June/July 2010

Standards

WANTED: Industry comments on changes to NI 43-101

By R. Holland, C. Waldie and L. Arsenault

In April 2010, the Canadian Securities Administrators (CSA) published for comment the proposed changes to National Instrument 43-101 Standards of Disclosure for Mineral Projects, Form 43-101F1 Technical Report, and 43-101CP Companion Policy (collectively NI 43-101). The proposed changes reflect the results of our consultation with various sectors of the industry and our experience of working with NI 43-101.

Written comments from industry participants are being collected on whether they support or oppose the proposed changes, and why; and whether we should keep, modify or eliminate the technical report trigger for short form prospectuses. The comment period ends July 23, 2010.

Purpose of the proposed changes

  • In general, we believe the proposed amendments will:
  • Eliminate or reduce the scope of certain requirements while maintaining investor protection.
  • Provide more flexibility to mining issuers and Qualified Persons in certain areas.
  • Provide more flexibility to accept new foreign professional associations, professional designations and reporting codes as they arise or evolve.
  • Reflect changes that have occurred in the mining industry.
  • Clarify or correct areas where NI 43-101 is not having the intended effect.

Summary of key proposed changes

  1. We have added or amended several definitions including:
    • Adding a definition of “acceptable foreign code,” and amending the definitions of “professional association” and “Qualified Person,” to replace prescriptive lists with objective tests that will accommodate changes without formal amendment.
    • Amending the definition of “historical estimate” to permit disclosure of third-party estimates made after 2001
    • Expanding “preliminary economic assessment” to include preliminary economic analyses after the completion of a prefeasibility or feasibility study.
  2. We clarified our existing requirements applicable to all disclosure by: restricting the disclosure of economic analyses that include exploration targets and historical estimates; restricting the disclosure of gross metal or mineral value and metal or mineral equivalent grades; and requiring that disclosure of historical estimates always be accompanied by cautionary language.
  3. We amended the obligation to file a technical report by:
    • Removing the requirement to file updated certificates and consents of Qualified Persons when relying on a previously filed technical report. 
    • Expanding the technical report trigger to include any first-time written disclosure of mineral resources, mineral reserves or preliminary economic assessments.
    • Allowing a conditional six-month filing delay for a technical report supporting mineral resources, mineral reserves or a preliminary economic assessment, if these estimates are supported by a current technical report filed by another issuer.
  4. We expanded the exemption from filing an independent technical report for producing issuers, if certain conditions are met.
  5. We exempted royalty holders from the requirement to file a technical report, if certain conditions are met.
  6. We substantially amended the technical report form by:
    • Making the form less prescriptive and more adaptable for advanced-stage and producing properties.
    • Allowing the Qualified Person more discretion regarding the level of detail required under each section, based on stage of development of the property.
    • Replacing Item 25 with eight new items that reflect the major components of various economic analysis.
  7. We amended the companion policy to track the sections of NI 43-101 to which it refers, and remove or update old guidance, and add new guidance.
  8. We made a consequential amendment to the short form prospectus rules to allow firms that employ Qualified Persons to sign expert consents, rather than the Qualified Person, if certain conditions are met.

For more information about these and other proposed changes, and how to provide your written comments, see the CSA Notice and Request for Comment (April 23, 2010). Copies of this notice and the revised instrument, form and companion policy are posted on the websites of CSA members.

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Robert Holland (left), chief mining adviser with the British Columbia Securities Commission, is responsible for NI 43-101 compliance reviews of prospectus, technical reports and other regulatory filings of British Columbia-based mining companies. Craig Waldie (center), senior geologist with the Ontario Securities Commission, is responsible for NI 43-101 compliance reviews of prospectus, technical reports and other regulatory filings of Ontario-based mining companies. Luc Arsenault (right), geologist with the Autorité des marchés financier, is responsible for NI 43-101 compliance reviews of prospectus, technical reports and other regulatory filings of Quebec-based mining companies.

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