<SEC-DOCUMENT>0001144204-16-127176.txt : 20161215
<SEC-HEADER>0001144204-16-127176.hdr.sgml : 20161215
<ACCEPTANCE-DATETIME>20161006123840
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001144204-16-127176
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20161006

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DGSE COMPANIES INC
		CENTRAL INDEX KEY:			0000701719
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-JEWELRY STORES [5944]
		IRS NUMBER:				880097334
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		15850 DALLAS PARKWAY
		STREET 2:		SUITE 140
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75248
		BUSINESS PHONE:		9725874049

	MAIL ADDRESS:	
		STREET 1:		15850 DALLAS PARKWAY
		STREET 2:		SUITE 140
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75248

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DALLAS GOLD & SILVER EXCHANGE INC /NV/
		DATE OF NAME CHANGE:	19930114

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN PACIFIC MINT INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CANYON STATE CORP
		DATE OF NAME CHANGE:	19860819
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
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                                         Arts Plaza</FONT><FONT STYLE="font-size: 6pt"><BR>
                                         <FONT STYLE="text-transform: uppercase">1722 Routh Street &#9679; Suite 1500</FONT><BR>
                                         <FONT STYLE="text-transform: uppercase">Dallas, Texas 75201</FONT></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt; text-transform: uppercase">214.969.1700</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt; text-transform: uppercase">FAX
        214.969.1751</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 6pt">www.tklaw.com</FONT></P></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">October 6, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I><U>Via EDGAR Transmission and Electronic
Mail</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mara L. Ransom</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Assistant Director</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Office of Consumer Products</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">United States Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Division of Corporation Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Re:</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DGSE
                                         Companies, Inc.</B></FONT></TD></TR>                                                                                                                                           <TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Preliminary
                                         Proxy on Schedule 14A</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Filed
                                         August 31, 2016</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>File
                                         No. 001-11048</B></FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dear Ms. Ransom:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On behalf of DGSE Companies,
Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;), we have the following responses to the comments of the Staff (the &ldquo;<B><I>Staff</I></B>&rdquo;)
of the Securities and Exchange Commission (the &ldquo;<B><I>Commission</I></B>&rdquo;) with regard to the Company&rsquo;s Preliminary
Proxy Statement on Schedule 14A filed with the Commission on August 31, 2016 (the &ldquo;<B><I>Proxy Statement</I></B>&rdquo;).
The Staff&rsquo;s comments were provided to the Company in a letter dated September 23, 2016 addressed to Matthew M. Peakes. Our
responses are based upon information provided to us by or on behalf of the Company. For the convenience of the Staff, the text
of the comments are reproduced in their entirety followed by our responses. Page references in the responses and references to
the Proxy Statement are to the most recent amended Proxy Statement filed on the date hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Proposal Two: Approval of Issuance
to Elemetal, LLC and NTR Metals, LLC&hellip;, page 24</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -67.7pt; color: #151515"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 67.7pt"><FONT STYLE="font-size: 10pt"><I>1.</I></FONT></TD><TD STYLE="text-align: justify"><I>In this proposal please include reference to the change in control associated with proposed
transactions with Elemetal and NTR. Further, please amend the proposal included on the proxy card to be sent to shareholders to
reference the change in control.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 24 to reflect that the proposed transactions with
Elemetal and NTR may be deemed to result in a change in control of the Company. The Company did not revise the Proxy Statement
to definitively state that the transactions would constitute a change in control due to the fact that Elemetal and its affiliates
may already be considered to control the Company. Pursuant to the definition of beneficial owner in Rule 13d-3 of the Securities
Exchange Act of 1934, Elemetal is considered to already have beneficial ownership of more than 50% of the Company&rsquo;s common
stock, notwithstanding the fact that a significant percentage of such beneficial ownership is based on an option with an exercise
price that is out of the money and is set to expire on October 25, 2016. The proxy card has also been revised to reflect the Staff&rsquo;s
comment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><I></I></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 50%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ms. Mara L. Ransom</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">October 6, 2016</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence -->&nbsp;</P></TD><TD STYLE="width: 50%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 67.7pt"><FONT STYLE="font-size: 10pt"><I>2.</I></FONT></TD><TD STYLE="text-align: justify"><I>Please disclose the exemption from the Securities Act of 1933 relied upon for the issuance of
shares pursuant to this proposal.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 24 to reflect that the shares of common stock of the
Company and the Warrant will be issued pursuant to an exemption from registration pursuant to Section 4(2) of the Securities Act
for transactions by an issuer not involving any public offering.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Background of the Transactions, page 25</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 67.7pt"><FONT STYLE="font-size: 10pt"><I>3.</I></FONT></TD><TD STYLE="text-align: justify"><I>We note your disclosure on page 26 that you received a letter of intent from Elemetal on January
25, 2016 which offered to satisfy the indebtedness under the Loan Agreement and NTR Loan with share issuances at $0.394 per share
of DGSE common stock. We also note the letter of intent received on April 13, 2016 included $0.41 per share. Please disclose the
reason(s) the per share price increased between the two offers.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.3pt; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 67.7pt"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 27 to reflect that meetings between the Company and
Elemetal occurred during the months of February and March 2016 during which negotiations took place regarding an increase in the
price per share of the Company&rsquo;s common stock and exercise price of the Warrant.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -67.7pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>The Special Committee&rsquo;s and Board of Director&rsquo;s
Reasons for the Transactions, page 29</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 4.3pt"></TD><TD STYLE="width: 67.7pt"><I>4.</I></TD><TD><I>Please discuss the alternative transactions contemplated by the Board of Directors in its evaluation of the terms of the
proposed transactions. In this regard, we note the disclosure on page 29 that the board in the course of its deliberations considered
&ldquo;the advantages and disadvantages of potential alternative transactions, such as obtaining debt financing from a third party
and the likelihood of obtaining such debt financing on favorable terms, or at all.&rdquo;</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -67.5pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 29 to reflect that the Board of Directors considered
alternatives to refinance the Company&rsquo;s indebtedness but ultimately concluded such alternatives would be difficult to accomplish
on favorable terms, or at all, based on discussions with lenders due to the Company&rsquo;s business and finances.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I></I></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 50%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ms. Mara L. Ransom</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">October 6, 2016</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence -->&nbsp;</P></TD><TD STYLE="width: 50%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><FONT STYLE="font-size: 10pt"><I>5.</I></FONT></TD><TD STYLE="text-align: justify"><I>As part of the Board of Director&rsquo;s consideration of the fact that Elemetal and NTR would
own a majority of the outstanding shares of common stock following the transactions, disclose whether the Board of Directors considered
this fact to be a beneficial or detrimental aspect of the transactions</I>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 29 to reflect that the Board of Directors considered
the fact that Elemetal and NTR would own a majority of the outstanding shares of common stock of the Company following the transactions
as a beneficial aspect of the transactions notwithstanding the additional control Elemetal would have.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I><U>Opinion of RGL Advisors, page 30</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><FONT STYLE="font-size: 10pt"><I>6.</I></FONT></TD><TD STYLE="text-align: justify"><I>Elaborate upon how your fairness advisor determined to adjust the Transaction Consideration,
a term which you do not appear to have defined, to $0.40 per share, in consideration of the warrant also being issued to Elemetal.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on page 30 to define Transaction Consideration as the &ldquo;financial
terms of the Transaction pursuant to the Agreement&rdquo; and on page 32 to reflect how the fairness advisor considered the potentially
dilutive impact of the Warrant in adjusting the price per share from $0.42 to $0.40. The Warrant was valued as of the date of the
fairness opinion under several scenarios using a Black-Scholes pricing framework, taking into account the specific features of
the warrant.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><FONT STYLE="font-size: 10pt"><I>7.</I></FONT></TD><TD STYLE="text-align: justify"><I>Elaborate upon how the fairness advisor arrived at the enterprise value to CY revenue multiple
range of 0.10x to 0.15x as well as a Price to 2017 estimated EBITDA multiple range of 8.0x to 9.0x, considering the acknowledgement
that none of the companies identified are directly comparable and the range of multiples from those companies varied widely. This
comment also applies to the Precedent Transaction Analysis discussion.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The Proxy Statement has been revised on pages 33 and 34 to reflect that the fairness advisor arrived
at the selected multiple ranges using its professional judgment after considering the observed comparable company multiples in
combination with the benchmarking characteristics of the Company relative to these comparable companies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I></I></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 50%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ms. Mara L. Ransom</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">October 6, 2016</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence -->&nbsp;</P></TD><TD STYLE="width: 50%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I><U>Appendix A</U></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in; color: #111111"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><FONT STYLE="font-size: 10pt"><I>8.</I></FONT></TD><TD STYLE="text-align: justify"><I>The staff notes the limitation on reliance by shareholders in the fairness opinion provided
by RGL Advisors. Because it is inconsistent with the disclosures relating to the opinion, the limitation should be deleted. Alternatively,
disclose the basis for RGL Advisors&rsquo; belief that shareholders cannot rely upon the opinion to support any claims against
RGL Advisors arising under applicable state law (e.g., the inclusion of an express disclaimer in Financial Advisor's engagement
letter with DGSE Companies, Inc). Describe any applicable state-law authority regarding the availability of such a potential defense.
In the absence of applicable state-law authority, disclose that the availability of such a defense will be resolved by a court
of competent jurisdiction. Also disclose that resolution of the question of the availability of such a defense will have no effect
on the rights and responsibilities of the board of directors under applicable state law. Further disclose that the availability
of such a state-law defense to RGL Advisors would have no effect on the rights and responsibilities of either RGL Advisors or the
board of directors under the federal securities laws.</I></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in; color: #111111"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B>Response:</B></TD><TD STYLE="text-align: justify">The fairness opinion provided by RGL Advisors has been revised to reflect that the fairness opinion
is furnished to the Special Committee in connection with its consideration of the Transaction and to otherwise revise the relevant
qualifications in the opinion consistent with the Staff's comment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #111111"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #111111"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #111111"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; color: #111111"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B><U>Closing</U></B></TD><TD></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in; color: #111111"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; color: #111111">On
behalf of the Company, we respectfully submit that the foregoing is appropriately responsive to the comments of the Staff and respectfully
request an opportunity to discuss these responses further with the Staff if, following a review of this information, the Staff
does not concur with the Company&rsquo;s views. In addition, we have attached a written &ldquo;Tandy representations&rdquo; statement
from the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font-size: 10pt"><TR STYLE="vertical-align: top; text-align: left"><TD STYLE="width: 50%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ms. Mara L. Ransom</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Securities and Exchange Commission</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">October 6, 2016</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Page <!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence -->&nbsp;</P></TD><TD STYLE="width: 50%; text-align: right">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Please direct any questions
or additional comments regarding this letter to the undersigned at (214) 969-1763.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 45%; padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="width: 55%; padding: 0; font-size: 10pt; text-align: justify; text-indent: 0">Sincerely,</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; font-size: 10pt; text-align: justify; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"></TD>
    <TD STYLE="padding: 0; text-indent: 0">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: justify"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: justify">/s/ Amy R. Curtis</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: justify"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; font-size: 10pt; text-align: justify; text-indent: 0">Amy R. Curtis</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Enclosure</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">cc:</TD><TD STYLE="text-align: justify">Daniel Porco, Staff Attorney</TD>
</TR>     <TR STYLE="vertical-align: top; text-align: justify">
<TD>&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: justify">Matthew M. Peakes, DGSE Companies, Inc.,
Chief Executive Officer</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>


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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DGSE COMPANIES, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>15850 DALLAS PARKWAY, SUITE 140</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DALLAS, TEXAS 75248</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">October 6, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Mara L. Ransom</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Assistant Director</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Office of Consumer Products</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">United States Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Division of Corporation Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 48px">&nbsp;</TD>
    <TD STYLE="width: 48px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Re:</B></FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>DGSE Companies, Inc.</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Preliminary Proxy on Schedule 14A</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Filed August 31, 2016</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>File No. 001-11048</B></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dear Ms. Ransom:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
responding to the comments of the Staff (the &ldquo;<B><I>Staff</I></B>&rdquo;) of the Securities and Exchange Commission (the
&ldquo;<B><I>Commission</I></B>&rdquo;) provided in a letter dated September 23, 2016 to Matthew M. Peakes with regard to the above-captioned
filing, DGSE Companies, Inc. (the &ldquo;<B><I>Company</I></B>&rdquo;) hereby acknowledges that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the Company is responsible for the adequacy and accuracy of the disclosure in the filing;</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">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</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">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.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0">Sincerely,</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0"></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0">DGSE Companies, Inc.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0"></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%">&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 10pt; width: 4%">By:</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 10pt; width: 30%; border-bottom: Black 1pt solid"> <U STYLE="text-decoration: none">/s/ Matthew M. Peakes&#9;</U></TD>
    <TD STYLE="width: 11%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 0.8pt; font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 0.8pt; font-size: 10pt">Matthew M. Peakes, Chief Executive Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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