As I discussed in an earlier post, Barkerville Gold drew a lot of attention in late June when it announced an estimate of indicated resources of 10.6 million ounces of gold and “geological potential” of 65-90 million ounces of gold at the company’s Cariboo Gold Project in British Columbia. Last week, Barkerville filed the technical report in support of this disclosure. In connection with its ongoing review of Barkerville’s technical disclosure, the British Columbia Securities Commission issued a cease trade order on the basis that the technical report filed was not in the required form under NI 43-101.
As indicated in Barkerville’s July press release, the BCSC raised issues with estimates themselves, as well as the methods, parameters and assumptions that were used.
Cease trade orders relating to NI 43-101 obligations have been relatively rare in Canada. We are not aware of any having been issued by the Ontario Securities Commission. In 2012 the BCSC has issued similar orders for Avino Silver & Gold Mines Ltd., Regal Resources Inc., Goldsource Mines Inc. and International PBX Ventures Ltd. These usually follow an initial period of communication between the regulator and the issuer about an ongoing technical disclosure review.
We note that Staff included a statement within last week’s CSA Staff Notice 43-307 Preliminary Economic Assessments about material deficiencies and errors that was not limited to preliminary economic assessments. The last section of the Notice states that when Staff identify material NI 43-101 disclosure deficiencies in required documents, they will generally request that the issuer correct the deficiency by restating and re-filing the documents. Where an issuer fails to comply with the request, the issuer may be placed on the reporting issuer default lists, Staff may seek a securities commission order requiring the issuer to re-file the documents or issue a cease trade order until the issuer corrects the deficiency. The Notice reminds issuers that even if the issuer corrects the deficiency, Staff may still pursue enforcement or other regulatory action for the original breach, depending on the circumstances.