On June 30, 2011 a number of amendments to National Instrument
43-101 - Standards of disclosure for Mineral Projects were
made. One change which has generated some controversy is the
definition of "preliminary economic assessment" (formerly
"preliminary assessment"). The new definition deletes the
requirement that such a study be taken "at an early stage of
the project prior to the completion of a preliminary feasibility
study". The new definition reads:
"Preliminary economic assessment" means a study, other
than a pre-feasibility or feasibility study that includes an
economic analysis of the potential viability of mineral
Some confusion exists in the marketplace about when a PEA can be
used. For example, see the Extorre Gold Mines Limited's new release (PDF) of February 24,
2012 where Extorre was forced to withdraw a bought deal
prospectus and correct their public disclosure because of an
issue with their PEA.
At a presentation to the Mineral Exploration Roundup in
Vancouver in late January, the British Columbia Securities
Commission and the Ontario Securities Commission outlined their
views on this subject. In their view, a PEA is permitted for
advanced properties – the intention is to "allow
issuers to step backward to assess alternative development
options" and to "take a fresh look if a PFS or FS [is] no
longer current or relevant".
However, the Commissions do not believe that a PEA can
"A study done concurrently with or as part of a PFS
or FS" or
"A way to include inferred resources in a PFS or
"A way to modify a PFS or FS to include more
Issuers should be aware of the Securities Commission's
position, as using a PEA in a manner not favoured by the
Commissions can delay or disrupt financings, and give rise to
concerns in continuous disclosure reviews.
We understand that there may be work under way to clarify this
issue further by the issuance of a Staff Notice. A Staff
Notice is intended to provide guidance to issuers on how the
Commissions interpret various issues. (For example, see the CSA Staff Notice (PDF) issued October 27, 2010
with respect to disclosure of environmental issues.)
We will distribute a new bulletin if a Staff Notice is
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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