Canada: Ontario Securities Commission Staff Releases Report On Mining Technical Reports

On June 27, 2013, Staff of the Ontario Securities Commission released a report summarizing the results of its review of a sampling of 50 Technical Reports filed between June 30, 2011, and June 29, 2012, by Ontario mining issuers of varying sizes and stages of development, representing approximately 10% of the Technical Reports filed on SEDAR by Ontario mining issuers over that period. Of the 50 Technical Reports that were reviewed, 19 related to advanced properties (i.e., properties that either have a mineral reserve or mineral resources the potential economic viability of which is supported by a preliminary economic assessment, pre-feasibility study or feasibility study).

The Staff report, published as OSC Staff Notice 43-705 (the "Staff Report"), found that 80% of the Technical Reports reviewed were not in compliance with the requirements of National Instrument 43-101 and that 40% of the Technical Reports in the sample had at least one major non-compliance concern. The Staff Report has been issued to assist mining issuers and qualified persons in complying with the disclosure requirements in Form 43-101F1 and NI 43-101 and to alert mining issuers to anticipate staff requests for refilings, additional disclosure or other staff action if deficient Technical Reports are discovered. The Staff Report also cautions issuers that unresolved deficiencies may delay the issuance of a prospectus receipt, particularly for short form prospectus filings.

Among the more common deficiencies identified in the Staff Report were the following:

  • Mineral Resource Estimates: Staff found that 25% of the Technical Reports failed to adequately disclose the key assumptions, parameters and methods used to estimate the mineral resource. Notably, some Technical Reports failed to properly disclose (i) how reasonable prospects for economic extraction were established, (ii) the cut-off grade used to estimate the resource estimate or (iii) other key assumptions underlying the estimate, such as assumed metal prices or recovery rates.
  • Environmental Studies, Permitting and Community Impact: Approximately one-third of the Technical Reports relating to advanced properties failed to adequately disclose information related to environmental permits or the social or community impact of developing the mineral project covered by the Technical Report. Staff noted that where material contracts are entered into with First Nation communities, consideration should also be given as to whether the agreement constitutes a material contract that would trigger other filing requirements for the issuer. Staff also noted that when negotiating these contracts and agreements, issuers should be mindful of their filing requirements, including with respect to any confidentiality obligations in such contracts.
  • Economic Analysis: Staff found that 40% of the Technical Reports at the preliminary economic assessment stage failed to properly address the impact of taxation in the economic analysis of the mineral project and that 37% of the Technical Reports on advanced properties failed to adequately disclose the economic analysis required by NI 43-101. Notably, some Technical Reports did not provide cash flow forecasts on an annual basis or included sensitivity analyses which were either too limited in scope or only provided up-side scenarios. The Staff Report cautions that "it is potentially misleading for a Technical Report on an advanced property to disclose only pre-tax cash flows and economic outcomes or to disclose only positive metal price changes or only up-side sensitivity analyses".
  • Capital and Operating Costs: The Staff Report noted that 26% of the Technical Reports that related to an advanced property failed to provide the required summary of capital and operating cost estimates, with the major components set out in tabular form, as required by NI 43-101. In some cases, the main components of the capital cost estimate were not provided and in others the Technical Report failed to disclose the underlying basis upon which the cost estimates were established.
  • Interpretation and Conclusion: NI 43-101 requires that a Technical Report contain a section that summarizes the results and interpretations of the information and analysis being reported on. This section must also include discussion of any significant risks and uncertainties that could reasonably be expected to affect the reliability or confidence in the exploration information, mineral resource or mineral reserve estimates, or projected economic outcomes. The Staff Report identified 36% of the Technical Reports as not properly identifying project-specific risks and uncertainties.
  • Inadequate Disclaimer of Historical Information: Where a historical estimate is included in a Technical Report, NI 43-101 requires that the Technical Report include a statement that a qualified person has not done sufficient work to classify the historical estimate as a current resource estimate and that the issuer is not treating the historical estimate as a current resource estimate. The Staff Report states that 28% of the Technical Reports sampled failed to include the required cautionary language. The mere inclusion of a statement that a historical estimate is not compliant with NI 43-101 does not satisfy the regulatory requirements.
  • Other Observations: The Staff Report also identifies the failure of 24% of Technical Reports to include a proper summary section and notes that 24% of qualified person certificates that were reviewed were found to be deficient.

This Staff Report builds upon the review that was undertaken by the B.C. Securities Commission in its 2012 Mining Report and underscores the importance of mining issuers to the Canadian capital markets. Given the significance of this sector and the degree of non-compliance identified by Staff, we expect increased regulatory scrutiny of Technical Reports filed in the future by Canadian reporting issuers. A failure to properly comply with NI 43-101 could result in Staff requests for refilings or, in severe circumstances, regulatory enforcement action. As noted above, Staff also warns that deficient technical disclosure can delay the issuance of prospectus receipts.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions