Trio Resources Inc (TRII)

[21ZNA9]

30 Questions from the SEC for TRII


http://www.sec.gov/Archives/edgar/data/1532828/000000000013001963/filename1.pdf

3. Please review the disclosure throughout and ensure that you identify the source(s) for the
information you provide. In this regard, we note that you have provided numerous
factual statements, but you do not indicate whether the source of this information is
management’s belief or another source. For example, on page 7 you state that your
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 2
above ground materials contain an average of 40 ounces of silver for every ton. Further,
on page 9 you state that “[n]o mine in the Cobalt area ever used computerized modeling
or used advanced techniques to define ore reserves.” Where such information is based
upon management’s belief, please indicate that this is the case and also provide an
explanation for the basis of your belief. If this information is based upon other sources
please provide us with copies of these sources, clearly marked to highlight the portion or
section that contains this information and cross-reference it to the appropriate location in
your filing. Please also disclose in your filing the date of these sources, where such date
has not been disclosed, and whether the information represents the most recently
available data and, therefore, remains reliable.
Description of Business, page 7
4. Please disclose the specific exploration initiatives Trio has been engaged in since
inception.
5. Please disclose what constitutes a “going public” transaction for purposes of the
consulting agreement with Seagel Investment Corp. and describe the consulting services.
Business Model, page 7
6. Please disclose whether you have any agreements with refiners and file all agreements as
exhibits. As applicable, please disclose the material terms of these agreements.
7. Please substantially revise your disclosure to explain clearly how you will carry out your
business activities and work toward revenue generation. For example, describe the
specific steps, costs, need for capital raising, employees, equipment, and agreements with
other parties necessary to pursue your business plan.
8. We note you discuss ore quantities of 4,000 tons with an average quality or grade of 40
ounces of silver in this section. Under SEC Industry Guide 7, the terms ores, ore grade or
ore body are treated the same as the term reserve. Prior to declaring reserves, your
company should have obtained a “final” or “bankable” feasibility study, and employed
the historic three-year average commodity price for your economic analysis and you
should have submitted all necessary permits and authorizations, including environmental,
to governmental authorities. Please revise your filing accordingly, explaining the basis
for these quantity and quality estimates using the appropriate descriptions or remove
these estimate from your filing.
9. We also note that you refer to 4,000 tons of material as a concentrate, along with
additional 16, 000 tons of primary crushed material, and a bulk sample of an additional
16,000 tons which was collected in 2012. In addition we note you disclose a muck pile
with 910,000 tons of ore, and a tailings pond with 347,870 tons of ore. Please modify
your filing explaining how and why these different material quantities were collected,
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 3
processed, and how the tonnage and grades were determined. Please describe how your
concentrate was processed, the associated recoveries, and other appropriate factors.
10. Detailed sampling provides the basis for the quality estimate or grade of your mineral
discovery. Please provide a brief description of your sample collection, sample
preparation, and the analytical procedures used to develop your analytical results. In
addition, please disclose any Quality Assurance/Quality Control (QA/QC) protocols you
have developed for your exploration program. These procedures would serve to inform
potential investors regarding your sample collection and preparation, assay controls,
sample custody, assay precision and accuracy procedures and protocols.
11. Please provide the basis for preparing the mineral estimates in your Form 8-K in
accordance with the requirements of the securities laws in effect in Canada as opposed to
the United States.
Corporate History & Background, page 7
Ore Inventory and Tailings, page 8
Plan of Operations, page 19
12. We note you intend to process your reserves, referenced as the muck pile and tailings, in
this section. Please note mineral reserves for a mineral property may not be designated
unless:
? Competent professional engineers conduct a detailed engineering and economic
study, and the “bankable” or “final” feasibility study demonstrates that a mineral
deposit can be mined profitably at a commercial rate.
? historic three-year average commodity price is used in any reserve or cash flow
analysis used to designate reserves
? The company has demonstrated that the mineral property will receive its
governmental permits, and the primary environmental document has been filed with
the appropriate governmental authorities.
Please revise your disclosure accordingly. In addition, please revise your disclosure
throughout this document to ensure you do not prematurely indicate mining operations on
mining properties before a proper feasibility study and economic viability determination
has been conducted.
Competition, page 8
13. Please expand your discussion of the competitive conditions in your industry, including
an estimate of the number of competitors and a more specific discussion of the
Company’s competitive position.
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 4
Properties, page 9
14. Please disclose the following information for each of your properties:
? The nature your ownership or interest in the property.
? A description of all interests in your properties, including the terms of all underlying
agreements and royalties.
? Describe the process by which mineral rights are acquired at this location and the
basis and duration of your mineral rights, surface rights, mining claims or
concessions.
? An indication of the type of claim or concession such as placer or lode, exploration or
exploitation, whether the mining claims are State or Federal mining claims, patented
or unpatented claims, mining leases, or mining concessions.
? Please include certain identifying information, such as the property names, claim
numbers, grant numbers, mining concession name or number, and dates of recording
and expiration that is sufficient to enable the claims to be distinguished from other
claims that may exist in the area or your properties.
? The conditions that must be met to retain your claims or leases, including
quantification and timing of all necessary payments, annual maintenance fees, and
disclose who is responsible for paying these fees.
? The area of your claims, either in hectares or in 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.
15. We note you intend to place your mineral project into production without first
establishing mineral reserves supported by a technical report and completing a feasibility
study. Historically, such projects have a much higher risk of economic or technical
failure. Please add a risk factor to your filing stating you are not basing your production
decision on a pre-feasibility or feasibility study of mineral reserves, which demonstrate
your economic and technical viability. In addition, please provide adequate disclosure of
the increased uncertainty, with specific economic and technical risks of failure associated
with your production decision.
16. Please disclose the information required under paragraph (b) of Industry Guide 7 for all
your material properties listed under this heading. For any properties identified that are
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 5
not material, please include a statement to that effect, clarifying your intentions. For each
material property, include the following information:
? The location and means of access to your property, including the modes of
transportation utilized to and from the property.
? Any conditions that must be met in order to obtain or retain title to the property,
whether you have surface and/or mineral rights.
? A brief description of the rock formations and mineralization of existing or potential
economic significance on the property.
? A description of any work completed on the property and its present condition.
? The details as to modernization and physical condition of the plant and equipment,
including subsurface improvements and equipment.
? A description of equipment, infrastructure, and other facilities.
? The current state of exploration of the property.
? The total costs incurred to date and all planned future costs.
? The source of power and water that can be utilized at the property.
? If applicable, provide a clear statement that the property is without known reserves
and the proposed program is exploratory in nature.
You may refer to Industry Guide 7, paragraphs (b) (1) through (5), for specific guidance
pertaining to the foregoing, available on our website at the following address:
www.sec.gov/about/forms/industryguides.pdf
17. Please insert a small-scale map showing the location and access to each material
property, as required by Instruction 3(b) to Item 102 of Regulation S-K. 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 [phone] for PostAcceptance Filing Issues or [phone] for Pre-Acceptance Filing Issues. We
believe the guidance in Instruction 3(b) of Rule 102 of Regulation S-K would generally
require maps and drawings to comply with the following features:
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 6
? A legend or explanation showing, by means of pattern or symbol, every pattern or
symbol used on the map or drawing.
? A graphical bar scale should be included. Additional representations of scale such as
"one inch equals one mile" may be utilized provided the original scale of the map has
not been altered.
? A north arrow.
? An index map showing where the property is situated in relationship to the state or
province, etc., in which it was located.
? A title of the map or drawing, and the date on which it was drawn.
? In the event interpretive data is submitted in conjunction with any map, the identity of
the geologist or engineer that prepared such data.
Any drawing should be simple enough or of sufficiently large scale to clearly show all
features on the drawing.
Government Regulation, page 9
18. Please discuss the specific effect of existing or probable governmental regulations on
your business, including anticipated costs of compliance.
Risk Factors, page 10
19. Unless you can substantiate significant technical training and/or experience in minerals
exploration or mining by members of your management, you should include a risk factor
explaining that your management lacks technical training and experience with exploring
for, starting, and/or operating a mine; and that with no direct training or experience in
these areas, your management may not be fully aware of many of the specific
requirements related to working within this industry. In this instance, please also explain
that their decisions and choices may not take into account standard engineering or
managerial approaches mineral exploration companies commonly use; and that your
operations, earnings, and ultimate financial success could suffer due to management’s
lack of experience in this industry.
20. Please disclose whether your property has been physically examined in the field by a
professional geologist or mining engineer. If not, please add a risk factor that addresses
the fact that your property has not been examined, detailing the risks to your investors.
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 7
21. Please disclose whether your sole officer and director has visited your claims, and if so,
when and for how long. If he has not visited your claims, please add related risk factor
disclosure.
Overview, page 18
22. As your company does not have a reserve, it must be in the exploration stage, as defined
by Industry Guide 7(a) (1) and (a) (4) (i) respectively. Exploration stage companies are
those issuers engaged in the search and evaluation of mineral deposits, which are not
engaged in the development of reserves or engaged in production. Remove all references
in the document that use the term “mining” or “mining operations,” or any term that can
imply mineral production, such as operations.
23. In the description of each exploration property, please provide a clear statement that the
property is without known reserves and the proposed program is exploratory in nature to
comply with the guidance in paragraph (b)(4)(i) of Industry Guide 7, applicable under the
instructions to Item 4 of Form 20-F.
24. We note you disclose previous mining activities on your mineral properties. Please
elaborate on any surface disturbance or contamination issues found on the surface or in
the groundwater or surface waters due to historical mining activities. The full extent and
significance of the disturbance/contamination, as well as your plans to remediate the site,
should be clear.
25. We note you are subject to permitting requirements of the Federal and State
Environmental requirements. Please provide a short summary of the permits and/or
operational plans required to perform exploration and/or mining/processing activities on
your properties. Please define your reclamation and closure obligations and
requirements.
Plan of Operation, page 19
26. On a related point, it appears you should also expand your disclosure concerning the
exploration plans for the properties to address the following points.
? Disclose a brief geological justification for each of the exploration projects written in
non-technical language.
? Give a breakdown of the exploration timetable and budget, including estimated
amounts that will be required for each exploration activity, such as geophysics,
geochemistry, surface sampling, drilling, etc. for each prospect.
? If there is a phased program planned, briefly outline all phases.
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 8
? If there are no current detailed plans to conduct exploration on the property, disclose
this prominently .
? Disclose how the exploration program will be funded.
? Identify who will be conducting any proposed exploration work, and discuss what
their qualifications are.
Results of Operations, page 19
27. Please disclose the fixed assets and equipment you own.
Security ownership of Certain Beneficial Owners and Management, page 23
28. We note your disclosure on page 3 that the Trio Shareholders own an aggregate of
66.15% of your common stock. It appears that Seagel Investment Corp. owns 321,000
shares of common stock based on your disclosures on page 33 and on page 31 of the
Exchange Agreement. Please disclose if Seagel Investment Corp. or any of the other
shareholder beneficially own more than 5% of your common stock.
Item 4.01, page 33
29. We note the second paragraph under section (b) on page 34. Please revise to disclose, if
true, that during the fiscal years ended September 30, 2012 and 2011 and through the date
of engagement of MNP LLP, you did not consult with MNP regarding the regarding the
application of accounting principles to any specific completed or contemplated
transaction, or the type of audit opinion that might be rendered on the Company’s
financial statements, and MNP did not provide any written or oral advice that was an
important factor considered by the Company in reaching a decision as to any accounting,
auditing or financial reporting issue or any matter that was the subject of a
“disagreement” or a “reportable event,” as such terms are defined in Item 304(a)(1) of
Regulation S-K. Refer to Item 304(a)(2) of Regulation S-K.
Item 9.01 Financial Statements and Exhibits, page 35
30. We note that the Certificate of Amendment appears to be an unexecuted form. In your
next amendment, please include a copy of the executed filed Certificate of Amendment.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules require. Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
J. Duncan Reid
Allied Technologies Group, Inc.
January 11, 2013
Page 9
In responding to our comments, please provide a written statement from the company
acknowledging that:
? the company is responsible for the adequacy and accuracy of the disclosure in the filing;
? 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
? 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.
You may contact Tracey McKoy, Staff Accountant, at 202- 551-3772 or Terence
O’Brien, Accounting Branch Chief, at 202-551-3355 if you have questions regarding comments
on the financial statements and related matters. Please contact Asia Timmons-Pierce, Staff
Attorney, at 202-551-3754 or Craig Slivka, Special Counsel, at 202-551-3729 with any other
questions.
Sincerely,
/s/ Craig E. Slivka, for
Pamela A. Long
Assistant Director