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    Unassociated Document

    December
14, 2009

    VIA EDGAR
AND TELEFAX

    (202)
772-9210

    Mark C.
Shannon

    Branch
Chief

    United
States Securities and Exchange Commission

    Washington,
D.C. 20549

    Mailstop
4628

    Re:          Goldspring,
Inc.

    Form 10-K for Fiscal Year Ended
December 31, 2008, As Amended

    Filed April 15, 2009

    Form 10-Q Fiscal Quarter Ended June 30,
2009

    Filed August 14, 2009

    File No. 000-32429

    Dear Mr.
Shannon:

    Pursuant to your request, find below
our response to the SEC Comment Letter dated November 3, 2009. Once again, we
thank you for taking time out of your busy schedule yesterday to assist us in
improving our financial reporting.  Your input is invaluable to us in
our efforts to fully comply with SEC regulations and also to improve the quality
of our disclosure documents.

    Form
10-K for the Fiscal Year Ended December 31, 2008

    General

              1.

              To
      minimize the likelihood that we will reissue comments, please make
      corresponding changes where applicable throughout your document. For
      example, we might comment on one section or example, but our silence on
      similar or related disclosure elsewhere does not relieve you of the need
      to make appropriate revisions elsewhere as
  appropriate.

    We will insure that all the changes are
reflected in future filings.

    Cover
page

              2.

              Please
      tell us why you qualify as a smaller reporting company at December 31,
      2008. In this regard, we note that the aggregate market value of your
      outstanding shares held by non-affiliates as of June 30, 2008 was in
      excess of $75 million.

      GoldSpring,
Inc P.O. Box 1118 ~ Virginia City, NV 89440 ~ T: 775.847.5272 F:
775.847.4762 www.goldspring.us

    Under
Rel. No. 33-8876, page 40, a smaller reporting company becomes a larger
reporting company as of the first fiscal quarter following the date of
determination.  This is also consistent with Item 10(f)(2)(i) of Regulation
S-K.

    Thus, the
Company was not required to fulfill the large reporting company requirements
until 10-Q for the first quarter of 2009.

    Consolidated Balance Sheets,
page F-2

              3.

              Please
      add disclosure in your filing, where applicable, to explain the nature of
      the new line item titled 'Other Long-Lived Assets,' totaling $489,236. In
      responding to this comment, please provide a draft of your proposed
      disclosure, or explain to us why you do not believe expanded disclosure is
      necessary.

    In order
to improve the clarity of our balance sheet and footnotes, we will change the
title to “Long-lived Deferred Reclamation Expense”.  Second, I believe
the amount noted in your comment represents Plant and equipment,
net.  The line item titled “Other Long-Lived Assets” at December 31,
2008 totals $408,190.  Our disclosure will be amended as
follows:

    Note
8 — Long-lived Deferred Reclamation Expense and Long-term Reclamation
Liability

    We have
an accrued a long-term liability of $1,105,342 and $553,190 as of December 31,
2008 and 2007 respectively, with regard to our obligations to reclaim our
Comstock Mine facility based on our reclamation plan submitted and approved by
the Nevada State Environmental Commission and Division of Environmental
Protection in 2008.  In conjunction with recording the reclamation
liability we recorded a deferred reclamation expense of which the value is being
amortized over the period of the anticipated land disturbance. Correspondingly,
a long-lived deferred reclamation expense of $476,222 was recorded in
2008.  Costs of future expenditures for environmental remediation are
discounted to their present value. Such costs are based on management’s current
estimate of amounts expected to be incurred when the remediation work is
performed within current laws and regulations. It is reasonably possible that,
due to uncertainties associated with the application of laws and regulations by
regulatory authorities and changes in reclamation or remediation technology, the
ultimate cost of reclamation and remediation could change in the future. We
periodically review accrued liabilities for such reclamation and remediation
costs as evidence becomes available indicating that our liabilities have
potentially changed.  The reclamation liability accretion expense for
2008 was $75,930 and the amortization of long-lived deferred reclamation expense
was $68,032 for 2008.

    Following
is a reconciliation of the aggregate retirement liability associated with on our
reclamation plan for our Comstock Project:

              2008

              Long-term
      reclamation obligation 1/1/2008

              $

              553,190

              Additional
      obligations incurred

              476,222

              Liabilities
      settled during the period

              -

              Increase
      in present value of the reclamation obligation (accretion
      expense)

              75,930

              Long-term
      asset retirement obligation 12/31/2008

              $

              1,105,342

          2

    Following
is a reconciliation of the aggregate long-lived deferred reclamation expense
associated with on our reclamation plan for our Comstock Project:

              2008

              Net
      long-lived deferred reclamation expense 1/1/2008

              $

              -

              Additional
      obligations incurred

              476,222

              Amortization
      of deferred reclamation expense

              (68,032

              )

              Long-term
      asset retirement obligation 12/31/2008

              $

              408,190

    Consolidated Statements of
Operations, page F-4

              4.

              We
      note the new line item in 2008 captioned 'Derivative Change in Fair Value'
      totaling $(31,965). We also note the line item you report as 'Derivative
      liability' increased $4,591,948 during the periods presented. Please
      explain to us why the line item on your consolidated statements of
      operations did not change relative to the change in the derivative
      liability balance. In addition, please explain why you believe it is
      appropriate to reflect approximately $6.3 million related to the fair
      value calculation for convertible features contained in your various notes
      within the line item captioned 'Interest expense.' Your response should
      separately address each instrument that contributed to the change in
      derivative liability and recorded interest
  expense.

    We have
reviewed your comment wherein you ask use to explain why the line item on our
consolidated statements of operations did not change relative to the change in
derivative liability balance.

    The
addition to the amount carried on the consolidated balance sheet as derivative
liability increased as of the result of new notes issued.  The offset
to the derivative liability would ordinarily be note discount which would reduce
the reported outstanding debt and adjust the effective interest
rate.  Because these notes are immediately in default and subject to a
repayment demand, we do not accrete the note discount but rather make an
immediate charge to interest expense, again to reflect the effective rate of our
debt.  Please note that our reported interest expense is in excess of
$9 million.   A significant portion of our interest expense is a
result of the immediate expensing of debt discount.

    We
appreciate your observations and in future fillings we will broaden our Note 16
–Embedded Derivatives to include a table that reports the derivative liability
increase or decrease during the reporting period as well as the associated
impact on the statement of operations related to such liabilities, specifically,
interest expense and increase or decrease in revaluing derivative
liabilities.  This table, prepared for the years ended December 31,
2007 and 2008, is as follows:

              As
      of December 31, 2008

              Derivative
      liability at 1/1/2008

              $

              127,136

              Additional
      obligations incurred

              4,591,948

              Total
      derivative liability at 12/31/2008

              $

              5,368,333

          3

    Note 3 - Summary of
Significant Accounting Policies, page F-8

    Recent Authoritative
Pronouncements, page F-12

    Fair Value Measurements,
page F-16

              5.

              Please
      tell us how you considered the disclosure requirements of paragraphs 32
      through 35 of SF AS 157.

    NOTE XXX – FAIR VALUE OF FINANCIAL
INSTRUMENTS

    SFAS No.
157 defines fair value as the price that would be received upon sale of an asset
or paid upon transfer of a liability in an orderly transaction between market
participants at the measurement date and in principal or most advantageous
market for that asset or liability.  The fair value should be
calculated based on assumptions that market participants would use in pricing
the asset or liability, not on assumptions specific to the entity.  In
addition, the fair value of liabilities should include consideration of
non-performance risk, including the Company’s own credit risk.

    In
addition to defining fair value, SFAS No. 157 expands the disclosure
requirements around fair value and establishes a fair value hierarchy for
valuation inputs.  The hierarchy prioritizes the inputs into three
levels based on the extent to which inputs used in measuring fair value are
observable in the market.  Each fair value measurement is reported in
one of three levels, which is determined by the lowest level input that is
significant to the fair value measurement in its entirety.  These
levels are:

              ·

              Level
      1 – inputs are based upon unadjusted quoted prices for identical
      instruments traded in active
markets.

              ·

              Level
      2 – inputs are based upon quoted prices for similar instruments in active
      markets, quoted prices for identical or similar instruments in markets
      that are not active, and model-based valuation techniques for which all
      significant assumptions are observable in the market or can be
      corroborated by observable market data for substantially the full term of
      the assets or liabilities.

              ·

              Level
      3 – inputs are generally unobservable and typically reflect management’s
      estimates of assumptions that market participants would use in pricing the
      asset or liability.  The fair values are therefore determined
      using model-based techniques that include option pricing models,
      discontinued cash flow models, and similar
  techniques.

    The
following section describes the valuation methodologies the Company uses to
measure financial assets and liabilities at fair value.

    Derivatives

    The fair
values for the derivative liabilities included in Level 2 are estimated using
industry standard valuation models, such as the Black-Scholes-Merton
model.  Level 2 derivative liabilities primarily include certain
over-the-counter options.

    Derivative
liability represents the discount on convertible notes proceeds associated with
the fair value of the embedded derivative features consisting of warrants and
conversion rights bifurcated from the host instrument determined in accordance
with the guidance provided in SFAS 133 and EITF 00-19.

          4

    Liabilities
Measured at Fair Value on a Recurring Basis

    The
following table presents our liabilities at December 31, 2008, which are
measured at fair value on a recurring basis:

              Fair
      Value Measurements at December 31, 2008

              Total

              Level
      1

              Level 2

              Level
      3

              Liabilitites:

              Derivatives

            $
            5,368,333

            $
            -

            $
            5,368,333

            $
            -

              Total
      Liabilities:

            $
            5,368,333

            $
            -

            $
            5,368,333

            $
            -

    Note 10 - Convertible
Debentures, page F -20

    Convertible Notes Payable -
2008, page F-23

              6.

              We
      note your disclosure that because the notes issued to Winfield are
      convertible at the issuance date, you recorded the entire amount of the
      beneficial conversion feature as interest expense in fiscal 2008. We also
      note these notes appear to have a stated redemption date of two years from
      the date of issuance. Please tell us how you considered paragraph 6 of
      EITF 08-4 with respect to these
notes.

    We have
reviewed your comment wherein you ask use to explain how we considered paragraph
6 of EITF 08-4 with respect to the Winfield notes.  The guidance
offered in paragraph 6 of EITF 08-4, states that  “For convertible instruments that
have a stated redemption date, a discount resulting from recording a beneficial
conversion option shall be required to be amortized from the date of issuance to
the stated redemption date of the convertible instrument, regardless of when the
earliest conversion date occurs.”

    We
understand this guidance however we also considered the fact that the note was
in default in regards to both the failure to make required interest payments and
because certain clauses stipulated that any default in other notes triggered a
default in these notes.  Because the notes were in default, they
immediately became redeemable.  We determined that such a change did
not merely create an earlier opportunity to convert but rather, in effect,
overrode the original terms of the note, specifically the stated redemption
date, and reset that redemption date to immediately
redeemable.   Accordingly, since the notes were deemed
immediately redeemable, we recorded the entire amount of the beneficial
conversion feature as interest expense in fiscal 2008.

    Note 16 - Embedded
Derivatives, page F-31

              7.

              We
      note the reference you make to your "Derivative liability" of $4,435,194
      in this footnote does not equal the amount presented on your Consolidated
      Balance Sheets of $5,368,333. We further note your reference to footnotes
      9 and 11 do not include disclosure to explain the nature of this line
      item. Please expand this footnote to clearly explain to the reader the
      nature of the line item captioned "Derivative liability" and the material
      accounting methodology you have applied for each of the periods
      presented.

          5

    Our
footnote should have reported a derivative liability of $5,368,333, consistent
with the derivative liability reported on our balance sheet.

    Note 16- Derivative
liability

    “Derivative
liability” totaling $5,368,333 at December 31, 2008 represents the discount on
convertible notes proceeds associated with the fair value of the embedded
derivative features consisting of warrants and conversion rights bifurcated from
the host instrument determined in accordance with the guidance provided in SFAS
133 and EITF 00-19.

    Note 18 - Stock Warrants,
page F-33

              8.

              We
      note your disclosure in this footnote which indicates you recognized
      $1,129,220 in warrant expense during 2008, and your presentation of this
      expense on your Consolidated Statements of Operations as 'Financing cost -
      warrant issuances.' We further note disclosure in your filing indicating
      you raised a total of $1,520,000 in exchange for issuing 137,000,000
      shares of your common stock and 84,200,000 warrants. Please explain to us
      i