National Instrument 43-101 Standards of Disclosure for Mineral Projects was implemented on February 1, 2001, and amended on December 30, 2005. It is meant to be a living document that is revisited and revised from time to time to reflect changes in the industry. Since its conception, a number of issues and concerns have arisen. In response to these, in January 2009, the Canadian Securities Administrators (CSA) launched a project to revise NI 43-101.
The CSA initiated a consultation process in the spring of 2009. Approximately 150 professionals — including issuers, consultants, lawyers, analysts, self regulatory organizations and stock exchanges — participated in focus group sessions in British Columbia, Ontario and Quebec. Feedback from the participants was reasonably consistent on many issues.
At the CIM Toronto Branch luncheon last June, Craig Waldie and Jim Whyte of the Ontario Securities Commission summarized the initial results. It was noted that these are only conceptual changes at this time. The revisions to NI 43-101 are expected to be submitted for a 90-day public comment period in the summer of 2010, with a proposed effective date of summer 2011. Areas identified for potential revisions include the following:
Updated consent of QPs. Does the rule currently place too much responsibility on the Qualified Person (QP) and not enough on the issuer? Should updated QP consents be required if the existing technical report is still valid, or could this requirement be eliminated?
The rule should reflect the fact that the issuer’s management has a responsibility to determine if a technical report is still current, or if a new one is needed.
Technical report triggers. Should a production decision trigger a technical report or should there only be a requirement to disclose that the issuer went into production without a study to support the project’s economic viability?
Technical report triggers need to be reassessed to make sure they are the right ones.
Should the trigger revert back to the original wording of “any written disclosure”?
A news release containing initial disclosure of a mineral resource, reserve or preliminary assessment currently triggers a technical report.
Historical/previous estimates. Are broader and more flexible rules required for disclosing previous mineral resource and reserve estimates? How is it best to handle previous CIM-compliant estimates or an estimate that conforms to UN, Russian or Chinese systems that may not be “historical”?
Preliminary assessments. Should the rule be more flexible and allow the disclosure of a preliminary assessment on advanced stage projects?
NI 43-101 does not allow an issuer to disclose a preliminary assessment on a project after a pre-feasibility study.
Reliance on other experts. Could the QP rely on and disclaim responsibility for information by a non-QP expert if the QP explained what was done to verify the information and why the expert should be relied upon?
A clarification of the difference between “reliance” and “disclaimer” is required.
Producing issuers. Should producing issuers be allowed to file in-house technical reports when they become a reporting issuer?
If foreign issuers already trade on a designated exchange and report
mineral estimates using a CIM-style reporting standard, is this a good basis for allowing in-house reports? Also, should technical reports on producing properties be exempt from including an economic analysis section?
Technical report form. Should it be possible to incorporate more information in the technical report by referencing previous reports?
The technical report form needs to be amended for development and production properties. Should there be a separate form for technical reports on development or production properties?
Foreign associates. The list of accepted foreign professional associations and designations should be updated and a mechanism provided to allow for future revisions of the list.
Deborah McCombe, executive vice-president of Scott Wilson Roscoe Postle Associates, is a consulting geologist strongly involved in Canadian disclosure standards for the mining industry.Craig Waldie, senior geologist with the Ontario Securities Commission, is responsible for technical reviews of mining and exploration companies’ public disclosure and technical reports for compliance with NI 43-101.