Natasha Singh, articling student, assisted in the preparation of this article.
On January 24, 2013, the British Columbia Securities Commission (“BCSC”) released its 2012 Mining Report (the “Report”). The Report is the first of its kind for the BCSC and serves to strengthen the BCSC’s efforts to be Canada’s leading junior mining regulator. The Report provides an overview of the common pitfalls in mining disclosure and outlines areas where market participants could improve their disclosure.
The Report identifies and discusses the following common areas of deficiencies in mining issuers’ disclosure:
1. Technical Disclosure – The common downfalls in technical disclosure are (i) the failure to file current or fully compliant reports; (ii) the failure to include the required cautionary statements for preliminary economic assessments, historical estimates and exploration targets; (iii) disclosure of mineral resources and mineral reserves that do not fully comply with NI 43-101; (iv) misleading references to mining studies; and (v) the failure to name the qualified person.
2. Company Disclosure – In general, voluntary disclosure is less likely to comply with regulations when compared to required filings. For instance, an issuer’s website, investor relations materials and corporate presentations is less likely to comply with the BCSC’s rules and regulations when compared with required filings, such as technical reports and annual information form.
3. Technical Reports – The common problems in technical reports are (i) missing or altered statements in certificate or consents of qualified persons; (ii) prohibited disclaimers or statements of reliance on other experts; and (iii) non-compliant disclosure or mineral resources and mineral reserves, historical estimates, and exploration targets.
The BCSC is hoping that the Report will help issuers address the foregoing problems and in turn, avoid costly and time-consuming mining disclosure reviews. A copy of the Report can be found here.