SEC Comment Letter for Caledonia Mining Corp Plc (CMCL) (CIK 0000766011) (CMCL) — Mar 13, 2007
Caledonia Mining Corp Plc (CMCL) (CIK 0000766011)
Date: March 13, 2007 · CIK: 0000766011 · Accession: 0000000000-07-012863
AI Filing Summary & Sentiment
Reasoning
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE Mail Stop 7010 March 13, 2007 By US Mail and Facsimile Carl R. Jonsson Tupper Jonsson & Yeadon Barristers & Solicitors An Association of Lawyers and Law Corporations 1710 - 1177 West Hastings Street Vancouver, B.C. V6E 2L3 Tel: (604) 640-6357 Fax: (604) 681-0139
Re: Caledonia Mining Corporation Form 20-F for the Fiscal Year Ended December 31, 2005 Filed April 21, 2006 Response letter filed 3/9/07 File No. 0-13345
Dear Mr. Jonsson:
We have limited our review of your filings to those issues we have addressed in our comment. Where indicated, we think you should revise your document in response to this comment. If you disagree, we will cons ider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as detailed as necessary in your explanation. In our comment, we may ask you to provide us with information so we may better understand your disclosure. After re viewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filing. We look forward to working with you in these respects. We welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Carl Jonsson Caledonia Mining Corporation March 13, 2007 Page 2 Form 20-F for the Fiscal Year Ended December 31, 2005
General
1. Based on our phone discussion with Mr. Jonsson on March 8, 2007, and viewing the letter you submitted on EDGAR on March 9, 2007, we understand that you have not provided the information re quested in our December 12, 2006 comment letter because you decided to permanently close the Barbrook mine. However, during our phone discussion, you further cl arified that although you believed the mine could be made profitable, based on discussions with your technical staff, you did not actually have a mine plan, cash flow projection or feasibility study to support the characterization of mineralization as reserves, as defined in Industry Guide 7. We also understand that du ring 2005 and earlier, you had found that carbon in the gold mineralization made it difficult to recover gold in the metallurgical plant in quantities or yields originally anticipated, and which would be necessary to have a profitable operation.
Based on your representations, we do not believe you have complied with the provisions of Industry Guide 7, in having reported reserves fo r the Barbrook mine as of December 31, 2005, or at any earlier point. As you know, we provided you with detailed guidance on the reserve definitions and disclosure requirements in our April 28, 2005 comment letter, during a review of your 2004 Form 20-F; we do not see that you have taken this in to account. Unless you can demonstrate otherwise, we believe that you will need to amend your 2005 Form 20-F to (i) remove the reserve quantities attributed to this mine, and (i i) explain that the reserve quantities originally reported did not meet the reserve definitions in Industry Guide 7, for U.S. reporting purposes.
Under these circumstances, you should also revisit your accounting policy for costs incurred prior to establishing re serves, and the impa irment testing you completed under SFAS 144 and EITF 04-3 as of each balance sheet date presented, and revise your U.S. GAAP accounting to the extent you are not able to support the characterizati on of costs you had capitalized for the Barbrook mine. Any adjustments should be reported as erro r corrections, with a reconciliation of the previously reported to the restated amounts, along with an explanation of the change. Please ensure that you obtai n an updated audit and report from the independent accountants to incl ude with your amendment.
Mr. Carl Jonsson Caledonia Mining Corporation March 13, 2007 Page 3 Closing Comments
Please amend you Form 20-F within 10 days of the date of this letter, or tell us when you will respond. You may wish to pr ovide us with marked copies of the amendment to expedite our review. Please furnish a cover letter with your amendment that keys your responses to our comment s and provides any requested information. Detailed cover letters greatly facilitate our review. Please understa nd that we may have additional comments after reviewing your amendment and responses to our comments.
Please contact Nasreen Mohammed at ( 202) 551-3773, or in her absence, Karl Hiller at (202) 551- 3686 with any questions on the financial statements. You may contact Roger Baer, Mining Engineer, at (202) 551-3705 with questions about engineering comments. Sincerely,
Karl Hiller Branch Chief
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 7010
March 13, 2007
By US Mail and Facsimile
Carl R. Jonsson
Tupper Jonsson & Yeadon Barristers & Solicitors An Association of Lawyers and Law Corporations 1710 - 1177 West Hastings Street Vancouver, B.C. V6E 2L3 Tel: (604) 640-6357 Fax: (604) 681-0139
Re: Caledonia Mining Corporation
Form 20-F for the Fiscal Year Ended December 31, 2005
Filed April 21, 2006
Response letter filed 3/9/07
File No. 0-13345
Dear Mr. Jonsson:
We have limited our review of your filings to those issues we have addressed in
our comment. Where indicated, we think you should revise your document in response to
this comment. If you disagree, we will cons ider your explanation as to why our comment
is inapplicable or a revision is unnecessary. Please be as detailed as necessary in your
explanation. In our comment, we may ask you to provide us with information so we may
better understand your disclosure. After re viewing this information, we may raise
additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filing. We look forward to working with you in these respects. We
welcome any questions you may have about our comments or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Mr. Carl Jonsson
Caledonia Mining Corporation
March 13, 2007 Page 2
Form 20-F for the Fiscal Year Ended December 31, 2005
General
1. Based on our phone discussion with Mr. Jonsson on March 8, 2007, and viewing
the letter you submitted on EDGAR on March 9, 2007, we understand that you have not provided the information re quested in our December 12, 2006 comment
letter because you decided to permanently close the Barbrook mine. However,
during our phone discussion, you further cl arified that although you believed the
mine could be made profitable, based on discussions with your technical staff,
you did not actually have a mine plan, cash flow projection or feasibility study to
support the characterization of mineralization as reserves, as defined in Industry
Guide 7. We also understand that du ring 2005 and earlier, you had found that
carbon in the gold mineralization made it difficult to recover gold in the
metallurgical plant in quantities or yields originally anticipated, and which would
be necessary to have a profitable operation.
Based on your representations, we do not believe you have complied with the provisions of Industry Guide 7, in having reported reserves fo r the Barbrook mine
as of December 31, 2005, or at any earlier point. As you know, we provided you with detailed guidance on the reserve definitions and disclosure requirements in
our April 28, 2005 comment letter, during a review of your 2004 Form 20-F; we
do not see that you have taken this in to account. Unless you can demonstrate
otherwise, we believe that you will need to amend your 2005 Form 20-F to (i)
remove the reserve quantities attributed to this mine, and (i i) explain that the
reserve quantities originally reported did not meet the reserve definitions in Industry Guide 7, for U.S. reporting purposes.
Under these circumstances, you should also revisit your accounting policy for costs incurred prior to establishing re serves, and the impa irment testing you
completed under SFAS 144 and EITF 04-3 as of each balance sheet date presented, and revise your U.S. GAAP accounting to the extent you are not able
to support the characterizati on of costs you had capitalized for the Barbrook mine.
Any adjustments should be reported as erro r corrections, with a reconciliation of
the previously reported to the restated amounts, along with an explanation of the
change. Please ensure that you obtai n an updated audit and report from the
independent accountants to incl ude with your amendment.
Mr. Carl Jonsson
Caledonia Mining Corporation
March 13, 2007 Page 3
Closing Comments
Please amend you Form 20-F within 10 days of the date of this letter, or tell us
when you will respond. You may wish to pr ovide us with marked copies of the
amendment to expedite our review. Please furnish a cover letter with your amendment
that keys your responses to our comment s and provides any requested information.
Detailed cover letters greatly facilitate our review. Please understa nd that we may have
additional comments after reviewing your amendment and responses to our comments.
Please contact Nasreen Mohammed at ( 202) 551-3773, or in her absence, Karl
Hiller at (202) 551- 3686 with any questions on the financial statements. You may
contact Roger Baer, Mining Engineer, at (202) 551-3705 with questions about
engineering comments.
Sincerely,
Karl Hiller
Branch Chief