New Securities Regulations

Here Come De Instrument

If your mining or exploration company’s shares trade on a Canadian exchange, then you should be aware that there are new rules to follow as of Feb. 1, 2001. They are encompassed in National Instrument 43-101: Standards of Disclosure for Mineral Projects, which essentially replaces National Policy 2A.

The intention is “to enhance the accuracy and integrity of disclosure in the mining sector”, and the subtext is to undo the damage inflicted by the Bre-X fraud four years ago.

A key item is that all scientific and technical disclosures must now be based on information prepared by a Qualified Person, who must in some circumstances be independent of the company. A “QP” is a registered engineer or geoscientist with experience relevant to the mineral project.

The instrument incorporates new standard definitions for resources and reserves, which must be used for Canadian properties. It uses the definitions adopted in August 2000 by the CIM council. Hence, there are now only five categories for mineral inventories–inferred, indicated and measured resources, as well as probable and proven reserves–and each must be reported separately.

For more information about NI 43-101, contact Debbie McCombe, Chief Mining Consultant to the Ontario Securities Commission, at tel. 416-593-8151 or dmccombe@osc.gov.on.ca