On June 4, 2020, the Canadian Securities Administrators (CSA) issued a notice summarizing the results of a review on the mineral resource estimates disclosed in mining issuers’ technical reports under National Instrument 43-101 - Standards of Disclosure for Mineral Projects. The notice explains how regulators assess mineral resource estimates and provides guidance to assist issuers on addressing common deficiencies.
CSA reviewed the disclosure of mineral resource estimates in 86 technical reports to assess compliance with securities regulatory requirements and for conformance to the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) best practices guidelines.
The review found that, while most disclosure on mineral resource estimates was satisfactory, some mining issuers need to improve their mineral resource estimate disclosure in the following ways:
Reasonable Prospects of Eventual Economic Extraction
improving descriptions of the different technical and economic assumptions used to determine that the estimated mineralized material has the potential to be mined and processed economically;
Data Verification
Ensuring data used to support a mineral resource estimate is adequately verified and determined suitable by the qualified person;
Reporting Results, Sensitivities, Risks and Uncertainties
Enhancing disclosure about potential risks and uncertainties specific to the mining project. Many technical reports only provided boilerplate disclosure and omitting risks specific to of the mineral resource estimate could be misleading.
The notice can be accessed here.
DISCLAIMER: This post is intended to convey general information about legal issues and developments as of the date above. It does not constitute legal advice and must not be treated or relied on as such.