September 16, 2005
Mr. D. Mark Bristow
Chief Executive Officer
Randgold Resources Limited
La Motte Chambers
La Motte Street
St. Helier, Jersey JE1 1BJ
Channel Islands
Re: Randgold Resources Limited
Registration Statement on Form F-3
Filed August 19, 2005
File No. 333-127711
Annual Report on Form 20-F for the year ended December 31,
2004
Filed June 29, 2005
File No. 0-49888
Dear Mr. Bristow:
We have limited our review of the above filings to only the
areas upon which we have issued comments. Where indicated, we
think
you should revise your documents in response to these comments.
If
you disagree, we will consider your explanation as to why our
comment
is inapplicable or a revision is unnecessary. Please be as
detailed
as necessary in your explanation. In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure. After reviewing this information, we
may
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any
questions you may have about our comments or on any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form F-3
General
1. We will not be in a position to declare the Form F-3
registration
statement effective until you respond to all comments in this
letter
and until you comply with all comments we issued relating to your
annual report on Form 20-F for the year ended December 31, 2004.
Principal Shareholders, page 36
2. We note that you have requested supporting documentation from
Randgold Resources (Holdings) Limited, a subsidiary of Randgold &
Exploration Company Ltd., for its claimed holdings of your
ordinary
shares as stated in its Schedule 13G/A filed on February 14, 2005.
In
this regard, provide us with the following information:
* the date you made your request;
* the current status;
* the procedures you use to determine shareholder information,
including the identity of holders, amount held and percentage of
ownership;
* a detailed explanation of any relationship, past or present,
between
Randgold & Exploration Company Ltd. and Randgold Resources
(Holdings)
Limited, including relationships between either entity and any
officers or affiliates of the other entity; and
* what your records indicate with respect to the correct ownership
information regarding the disputed shares.
We may have additional comments.
3. We note as of July 31, 2005, there were three record holders of
your ADRs in the United States, holding an aggregate of 44,128,777
ADRs or 74.04%. Revise to identify these holders and to disclose
the
percentage held by each.
Part II
Signatures, page, II-III
4. The signature page must include signatures by all who sign in
each
of the capacities specified by Form F-3. In addition, when
individuals sign in more than one capacity, each capacity must be
identified. Revise to identify for each signatory all required
capacities in which he or she is signing for the company. For
additional guidance, see Instructions 1 and 2 to Signatures, Form
F-3.
5. Please include updated consents from your independent auditor.
Form 20-F for the Year Ended December 31, 2004
Selected Financial Data, page 1
6. We note your disclosure of total cash costs per ounce, which
removes certain recurring operating expenses. Demonstrate to us
how
the removal of recurring operating expenses is appropriate and
complies with Commission rules and guidance. Please refer to
General
Instruction C(e) to Form 20-F and Question 8 of the Frequently
Asked
Questions Regarding the Use of Non-GAAP Financial Measures. Also
refer
to Item 10(e) of Regulation S-K. This comment applies to your like
disclosure in your Form F-3.
7. We note your disclosure that references The Gold Institute.
Our
understanding is that this organization is no longer active.
Please
revise your disclosure to indicate the nature of the organization
and
its current status of this organization.
Operating and Financial Review and Prospects
Amortization of Mining Assets, page 44
8. Clarify what you mean by your statement "interpretation of
Industry
Guide 7."
9. We note that you use the units of production method to amortize
a
portion of your capital assets. Expand your disclosure to clarify
when a unit is considered to be "processed through the plant" to
trigger recording depreciation, depletion and amortization
expense.
Note that for U.S. GAAP purposes, an item is considered to be
"produced" for purposes of calculating your depreciation,
depletion
and amortization at the time it is physically removed from the
mine.
These costs should then be classified as inventory and subject to
inventory valuation in accordance with ARB 43 for US GAAP. Note
that
this was addressed in a discussion of stockpiled inventory at the
Appendix to November 25, 2002 International Practices Task Force
meeting. Highlights for this meeting can be located at:
http://www.aicpa.org/download/belt/2002_11_25.pdf. If you require
additional clarification, please contact us at your convenience.
10. Please tell us why you believe your policy is in accordance
with
IFRS standards. Also, please quantify and tell us the amount of
any
difference that may exist between your policy and U.S. GAAP.
Deferred Stripping Costs, page 44
11. Clarify whether or not deferred stripping costs are
capitalized as
part of your inventory as the ore is mined. Please support your
conclusion that it is appropriate to match the deferred stripping
costs to the sale of each ounce of gold, rather than the removal
of
each ounce from the mine. Support your conclusion that your
accounting is permitted under both IFRS and US GAAP.
12. Disclose the impact to earnings for each period if you did not
defer stripping costs.
Operating Results
Years Ended December 31, 2004 and 2003
Depreciation and Amortization, page 49
13. Please tell us the nature and amounts of the asset
reclassifications that occurred in 2003.
General and Administrative Expenses, page 49
14. Please clarify to us the nature of the custom duties that you
are
recognizing as a component of G&A expense. In addition, tell us
why
you have classified environmental expenses as G&A costs.
Minority Interests, page 50
15. Please clarify to us in detail the nature of the costs that
were
capitalized related to the construction of the Loulo mine.
Financial Statements
General
16. Please be advised that certain comments below apply equally to
both the consolidated company and the significant subsidiary
presented. Duplicative comments have not been provided. Please
address each comment as it applies to both entities where
appropriate.
Consolidated Statements of Operations, page F-2
17. Please tell us why you believe it is appropriate to include
the
items other than product sales as components of revenue.
Consolidated Statements of Shareholders` Equity, page F-4
18. We note that you subdivided your shares during April 2004.
Please
explain why this change in your capital structure was not
retroactively reflected in your financial statements and
information.
We note that your calculations of EPS appear to reflect this
change.
Refer to SAB Topic 4:C for US GAAP.
19. Please address your 2004 capital reduction in your
reconciliation
to US GAAP.
Note 2 - Significant Accounting Policies
Property, Plant and Equipment, page F-8
20. We note your policy that considers costs incurred to define
mineralization in existing ore bodies as a development cost. It
appears from your disclosure here and in Note 5, that you are
referring to "around mine exploration." Please clarify why you
believe this is appropriate under IFRS. In addition, please note
that
under U.S. GAAP, all exploration costs shall be expensed as
incurred.
21. Please clarify to us and in your document the nature of the
assets
you describe as having economic lives which exceed that of the
life of
the mine.
22. Please clarify to us and in your document the reserve base
used in
your depreciation calculation. Clarify if you are using total
proven
and probable reserves or developed proven and probable reserves.
23. Tell us the various asset categories you have identified as a
result of your adoption of IFRS and the depreciation and
amortization
base associated with each category.
24. We note your recoverability testing that compares your
carrying
amounts to the value in use amount. Please tell us how your value
in
use amounts compare to fair value as required by paragraph 7 of
SFAS
144 for U.S. GAAP. Tell us and disclose if material, the amount
of
any U.S. GAAP difference that results from these two values.
25. We note your use of the Group`s weighted average cost of
capital
as the discount rate in assessing the value in use on page F-9 of
your
document. Please tell us how this compares to the discount rate
used
in your fair value analysis. Note that under U.S. GAAP, a fair
value
should be determined using the cost of capital of willing and able
market place participants.
Deferred Stripping Costs, page F-9
26. Please expand your disclosure clarify what exactly the numeric
stripping ratio represents and how it is calculated. In addition,
expand your disclosure to indicate that your method of accounting
has
the effect of smoothing costs over the life of the project.
Expand
your disclosure to indicate how your method differs from others in
your industry.
Inventories, page F-9
27. Please modify your disclosures to define high and medium grade
ore. In addition, please reconcile the disclosure that indicates
all
stockpiles are expected to be fully processed with your disclosure
in
Note 8.
28. Disclose the types of costs capitalized as inventory.
Receivables, page F-10
29. Please tell us whether your method of determining the
provision
for impairment of accounts receivable results in a material
difference
for U.S. GAAP purposes.
Note 5 - Change in Accounting Policy, page F-14
30. In addition to our comment above that requests an
understanding of
why your accounting change associated with around mine exploration
is
appropriate, please also tell us why you believe your change in
accounting for exploration costs is the preferable method under
IFRS.
Note 7 - Receivables, page F-14
31. Please clarify to us the nature of the accounts receivable you
have identified as "Other".
Note 8 - Inventories and Ore Stockpiles, page F-15
32. Please modify your disclosures to indicate the amount of
inventories that represent the following:
* Ore on the leach pad
* Unprocessed raw ore
* Tailing that are subject to additional processing
Also, provide an understanding of the grade associated with each
class
of inventory you present.
Note 10 - Deferred Stripping Costs, page F-16
33. Please modify your disclosure to indicate the amounts of pre
and
post production stripping costs you have capitalized.
Note 24 - Reconciliations to U.S. GAAP, page F-28
34. We note your use of the equity method to account for your
investment in the Morila joint venture. We also noted in your
document a statement that indicates the equity method is required
under U.S. GAAP. Please tell us if you have considered the
guidance
of EITF 00-01 in making your determination.
Financial Statements of Societe des Mines de Morila S.A.
Report of the Independent Registered Public Accounting Firm, page
F-38
35. It appears that your auditors have provided a report that
opines
on two years of financial information and does not opine on the
Statement of Changes in Stockholders Equity. Please provide an
audit
report that opines on all years audited and presented, and covers
all
financial statements that are required to be filed.
Note 5 - Environmental Rehabilitation Provision, page F-48
36. Please clarify to us why no liabilities were incurred in 2004.
It
appears from your document that mining activities occurred during
the
period.
Note 17 - Notes to the Cash Flow Statement, page F-54
37. Please tell us the nature of the line item described as "TSF
gold
in process provision".
Note 23 - Reconciliation to U.S. GAAP, page F-56
38. It appears you have not provided a cash flow statement or
reconciliation for your significant subsidiary. Please refer to
(c)(2)(iii) and (c)(2)(vi) of Item 17 of Form 20-F.
Engineering Comments
General
39. For the property, provide the disclosures required by Industry
Guide 7 (b). In particular, provide:
* The location, means of access to the property, and
transportation
from the property.
* Any conditions that must be met in order to obtain or retain
title
to the property.
* 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.
* Provide a description of equipment and other infrastructure
facilities.
* The current state of exploration of the property.
* The total cost of the property incurred to date and 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.
Refer to Industry Guide 7 (b) (1)-(5) for specific guidance.
Industry
Guide 7 can be reviewed on the Internet at
http://www.sec.gov/divisions/corpfin/forms/industry.htm#secguide7.
40. Insert a small-scale map showing the location and access to
the
property. Note that SEC`s EDGAR program now accepts digital maps,
so
please include these maps in any future 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 the figures and/or 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 202-942-8900. Otherwise,
provide the map to the staff for review.
Overview, page 13 & Exploration page 23
41. Describe the proven and probable reserves as a quantity
(tonnage)
and quality (grade) of economic material. If ounces of saleable
product are described disclose the appropriate metallurgical
recoveries. If the ounces of gold are contained in the ore prior
to
processing, disclose that fact clearly and disclose the
metallurgical
recovery in the filing. Disclose the stripping ratio for the open
pit
mines, all stockpiled tonnages, and the associated material grades
with the reserve estimates.
Senegal, page 34
42. You disclose sample results in the fifth paragraph in parts
per
billion. As a general checklist, when reporting the results of
sampling and chemical analyses:
* Disclose only weighed-average sample analyses associated with a
measured length or a substantial volume.
* Eliminate all analyses from "grab" or "dump" samples, unless the
sample is of a substantial and disclosed weight.
* Eliminate all disclosure of the highest values or grades of
sample
sets.
* Eliminate grades disclosed as "up to" or "as high as."
* Eliminate statements containing grade and/or sample-width
ranges.
* Aggregated sample values from related locations should be
aggregated
based on a weighted average of lengths of the samples.
* Generally, use tables to improve readability of sample and
drilling
data.
* Soil samples may be disclosed as a weighted average value over
an
area.
* Refrain from reporting single soil sample values.
* Convert all ppb quantities to ppm quantities for disclosure.
Revise the text accordingly.
Closing Comments
As appropriate, please amend the above filings in response
to
these comments. You may wish to provide us with a marked copy of
the
amendments to expedite our review. Please furnish a cover letter
with
your amendment that keys your responses to our comments and
provides
any requested information. Detailed cover letters greatly
facilitate
our review. Please understand that we may have additional
comments
after reviewing your amendment and responses to our comments.
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 all information required under the Securities Act of 1933
and
that they have provided all information investors require for an
informed investment decision. 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.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the company may not assert staff comments and the declaration of
effectiveness as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the
United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division
of Corporation Finance in connection with our review of your
filing or
in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they relate to the proposed public
offering of
the securities specified in the above registration statement. We
will
act on the request and, pursuant to delegated authority, grant
acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please contact Kevin Stertzel at (202) 551-3723 or Jill
Davis,
Branch Chief, at (202) 551-3683 if you have questions regarding
comments on the financial statements and related matters. Please
contact George Schuler, Mining Engineer, at (202) 551-3718 if you
have
questions regarding the engineering comments. Please contact
Jason
Wynn at (202) 551-3756 or Timothy Levenberg, Special Counsel, at
(202)
551-3707 with any other questions. Direct all correspondence to
the
following ZIP code: 20549-7010.
Sincerely,
H. Roger Schwall
Assistant Director
cc: J. Wynn
K. Stertzel
J. Davis
K. Schuler
T. Levenberg
via facsimile
Steven I. Suzzan, Esq.
Fulbright & Jaworski LLP
(212) 318-3400
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Mr. D. Mark Bristow
Randgold Resources Limited
September 16, 2005
page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
MAIL STOP 7010