United States securities and exchange commission logo
August 3, 2023
Karl Hanneman
Chief Executive Officer
International Tower Hill Mines Ltd.
2710-200 Granville Street
Vancouver, BC, V6C 1S4
Canada
Re: International Tower
Hill Mines Ltd.
Form 10-K for the
Fiscal Year ended December 31, 2022
Filed March 8, 2023
File No. 001-33638
Dear Karl Hanneman:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2022
General
1. Please utilize
sequential and unique numbering on the pages in any amendment that is
necessary to resolve
the concerns outlined in the comments that follow.
Financial Statements
Note 2 - Summary of Significant Accounting Policies, page FS-48
2. We note your
disclosures on pages 81 and FS-49 stating that your mineral project "is
currently in the
exploration and evaluation phase" which appears to be consistent with
disclosures on page 51,
explaining that you expect to continue to incur losses in the
foreseeable future,
expressing uncertainty as to whether you will ever begin production,
and clarifying that you
do not consider the Livengood Gold Project to be commercially
viable based on the
prevailing commodity prices.
Karl Hanneman
FirstName LastNameKarl Hanneman
International Tower Hill Mines Ltd.
Comapany
August NameInternational Tower Hill Mines Ltd.
3, 2023
August
Page 2 3, 2023 Page 2
FirstName LastName
However, these disclosures are not consistent with numerous
disclosures elsewhere in
your filing indicating the property is in the development stage and
having reported proven
and probable mineral reserves for the property.
Please clarify the nature of support for any disclosures of proven and
probable reserves
that you believe should be retained, including the investment and
market assumptions
made in formulating a view on economic viability and compiling your
preliminary
feasibility study, and submit the revisions that you propose to
clarify the status of the
property and to resolve the inconsistencies referenced above.
3. We note your disclosures on pages 81 and FS-49 describing various
circumstances under
which you would test the costs capitalized for your mineral property
for impairment,
which include "a current-period operating or cash flow loss combined
with a history of
operating or cash flow losses," which is consistent with FASB ASC
360-10-35-21(e).
However, we do not see any disclosures of impairment as would be
provided pursuant to
FASB ASC 360-10-50-2, or of the qualitative and quantitative
information that would be
necessary to understand the estimation uncertainty and the impact the
critical accounting
estimate has had or is reasonably likely to have on your financial
condition or results of
operations, as would be required to comply with Item 303(b)(3) of
Regulation S-K.
We understand that the amounts you have capitalized for the mineral
property represent
acquisition costs incurred predominantly in 2006, 2011 and 2012, and
that the balance has
remained relatively unchanged for over ten years. We see that the
balance exceeds the net
present values associated with the Base Case disclosed on pages 19-7,
22-7, 22-7, and 138
of your pre-feasibility studies dated October 29, 2021, March 8, 2017,
September 8, 2016,
and September 4, 2013, respectively, as calculated using a discount
rate of 5%. We also
note disclosures on pages 51 and 67, explaining that you have incurred
losses and have
had no revenue from operations since inception, which you indicate was
in 1978, and that
you have not completed any material exploration on the property since
2012.
Given these various circumstances, it appears that you would need to
have conducted
impairment testing in accordance with FASB ASC 360-10-35-29 through 35
on a periodic
basis for an extended period of time. Please describe to us the extent
of any impairment
testing that you have conducted pursuant to this guidance since 2012,
provide us with the
analyses that either were conducted or that will be conducted for
recoverability as of the
end of your most recently completed fiscal year, and submit any
revisions that you
propose to clarify your efforts and the results of your impairment
testing in this regard.
4. We note your disclosure on page 51, referring to the document you
filed as Exhibit
96.1, stating that although the Technical Report Summary underlying
your disclosures of
proven and probable reserves indicates the project would generate "a
minimal positive
return" using a gold price of $1,680 per ounce, the company "...would
need to see higher
gold prices over a sustained period for the Project to be commercially
viable."
Karl Hanneman
FirstName LastNameKarl Hanneman
International Tower Hill Mines Ltd.
Comapany
August NameInternational Tower Hill Mines Ltd.
3, 2023
August
Page 3 3, 2023 Page 3
FirstName LastName
As the definition of preliminary feasibility study in Item 1300 of
Regulation S-K depends
on the qualified person having determined that extraction of the
mineral reserve is
economically viable under reasonable investment and market
assumptions, it is unclear
how your position with regard to the price that would yield a
commercially viable
project would be consistent with reporting proven and probable
reserves. It is also unclear
how the Base Case that is shown on page 19-7 of the Technical Report
Summary showing
an after-tax net present value of $44.6 million and an internal rate
of return of 5.3%,
while assuming that the discount rate would be 5%, would need to
change when using a
discount rate that is reflective of and consistent with the project
uncertainties and risk.
Please consult with the qualified person involved in preparing the
Technical Report
Summary regarding these observations and describe for us the
assessments that were
made in considering these factors and establishing correlation between
the discount rate
and the uncertainties and risk of the project; or explain to us how
this would need to
change to reflect reasonable investment and market assumptions.
Please explain to us how you would reasonably expect to obtain
financing for the project
based on the economics illustrated in the Base Case, if this is your
view.
5. We note that your description of cash equivalents on page 49
encompasses "highly liquid
investments with original maturities of twelve months or less," which
diverges from the
definition provided in the FASB Master Glossary, which generally
includes only
investments with original maturities of three months of less.
Please submit the revisions that you propose to your financial
presentation and the
associated disclosures elsewhere in the filing that would be necessary
to conform with this
guidance, or explain to us why you believe it would not apply to you.
Exhibit 96.1 Livengood Gold Project, page 63
6. The Technical Report Summary that you have filed as support for your
disclosures of
mineral resources and reserves does not include all of the content
prescribed by Item
601(b)(96) of Regulation S-K. We have identified the information that
should be provided
in the remaining comments in this letter. Please discuss these
observations with the
qualified persons involved in preparing the report and arrange to
obtain and file a revised
Technical Report Summary that includes all of the required
information.
You may submit a draft of the revised report for review prior to
filing your amendment.
Section 6 - Geological Setting and Mineralization and Deposit
6.1.2 Mineralization and Alteration, page ES-6
7. At least one stratigraphic column is required to comply with Item
601(b)(96)(iii)(B)(6)(iii)
of Regulation S-K.
Karl Hanneman
International Tower Hill Mines Ltd.
August 3, 2023
Page 4
Section 10 - Mineral Processing and Metallurgical Testing
10.8 Opportunities for Further Investigation, page ES-10
8. The opinion of the qualified person on the adequacy of the data is
required by Item
601(b)(96)(iii)(B)(10)(v) of Regulation S-K.
Section 12 - Mineral Reserve Estimates
12.3.3.6 Open Pit Design Results, page ES-12
9. The opinion of the qualified person on how the mineral reserve
estimates could be
materially affected by risk factors associated with any aspect of the
modifying factors or
changes therein is required by Item 601(b)(96)(iii)(B)(12)(vi) of
Regulation S-K.
Section 17 - Environmental Studies, Permitting, and Plans, Negotiations, or
Agreements with
Local Individuals or Groups, page ES-17
10. The opinion of the qualified person as to the adequacy of current
plans to address any
issues related to environmental compliance, permitting, and local
individuals or groups is
required by Item 601(b)(96)(iii)(B)(17)(vi) of Regulation S-K.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact George K. Schuler, Mining Engineer at (202) 551-3718 if
you have
questions regarding comments on your mineral property information. You may
contact Jenifer
Gallagher, Staff Accountant at (202) 551-3706 or Karl Hiller, Branch Chief at
(202) 551-3686 if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNameKarl Hanneman Sincerely,
Comapany NameInternational Tower Hill Mines Ltd.
Division of
Corporation Finance
August 3, 2023 Page 4 Office of Energy
& Transportation
FirstName LastName