTY PAYMENTS WILL BE CLEARLY IDENTIFIED BY LEASE WHERE APPLICABLE. IN
ADDITION, WE WILL INCLUDE IN DETAIL THE AREA OF EACH CLAIM ANY FUTURE
EXPLORATION PLANS.