CHANGES TO NATIONAL INSTRUMENT NI 43-101: STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS
| Jurisdiction | United States |
McMillan
Vancouver, BC
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Canada is the home to the majority of the world's public mining companies, and the majority of mining company financings are completed in Canada. As a result, Canada has one of the most developed regulatory systems for mining companies, and its national rule NI 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") that establishes standards for disclosure of scientific and technical information for mineral projects has become somewhat of an international standard. Investors know, like, and understand NI 43-101, and often mining companies with no connection to Canada and therefore not subject to NI 43-101 will prepare technical reports and feasibility studies in accordance with NI 43-101 standards because of its acceptance in the mining and financing industry. NI 43-101 has become an international brand name conveying quality of the scientific and technical information on mineral projects.
On June 30, 2011 amendments to NI 43-101 became effective, to produce an updated and more flexible rule ("New NI 43-101") for mining issuers. New NI 43-101 reflects issuer and regulator experience with NI 43-101, and changes in the mining industry that has occurred over the years.
New NI 43-101 allows issuers to go to market without a technical report - in most circumstances
Under New NI 43-101, the trigger to file a technical report when filing a preliminary short form prospectus ("Short Form Prospectus") has been relaxed. Prior to its effective date, an issuer had to file a technical report in connection with a Short Form Prospectus, if the Short Form Prospectus contained new material scientific or technical information not contained
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in a previously filed technical report. This trigger was easy to hit: either because an issuer clearly had new scientific or technical information; or, an issuer was unsure if the securities regulators would agree that its technical reports on SEDAR were current at the time the Short Form Prospectus was filed. The result being issuers usually had to file at least one technical report in connection with a Short Form Prospectus.
With New NI 43-101, an issuer must file a technical report with a Short Form Prospectus if the Short Form Prospectus discloses, for the first time, mineral resources, mineral reserves, or the results of a preliminary economic assessment that constitutes a material change in relation to the issuer, or a change in this information, if the change constitutes a material change in relation to the issuer. The securities regulators have said that in most cases, they think that first time disclosure of mineral resources, reserves, or the results of a preliminary economic assessment on a property material to the issuer will constitute a material change in the affairs of the issuer. Note that if disclosure of this information was made within 45 days of filing the Short Form Prospectus, and no technical report was filed in support, then a current technical report would have to be...
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