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Canadian securities regulators reinforce disclosure expectations for mining issuers’ mineral resource estimates

  • Securities - CSA Image

Jun 04, 2020

On June 4, 2020, the Canadian Securities Administrators (CSA) published a notice that summarizes the results of a review on the mineral resource estimates disclosed in mining issuers’ technical reports. The notice explains how regulators assess mineral resource estimates and provides guidance to assist issuers on addressing common deficiencies.

Disclosure of a mineral resource estimate is an influential factor in the value that investors put on a mining issuer’s securities. The estimate is the foundation for studies that govern the design and economic feasibility of a mining project.

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 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.

Despite some deficiencies, many technical reports provided detailed and useful information on geological constraints applied to the estimate, and on statistical treatment of the data.

Review the press release and Staff Notice on the CSA's website.

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