On June 27, 2013, the OSC issued Staff Notice 43-705
addressing OSC concerns with respect to disclosure in technical
Out of the 50 reports reviewed, 40% had at least one major
non-compliance concern, 40% had some concerns, and only 20% were in
compliance with the requirements of Form 43-101F1.
59% of the issuers were at the mineral resources stage. 26%
at the development or productions stage and 15% were at the
Most of the jurisdictions for the properties were in North
America, South America, Africa, Russia or China and Australia and
the principal mineral commodities were gold, copper and
iron. 54% of the reports were prepared by regional firms and
20% from global firms. Independent sole proprietor qualified
persons ("QPs") comprised 14% of the
authors of technical reports and 12% were prepared by in-house
In 58% of the cases, reports were filed pursuant to a disclosure
trigger which arose from a material change in relation of the
issuer or a change in the mineral resources in the most recently
filed report. The areas of significant deficiencies in the
technical reports included mineral resource estimates,
environmental studies, permitting and social or community impact,
capital and operating costs, economical analysis and interpretation
and conclusions. Other frequent disclosure deficiencies
included the summary, history and certificate of the QP. The
significant areas of concern included the following:
Mineral Resource Estimate. Some 25% of
the reports did not provide the required information in that the
key assumptions parameters and methods used to estimate the
resources are not provided and the requirement for "reasonable
prospects for economical extraction" were not clearly
Environmental Studies Permitting and Social or Community
Impact. These were not addressed in some 32%
of the reports and often remediation and reclamation matters were
not discussed, particularly in relation to advanced
Capital and Operating Costs. Some 26% of
the reports did not adequately disclose information on these
matters and that qualified persons are reminded to provide more
context and justification for the capital and operating cost
estimates for advanced properties.
Economic Analysis. Thirty seven percent
of the reports on advanced properties did not sufficiently disclose
the economic analysis including the impact of taxes on the projects
where an economic analysis has been carried out. It is not
acceptable to only include pre tax cash flows in economic
Interpretations and Conclusions. The
authors are reminding issuers that it is a new requirement to
disclose significant risks and uncertainties and any related
foreseeable impacts of risks and uncertainties on the project and
some 36% of the reports did not disclose specific project risks on
potential outcomes and mitigating factors.
In addition, QPs are reminded to briefly summarize the important
information and key findings about the property including its
description, ownership, data verification, site visits, resource
and reserve estimates, if applicable, mining studies, economic
analysis, if applicable, and the QPs conclusions and
In some 28% of reports, the disclosure of the historical
estimate did not state that it was not a current resource and was
not being treated as a current resource.
In some 24% of the certificates, there were errors in the QPs
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