KINGSTON MINES LTD.
106-1990 S.E. KENT AVE. VANCOUVER BRITISH COLUMBIA V5P 4X5
TEL: (604) 642-9561 FAX: (604) 648-8902
May 26, 2006
VIA EDGAR AND COURIER
Pamel A. Long
Assistant Director
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: KINGSTON MINES LTD.
FORM SB-2
FILED APRIL 12, 2006
COMMISSION FILE NO. 333-133232
Dear Ms. Long:
In connection with the above-captioned filing, we are filing with the
Commission, via Edgar, the following documents relating to the registration of
Common Stock:
A. Pre-Effective Amendment No. 1 to our Registration Statement on Form
SB-2 (the "Registration Statement"); and
B. Four copies of the Registration Statement, marked to indicate the
changes made by Pre-Effective Amendment No. 1.
The Registration Statement has been amended to respond to the Staff's
letter of non-accounting and accounting comments dated May 9, 2006. Our
responses to the Staff's comments are set forth below in the following
paragraphs numbered to correspond to the comments in the Staff's letter. Any
capitalized terms used in this letter shall have the meanings ascribed to them
in the Registration Statement.
FORM SB-2
General
1. In response to the Staff's comment, we have made the correction to the
cover page.
2. In response to the Staff's comment, we have filed the consent of our
professional geologist, Barry J. Price, as exhibit 23.3 to our registration
statement.
3. In response to the Staff's comment, we confirm that we are not a "blank
check" company as defined in Rule 419 of Regulation C. We advise that we have
added a paragraph to our Description of Business disclosing that we have no
plans, arrangements, commitments, or understandings to engage in a merger or
acquisition with another company (page 11).
We respectfully disagree with the Staff's assertion that we have no assets
other than cash. This is an accounting technicality. As is common for
development stage mineral exploration companies, our assets are comprised of
cash and our mineral claims. Due to our conservative accounting policy, our
mineral claims have been expensed and not capitalized. If we were to change our
accounting policy so as to capitalize them, our mineral claims would appear as
capital assets on our balance sheet. Notwithstanding the accounting treatment,
the fact remains that we have property that will be used in operations to earn
revenue. If our exploration program is successful and we are able to prove
reserves, then the mineral claims will be treated as capital assets.
We further respectfully disagree with the Staff's assertion that we have no
operations. Thus far, our operations have involved finding and acquiring the
original Sugarloaf claim, commissioning a geological report, and implementing
our proposed exploration plan by significantly expanding our claim area. Our
operations have also included the preparation of our business plan and our
registration statement. We intend to fund further operations by raising capital
through our initial public offering. In this regard, we are no different from
many other public companies, and in particular other development stage
exploration companies.
With respect to the Staff's statement that we will be unable to implement
our business plan without substantial additional funding, we respectfully advise
that we are unable to see how this relates to a "blank check" company. Rule 419
of Regulation C does not make any such distinction. Nonetheless, we
respectfully point out that we addressed the issue of future financing in our
Plan of Operation. We specifically state that it is our intention to seek
equity financing for our future funding requirements until we can demonstrate an
economically viable mine (pages 19-20). We also address the unlikelihood of
debt financing at this stage. We cannot go into any greater detail about our
plans for any future funding requirements because we do not know what the
results of our exploration program will be. Without results from our
exploration program it would be pointless to contemplate additional financing.
Finally, we further respectfully disagree with the Staff's assertion that
our registration statement contains "very general disclosure" related to the
nature of our business plan. We have clearly stated our business plan with a
level of detail that is at least typical for development stage mineral
exploration companies. Given the nature of the industry, only so much
information can be provided prior to exploration. In our Description of
Business, we have provided full particulars with respect to our mineral
property, including its location, access, history, geology, physiography and
mineralization. We have also discussed the regulatory issues and concerns, and
provided the British Columbia registration information for each claim. We have
further specifically described the proposed exploration program, including the
costs thereof. In our Plan of Operations, we go into even greater detail about
our proposed exploration program, again providing costs along with timelines.
In light of the foregoing, we respectfully seek clarification from the Staff as
to which parts of our disclosure are "very general".
Prospectus Summary, page 3
4. In response to the Staff's comment, we have revised the first paragraph
of the Summary (page 3).
5. In response to the Staff's comment, we have revised the disclosure (page
3).
6. In response to the Staff's comment, we have added a paragraph discussing
costs to our disclosure in the Summary (page 3). We have also added updated
disclosure in our Description of Business (pages 13 and 16-17) and Plan of
Operation (pages 19-20) with respect to our plans for additional financing.
7. In response to the Staff's comment, we have included a risk factor that
discusses the costs, risks and consequences of becoming a public company (page
8).
8. In response to the Staff's comment, we have added a risk factor
discussing the risk posed by our officers and directors selling their shares of
our common stock (page 8).
9. In response to the Staff's comment, we have added disclosure to the
Summary section (page 3), the Description of Business (page 12).
Market for Common Equity and Related Stockholder Matters, page 11
10. In response to the Staff's comment, we advise that the third sentence of
the first paragraph of the section states, "We will not be able to obtain a
quotation of our securities on the OTC Bulletin Board without a sponsoring
market maker and we have not made any such arrangements." We respectfully
submit that this disclosure makes it clear that we do not have any arrangements
with market makers to seek quotation. If the Staff would prefer we can revise
the end of the sentence to read " arrangements with a market maker", but we
believe this would be unnecessarily wordy (page 11).
Description of Business, page 11
11. In response to the Staff's comment, we advise that we have added a
paragraph to the section disclosing the timeline and responsibilities related to
our mineral claims (page 13). We have also included a brief discussion in the
summary (page 3).
History of the Claim, page 14
12. In response to the Staff's comment, we have revised the disclosure to
state that our factual claims are based on the report prepared by Mr. Price
(page 14).
Recommended Exploration Program, page 16
13. In response to the Staff's comment, we have replaced "staked" with
"secured" (page 16).
Management Experience, page 17
14. In response to the Staff's comment, we have revised the disclosure
accordingly (pages 3 and 17).
15. In response to the Staff's comment, we have revised the statement
(page17).
16. In response to the Staff's comment, we confirm that neither Mr. Hilford
nor Mr. Mills has any experience with blank check companies. Their experience
with shell companies is limited to their positions as the directors and officers
of Torrent Energy Corp. We have revised our disclosure accordingly (page 17).
Geological and Technical Staff, page 17
17. In response to the Staff's comment, we have revised the heading to state
"Geological and Technical Consultants" (page 17).
18. In response to the Staff's comment, we have expanded on the disclosure
to discuss Mr. Price's experience (page 17).
Directors, Executive Officers, Promoters and Control Persons, page 21
19. In response to the Staff's comment, we have updated the disclosure with
respect to Mr. Mills' business activities for the past five years to include his
ongoing legal practice and his personal service corporation (page 21). There
was no substantive change to the disclosure concerning Mr. Hilford.
20. In response to the Staff's comment, we have redirected our reference to
Rule 405 of the Securities Act (page 21).
21. In response to the Staff's comment, we respectfully submit that since
our promoters are also our directors and officers, the disclosure required by
rule 404 of Regulation S-B is set out under the section titled "Certain
Relationships and Related Transactions". We further respectfully submit that
reproducing the disclosure from that section would be unnecessarily repetitive.
Plan of Distribution, page 24
22. In response to the Staff's comment, we advise that Mr. Mills is
responsible for placing the securities of Thrust Energy Corp. during its
offering period, which is ongoing. This is disclosed in the initial
registration statement of Thrust Energy Corp. Mr. Hilford has not had, and will
not have, any role in the placement of securities of Thrust Energy Corp. We
have therefore not revised the disclosure.
23. In response to the Staff's comment, we advise that the geological report
prepared by Mr. Price does not comply with all of British Columbia's standards
of disclosure for mineral projects, and as such, we are unable to sell our
common stock to residents of the province.
Key Terms of Escrow Agreement, page 25
24. In response to the Staff's comment, we advise that the reference to
"underwriters" was an error of over-inclusion that we have corrected (page 26).
Interest of Named Experts and Counsel, page 27
25. In response to the Staff's comment, we have added a section titled
"Legal Matters" (page 27). Please be advised that we have also deleted the
section titled "Interest of Named Experts and Counsel" as unnecessary because
there is no interest to report.
Available Information, page 27
26. In response to the Staff's comment, we respectfully advise that the
first sentence of the section states that we are subject to the informational
requirements of the Securities Exchange Act of 1934 (page 27).
Exhibit 5.1, Legal Opinion
27. In response to the Staff's comment, we respectfully advise that we are
unable to find the word referred to by the Staff. The filed exhibit is not
paginated, and the final paragraph is only five lines. We request further
clarification.
Exhibit 99.2 - Subscription Agreement
28. In response to the Staff's comment, we have revised the Specimen
Subscription Agreement and re-filed it as exhibit 99.1 to the amended
registration statement.
Should the Staff need additional information or have questions concerning
our response, please do not hesitate to contact us.
Yours very truly,
/s/ Lou Hilford
Lou Hilford
President & CEO
Enclosures