On June 4, 2020, the Canadian Securities Administrators (CSA) released a notice that summarizes 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 Staff 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 most disclosure on mineral resource estimates was satisfactory. Some mining issuers need to improve their mineral resource estimate disclosure in the following areas:
- 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 found on the Ontario Securities Commission (OSC) website: https://www.osc.gov.on.ca/en/NewsEvents_nr_20200604_csa-reinforce-disclosure-expectations-mining-issuers-mineral-resource-estimates.htm
For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606. This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication. No part of this publication may be reproduced without the prior written permission of BAX Securities Law.