This article is an extract from GTDT Practice Guide: Mining 2021. Click here to view the full guide.
Current rules for resource disclosure in the mining industry owe their advent to the Poseidon bubble that was triggered by the discovery of a nickel deposit by exploration company Poseidon NL in Western Australia in September 1969.
At the time, Poseidon shares had been trading at A$0.80 each and peaked at A$280 each in February 1970.
As a result, the Australian government established the Rae Committee, which, in 1974, recommended changes to the regulation of stock markets that led to Australian securities legislation. Ironically, the deposit subsequently became a mine that operated for a number of years.
The Joint Ore Reserves Committee (JORC) was established in 1971 and sponsored by the Australian mining industry. JORC comprises representatives of the Mineral Council of Australia, Austral/Asia Institute of Mining and Metallurgy, Australian Institute of Geoscientists, Australian Stock Exchange, Financial Services Institute of Austral/Asia and the accounting profession. The JORC Code was imposed as a mandatory system for classification of minerals, exploration results, mineral resources and ore reserves according to the level of confidence in the geological knowledge, and technical and economical considerations for public reporting. The JORC Code was first published in 1989 and is incorporated in the listing rules of the Australian and New Zealand stock exchanges. The JORC Code was the first to set out in detail the requirements for disclosure on mining properties and was the genesis for a number of codes that have adopted its concepts in countries around the world.
Scandals in the mining industry are not limited to the Poseidon bubble. Another significant scandal is Bre-X Minerals Ltd, a Canadian company that allegedly discovered the Busang gold deposit.
Bre-X started out on the Alberta Stock Exchange and was listed in 1989 at C$0.30 a share. In October 1995, Bre-X announced it had discovered a deposit with approximately 2.7 million ounces of gold. Analysts believed the find might have 30 million ounces and John Felderhof, a company geologist, stated it could be 45 million ounces with ‘the potential of becoming one of the world’s great ore bodies’. Michael De Guzman, a Philippine geologist, hinted at 100 million ounces and in March 1996, the shares were listed on the Toronto Stock Exchange (TSX). There were numerous interference activities by the Indonesian government, when the alleged magnitude and importance of the ‘deposit’ became known and members of the family of a senior official in the government wanted to obtain ownership interests in the property. In March 1997, De Guzman disappeared after falling from a helicopter. In February 1997, Freeport McMoran Copper and Gold Inc, a US company, negotiated an agreement respecting the property and announced in late 1997 that there were ‘insignificant amounts of gold’ at the Busang deposit. Three billion dollars in market capitalisation of Bre-X had already collapsed.
As a result of the Bre-X debacle, a Mining Standards Task Force was established by the TSX and the Ontario Securities Commission, which recommended sweeping changes to disclosures for mining companies listed on exchanges in Canada. Unlike Poseidon, which had nickel, Bre-X had no gold other than the nearby placer gold that was used to salt the drill core samples.
The Canadian Securities Administrators established National Instrument 43-101: Standards of Disclosure for Mineral Projects (NI 43-101), a Companion Policy and F1 Form (Form 43-101F1), which meant that all reporting mining companies in Canada would be subject to the provisions of NI 43-101 in addition to any disclosure requirements imposed by the relevant exchange. (See also the separate section on NI 43-101.)
Notice was given on 3 July 1998 and NI 43-101 came into effect on 14 November 2000. NI 43-101, incorporated, as part of the law, the Canadian Institute of Mining and Metallurgy (CIM) definition standards for mineral resources and mineral reserves. Since 2000, a number of changes have been made to NI 43-101 and various notices relating to disclosure under NI 43-101. In addition, the CIM published guidelines for diamond exploration and lithium brines. Prior to NI 43-101, the Geological Survey of Canada published Paper 88-21, which deals with the disclosure for coal properties, that included a category for ‘speculative’ resources; however, that category is not acceptable to the regulators.
Partly as a result of the implementation of the JORC Code and NI 43-101, various exchanges, including the TSX, Toronto Stock Exchange Venture, Hong Kong Stock Exchange and Australian Stock Exchange also implemented their own disclosure rules. The pathway to today’s disclosure is beginning to converge, perhaps as a result of the establishment of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO). CRIRSCO is comprised of organisations around the world with mining as their focus and much of the current disclosure in the industry is presently derived from CRIRSCO standard definitions.
The JORC Code introduced the concept of a ‘competent person’ and NI 43-101 adopted a similar definition in ‘qualified person’.
CRIRSCO has a number of defined terms, including ‘inferred resource’, ‘indicated resource’, ‘measured resource’, ‘probable reserve’ and ‘proved reserve’, which closely correspond to the CIM definitions, although there are some differences in the definition of ‘inferred resource’. In addition, CRIRSCO defines a ‘scoping study’, a ‘pre-feasibility study’ and a ‘feasibility study’. A scoping study is similar to a ‘preliminary economic assessment’ as set out NI 43-101. (Note that preliminary economic assessment is not a defined term under the CIM definitions and is a creation of NI 43-101 itself.)
In the United States, the Securities and Exchange Commission (SEC) previously had Industry Guide 7 in respect of disclosure for mining companies until 1 January 2021 when Regulation S-K (subpart 1300) became effective.
In June 2016, the SEC announced proposed rules to modernise the disclosure requirements for mining companies to align them with industry and global regulatory practices and standards.
Issuers in Canada listed on United States markets that are subject to the Multi-Jurisdictional Disclosure System, which references mining companies having a public float in the market capitalisation of at least US$75 million, will continue to have the right to file reports under NI 43-101 after 31 December 2020.
The provisions of Regulation S-K (subpart 1300) include the following:
- Introduced a definition of Qualified Person (QP), who must meet requirements regarding academic qualifications and experience; however, independence is not required. Note that unless the QP is a member of an organization that has the power to discipline its members, the QP would not be a QP for NI 43 101.
- Requirements for a technical report summary include:
- a price for each commodity on a reasonable basis for establishing the prospects of economic extraction when assessing mineral resources;
- a reasonable basis for establishing that the project is economically viable when determining mineral reserves, which may be a historical or forward-looking price, as long as the QP discloses the basis; and
- an explanation, with specific details, of the reasons for using the selected price, including the material assumptions underlying the selection.
- Permits, but does not require, a registrant to file a technical report summary to support its disclosure of exploration results.
- Permits a QP to include inferred resources in an economic analysis that is not a pre-feasibility study or a feasibility study that the QP opts to include in an initial assessment, as long as certain conditions are met.
- The definition of a mineral reserve must allow for dilution and allowances for losses that may occur when the material is mined or extracted.
- Permits the use of historical estimates of mineral resources or reserves in SEC filings pertaining to mergers, acquisitions or business combinations if the registrant is unable to update the estimate prior to completion of the relevant transaction, provided that the registrant discloses the source and date of the estimate and does not treat the estimate as a current estimate (similar to the cautionary language in NI 43-101).
- Multiple QPs may prepare a technical report summary if certain conditions are met.
- If a QP is employed by a third-party firm, that firm may sign the technical report summary and provide the written consent required for an expert under the Securities Act (unlike NI 43-101, which requires the individual QP’s consent, notwithstanding that the QP may be employed by a consulting firm). In such instance the liability would be that of the firm.
- A registrant’s disclosure of information regarding its exploration activity and exploration results is voluntary until the information becomes material to investors.
- A registrant and its QP may disclose exploration targets, similar to ‘ranges’ in NI 43-101, in SEC filings if accompanied by certain specified cautionary and explanatory statements.
- In the report form, a feasibility study must include all the information contained in paragraphs 1 to 25. Initial assessments must contain all the information in paragraphs 11 to 25 and a technical report summary supporting exploration results must provide the information in paragraphs 1 to 9 and 20 to 25, the format of which closely mirrors the 43-101F1 Form.
- In addition, definitions are set out for the following: cut off grade, development stage issuer, development stage property, exploration results, exploration stage issuer, exploration stage property, exploration target, feasibility study, final market study, indicated mineral resource, inferred mineral resource, initial assessment (preliminary economic study), measured mineral resource, mineral reserve, mineral resource, modifying factors (which include but are not restricted to mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental compliance, plans, negotiations or agreements with local individuals or groups and government factors), preliminary feasibility study, preliminary market study, probable mineral reserve, production stage issuer, production stage property, proven mineral reserve and QP.
- The registrant must file a written consent of each QP who prepared a particular section of the technical report summary and state whether the QP is an employee of the registrant. The consent must be attached as an exhibit.
- In a feasibility study, the operating and capital cost estimates must have accuracy level of ±15 per cent and a contingency not to exceed 10 per cent. In a pre-feasibility study, the accuracy level is ±25 per cent and a contingency not to exceed 15 per cent which information must be disclosed in the report. Note that inferred resources cannot be converted into reserves. A pre-feasibility study must identify uncertainties that require further refinement in a feasibility study.
- In addition, the provisions for summary disclosure tables include: Table 2A, a summary of mineral resources at the end of fiscal year based on price, and Table 2, a summary of the mineral reserves at the end of the fiscal year based on price.
Other organisations have created reporting committees, such as the Pan-European Reserves and Resources Reporting Committee (PERC).
Reporting committees in several countries have published a ‘Code for the public reporting of exploration results, mineral resources and mineral reserves’, including Brazil (latest version, 2016), Chile (2015), Kazakhstan (June 2016), Mongolia (2014) and South Africa (latest version, 2016). There is more than one Russian code, but the only one accepted by CRIRSCO is that known as the NAEN Code (October 2011).
Many of these codes have adopted the CRIRSCO definitions (discussed further below), with some changes to accommodate local activities and mining operations.
There are other regulatory schemes that affect the industry, including:
- the rules of the Hong Kong Stock Exchange under Chapter 18, which adopted the CIMVAL Standards and Guidelines for the Valuation of Mineral Properties endorsed by the CIM in February 2003;
- the Singapore Exchange in Practice Note 6.3 has disclosure requirements for mineral, oil and gas companies;
- the Johannesburg Stock Exchange sets out disclosure requirements for mineral companies in section 12 of its rules;
- the Australian Securities Exchange sets out requirements in its listing rules, under Chapter 5, for additional reporting in mining, oil and gas production and exploration activities;
- the Australian Securities and Investments Commission provides a ‘Perspective on Resources and Reserves Reporting’, last revised in April 2013; and
- the London Stock Exchange has a note regarding mining and oil and gas companies dated June 2009 under the listing requirements of AIM (a sub-market of the London Stock Exchange). The London Stock Exchange has adopted the AIM Guidance.
- The TSX has ‘Disclosure Standards for Companies Engaged in Mineral Exploration, Development and Production’. The stock exchange company manual for the TSX includes Appendix B, which also sets out ‘Disclosure Standards for Companies Engaged in Mineral Exploration, Development and Production’. The TSX and the Toronto Stock Exchange Venture have separate listing requirements for exploration and mining companies.
- The Financial Conduct Authority of the United Kingdom published listing rules regarding mining companies in January 2018.
- The European Securities and Markets Authority issued Regulation No. 809/2004 regarding prospectus directives and recommendations. A consultation paper was published in September 2012.
CRIRSCO was formed in 1994 under the auspices of the Council of Mining and Metallurgical Institutes (CMMI), a grouping of representatives of organisations that are responsible for contributing and developing mineral reporting codes and guidelines in Australasia (JORC), Brazil (CBRR), Canada (CIM), Chile (National Committee), Colombia (CCRR), Europe (PERC), Indonesia (KOMBERS_KCMI), Kazakhstan (KAZRC), Mongolia (MPIGM), Russia (NAEN), South Africa (SAMREC), Turkey (UMREK) and the United States (SME). The combined value of mining companies listed on the stock exchanges of these countries accounts for more than 80 per cent of the listed capital of the mining industry.
The international initiative to standardise market-related reporting definitions for mineral resources and mineral reserves started at the 15th CMMI Congress at Sun City, South Africa, in 1994. The mineral definitions working group (later called CRIRSCO) was formed after a meeting at that Congress, and was made up of representatives from most of the countries listed above, with the primary objective of developing a set of international standard definitions for the reporting of mineral resources and mineral reserves.
In 1997, the original five participants reached agreement (the Denver Accord) for the definitions of the two major categories, Mineral Resources and Mineral Reserves, and their respective sub-categories: Measured, Indicated and Inferred Mineral Resources, and Proved and Probable Mineral Reserves.
In 1999, agreement was reached with the United Nations Economic Commission for Europe, which had, since 1992, been developing an International Framework Classification for Mineral Reserves and Resources (UNFC), to incorporate into the UNFC the CMMI-CRIRSCO resource and reserve definitions for those categories that were common to both systems. This agreement gave true international status to the CMMI-CRIRSCO definitions.
Following these agreements, an updated version of the JORC Code was released in Australia in 1999 (and more recently, in 2012), followed by similar codes and guidelines in South Africa, the United States, Canada, the United Kingdom, Ireland and west Europe, Chile and Peru. The JORC Code has played an important part in the development of standard definitions for the codes and guidelines.
The similarity of the various national reporting codes and guidelines has enabled CRIRSCO to develop an International Minerals Reporting Code Template of ‘core code and guidelines’ for jurisdictions wishing to adopt their own CRIRSCO-style reporting standard, recognising country-specific requirements such as legal and investment regulations.
The following are the standard CRIRSCO definitions for inclusion in reporting standards of all CRIRSCO members subject to the agreement of the respective national reporting organisations.
The following were proposed as defined terms as of October 2012:
- Public Reports;
- Measured Resource;
- Competent Person;
- Mineral Reserve;
- Modifying Factors;
- Probable Reserve;
- Exploration Target;
- Proved Reserve;
- Exploration Results;
- Scoping Study;
- Mineral Resource;
- Pre-Feasibility Study;
- Inferred Resource;
- Feasibility Study; and
- Indicated Resource
These definitions have been incorporated in the International Reporting Template of CRIRSCO dated November 2013 and the Codes and Standards of most CRIRSCO members, and should be considered in conjunction with the CRIRSCO Template.2
General relationship between exploration results, mineral resources and mineral reserves
The following information is drawn primarily from the CRIRSCO website (Standard Definitions as revised in October 2012).3
- Public Reports are prepared for the purpose of informing potential investors and their advisers on exploration results, mineral resources or mineral reserves for disclosure, such as annual and quarterly company reports, press releases, information memoranda, technical papers, website posts and public presentations.
- A Competent Person is a minerals industry professional with enforceable disciplinary processes, including the powers to suspend or expel a member. Alternative terms in Canada (Qualified Person) and Chile (Qualified Competent Person) are considered equivalent to Competent Person. A Competent Person must have a minimum of five years’ relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking.
- Modifying Factors are considerations used to convert mineral resources to mineral reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors.
- An Exploration Target is a statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade or quality, relates to mineralisation for which there has been insufficient exploration to estimate mineral resources. This is akin to disclosure on ranges as set out in section 2.3(2) of NI 43-101.
- Exploration Results include data and information generated by mineral exploration programmes that might be of use to investors but do not form part of a declaration of Mineral Resources or Mineral Reserves.
- A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade or quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade or quality, continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.
- An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply, but not verify, geological and grade or quality continuity. An Inferred Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
- An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.
- A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling and testing and is sufficient to confirm geological and grade or quality continuity between points of observation.
- A Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be converted to a Proved Mineral Reserve or to a Probable Mineral Reserve.
- A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at pre-feasibility or feasibility level as appropriate that include application of Modifying Factors. These studies demonstrate that, at the time of reporting, extraction could reasonably be justified.
- The reference point at which Reserves are defined, usually the point when the ore is delivered to the processing plant, must be stated. It is important that, whenever the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported. This is particularly important for such elements as lithium, which may require significant processing after being mined.
- A Probable Mineral Reserve is the economically mineable part of an Indicated Mineral Resource and, in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to a Probable Mineral Reserve is lower than that applying to a Proved Mineral Reserve. A Proved Mineral Reserve is the economically mineable part of a Measured Mineral Resource.
- A Proved Mineral Reserve implies a high degree of confidence in the Modifying Factors.
- A Scoping Study is an order of magnitude technical and economic study of the potential viability of Mineral Resources that includes appropriate assessments of realistically assumed Modifying Factors and any other relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a Pre‐Feasibility Study can be reasonably justified. Note that this definition is not coincident with a preliminary economic assessment under NI 43-101.
- A Pre-Feasibility Study is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors that are sufficient for a Competent Person, acting reasonably, to determine whether all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. A Pre-Feasibility Study is at a lower confidence level than a Feasibility Study.
- A Feasibility Study is a comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable Modifying Factors and any other relevant operational factors and detailed financial analysis that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable). The results of the study may reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or finance, the development of the project. The confidence level of the study will be higher than that of a Pre-Feasibility Study. Note that Industry Guide 7 includes a provision that a Reserve must be permitted, unlike some jurisdictions.
The Canadian Securities Administrators has Standards of Disclosure for Mineral Projects (referred to as NI 43-101), a Companion Policy and Form 43-101F1, which must be followed when reporting results.
There are instructions on Form 43-101F1 that, with the Companion Policy, provide guidance on technical disclosure.
A Technical Report should include a title page, a date and signature page, and a table of contents, including figures and illustrations, such as maps, plans and sections.
The following elements are required in all technical reports (note, however, that this is an edited description and is provided as an example only of what mining disclosure may ultimately resemble. It should not be relied on for preparing a report).
- Summary – briefly summarise important information, including property description and ownership, geology and mineralisation, status of exploration, development and operations, mineral resource and mineral reserve estimates, and the QP’s conclusions and recommendations.
- Introduction – include a description of the issuer for whom the technical report is prepared; terms of reference and purpose; sources of information and data; and details of the inspection carried out by a QP.
- Reliance on other experts – the QP who prepares or supervises preparation of all or part of the technical report may include a limited disclaimer of responsibility for matters concerning legal, political, environmental or tax matters relevant to the technical report.
- Property description and location:
- area of property;
- type of mineral tenure and its identifying name or number;
- nature and extent of the issuer’s title to, or interest in, property rights, access, obligations that must be met to retain the property, expiry date of claims, licences or other property tenure rights;
- to the extent known, the terms of any royalties, back-in rights, payments, or other agreements and encumbrances to which the property is subject;
- to the extent known, all environmental liabilities affecting the property;
- to extent the known, permits; and
- any other significant factors and risks that may affect access, title or right, or the ability to perform work on the property.
- Accessibility, climate, local resources, infrastructure and physiography:
- topography, elevation and vegetation;
- proximity to a population centre, and to transport;
- climate and length of operating season; and
- sufficiency of surface rights for mining operations, availability and sources of power, water, mining personnel, potential tailings storage areas, potential waste disposal areas, heap leach pad areas, and potential processing plant sites.
- prior ownership of the property and changes in ownership changes;
- the type, amount, quantity and general results of the exploration and development work undertaken by previous owners or operators;
- any significant historical mineral resource and mineral reserve estimates; and
- any production from the property.
- Geological setting and mineralisation – the regional, local and property geology, and significant mineralised zones.
- Deposit types – the mineral deposits being investigated or sought, and the geological model or concepts on the basis of which an exploration programme is planned.
- Exploration – the nature and extent of all relevant exploration work other than drilling, conducted by or on behalf of, the issuer, including:
- procedures and parameters relating to surveys and investigations;
- sampling methods and sample quality, whether samples are representative, and any sample bias factors;
- information about the location, number, type, nature, and spacing or density of samples collected, and the size of the area covered; and
- significant results and interpretation of exploration information.
- Drilling – the type and extent of drilling, a summary and interpretation of all relevant results; any drilling, sampling or recovery factors that could materially affect the accuracy and reliability of results; and for a property other than an advanced property:
- the location, azimuth and dip of any drill hole, and the depth of the relevant sample intervals;
- the relationship between the sample length and the true thickness of mineralisation;
- the orientation of mineralisation; and
- the results of any significantly higher grade intervals within a lower grade intersection.
- Sample preparation, analyses and security:
- sample preparation methods and quality control measures;
- relevant information regarding sample preparation, assaying and analytical procedures used, and the name and location of analytical or testing laboratories;
- a summary of the nature, extent and results of the quality control procedures employed and of quality assurance actions; and
- an opinion of the adequacy of the sample preparation, security and analytical procedures.
- Data verification:
- the steps taken by the QP to verify the data in the technical report, including procedures;
- limitations in, or failure to conduct, such verification; and
- the QP’s opinion on the adequacy of the data.
- Mineral processing and metallurgical testing – if mineral processing or metallurgical testing analyses have been carried out, discuss:
- the nature and extent of the testing and analytical procedures and summary;
- the basis for any assumptions or predictions;
- the degree to which test samples are representative of the various types and styles of mineralisation and mineral deposit; and
- any processing factors or deleterious elements that could have a significant effect on potential economic extraction.
- Mineral resource estimates – Disclosure of mineral resources must provide sufficient discussion of key assumptions, parameters and methods used to estimate mineral resources; comply with all disclosure requirements for mineral resources; when grade for a multiple commodity mineral resource is reported equivalencies, report individual grade of each metal or mineral and metal prices, recoveries, and other relevant conversion factors used to estimate metal or mineral equivalent grade; and include general discussion on extent to which mineral resource estimates could be materially affected by any known environmental, permitting, legal, title, taxation, socio-economic, marketing, political or other relevant factors.
Additional requirements for advanced property technical reports (referencing economic analysis)
- Mineral reserve estimates:
- disclosure of mineral reserves must provide sufficient discussion and detail of the key assumptions, parameters and methods used when mineral resources are converted to mineral reserves;
- for equivalencies, the individual grade of each metal or mineral and metal prices, recoveries, and any other relevant conversion factors used; and
- the extent to which reserve estimates could be materially affected by mining, metallurgical, infrastructure, permitting and other relevant factors.
- Mining methods – the current or proposed mining methods and a summary of the relevant information used to establish the amenability or potential amenability of mineral resources or mineral reserves to proposed mining methods, including:
- the geotechnical, hydrological and other parameters relevant to mine or pit designs and plans;
- the production rates, expected mine life, mining unit dimensions and dilution factors used;
- the requirements for stripping, underground development and backfilling; and
- the required mining fleet and machinery.
- Recovery methods:
- available information on test or operating results relating to the recoverability of a valuable component or commodity and the amenability of mineralisation to proposed processing methods, where relevant, including a description or flow sheet of the current or proposed process plant;
- plant design, equipment characteristics and specifications, as applicable; and
- the current or projected requirements for energy, water and process materials.
- Project infrastructure – a summary of the infrastructure and logistical requirements for the project, which could include roads, rail, port facilities, dams, dumps, stockpiles, leach pads, tailings disposal, power and pipelines, as applicable.
- Market studies and contracts:
- a summary of reasonably available information concerning the markets for the issuer’s product, including the nature and material terms of any agency relationships, commodity price projections, product valuations, market entry strategies, or product specification requirements; and
- identification of any contracts material to the issuer that are required for property development, including mining, concentrating, smelting, refining, transport, handling, sales and hedging, and forward sales contracts or arrangements in place, under negotiations and terms and industry norms.
- Environmental studies, permitting and social or community impact – reasonably available information relating to the project. Consider and, where relevant, include:
- a summary of the results of any environmental studies and environmental issues that could materially affect the issuer’s ability to extract resources or reserves;
- the requirements and plans for waste and tailings disposal, site monitoring and water management both during operations and after closure of the mine;
- the project permitting requirements, the status of any permit applications and post-performance or reclamation bonds;
- a discussion of any potential social or community-related requirements and plans; and
- a discussion of mine closure (remediation and reclamation) requirements and costs.
- Capital and operating costs – a summary of the estimates of these costs, with major components set out in tabular form.
- Economic analysis of the project, including:
- a clear statement of principal assumptions;
- annual cashflow forecasts using reserves or resources and an annual production schedule for the life of project;
- a discussion of net present value, including the impact of taxes, internal rate of return, and payback period of capital with imputed or actual interest;
- a summary of taxes, royalties and other government levies or interests applicable to the mineral project or production, and to revenue or income from the mineral project; and
- sensitivity or other form of analysis using variants in commodity price, grade, capital and operating costs, or other significant parameters and impact of results.
Additional requirements for all technical reports
- Adjacent properties – a report may include relevant information concerning an adjacent property, provided:
- the information has been publicly disclosed;
- the source is identified;
- the technical report states that its QP has been unable to verify information and that information is not necessarily indicative of mineralisation on the property that is the subject of report;
- the report clearly distinguishes between information about an adjacent property and information about the property that is the subject of the report; and
- any historical estimates of mineral resources or mineral reserves are disclosed in accordance with paragraph 2.4(a) of NI 43-101.
- Other relevant data and information – any additional information or explanations necessary to make the technical report understandable and not misleading.
- Interpretation and conclusions:
- summary of relevant results and interpretations of the information and analysis being reported on;
- any significant risks and uncertainties that could reasonably be expected to affect reliability or confidence in exploration information, resource or reserve estimates, or projected economic outcomes;
- any reasonably foreseeable effects of the risks and uncertainties relating to a project’s potential economic viability or continued viability; and
- a report concerning exploration information must include the conclusions reached by the QP.
- Recommendations – provide particulars of recommended work programmes and a breakdown of the costs for each phase. If successive phases of work are recommended, each phase must culminate in a decision point, and must not apply to more than two phases of work, and whether advancing to a subsequent phase is contingent on positive results in a previous phase.
- References – include a detailed list of all references cited in the technical report.
The world of mining disclosure is gradually converging because of the efforts of organisations such as CRIRSCO, JORC, SAMREC, CIM and the application of regulators such as the Canadian Securities Administrators and stock and securities exchanges such as AIM, Toronto, Hong Kong, Australia and emerging exchanges in South America and Asia.
In time, one expects that disclosure will be common and yet still allow for local rules and regulations unique to each jurisdiction.