This is the third instalment in our periodic series on
National Instrument 43 101.
How Historical Estimates Can Be Disclosed
NI 43 101 restricts the use of estimates that do not use the
applicable NI 43 101 categories and that do not otherwise meet the
requirements of the instrument. However, many properties
exist, or are acquired, with reports that predate NI 43 101 or that
were prepared under another set of estimation criteria.
Certain of these historical estimates are permissible provided that
the issuer discloses the estimates in accordance with NI 43
101' s requirements for historical estimates.
The misuse of historical estimates appears to be one of the key
areas where issuers run into trouble with the regulators.
Recent actions by regulators include placing issuers on the default
issuer list. The acquisition of a new property will often
bring with it data regarding the potential mineral resource on that
property. Whether to provide justification for the purchase
of the property, or as a result of a conclusion that the
information is material and must be disclosed, an issuer will make
the non NI 43 101 resource estimate public.
The type of historical estimate that is permitted is an estimate
of the quantity, grade or metal or mineral content of a deposit
that an issuer has not verified as a current mineral resource or
mineral reserve, and which was prepared before the
issuer acquired, or entered into an agreement to acquire, an
interest in the property that contains the deposit.
Historical estimates are not previous estimates by a current
property holder or new estimates using historical data.
An issuer may disclose an historical estimate, using the
original terminology, if the disclosure includes:
source and date of the historical estimate, including any
existing technical report,
relevance and reliability of the estimate,
key assumptions, parameters, and methods used to prepare the
whether the estimate uses categories other than NI 43 101
categories and, if so, an explanation of the differences,
more recent estimates or data available to the issuer,
work needed to upgrade or verify the estimate as current,
a statement with equal prominence that: "
a qualified person has not done sufficient work to classify the
historical estimate as current mineral resources or mineral
reserves and the issuer is not treating the historical estimate as
current mineral resources or mineral reserves."
Simply stating that the historical estimate is not compliant
with NI 43 101 is not sufficient. Issuers must remember that
the required disclosure must be included every time a historical
estimate is included.
Other Tips for Using Historical Estimates
Furthermore, an issuer will be considered to be treating the
historical estimate as a current estimate if it:
incorporates the historical estimate into a disclosed economic
evaluation or uses it for a production decision, or
states that it will be adding to the historic estimate as this
would imply that it is a current estimate.
These actions could trigger a technical report
requirement. In no situation should a historic estimate be
added to a current mineral reserve or resource estimate.
The public release of historical numbers is not itself
prohibited (if it was prepared prior to acquisition). While
the requirements of the instrument may make the disclosure longer
and require some additional work, complying with the requirements
for making public disclosure of historical estimates should not
pose marketing issues and does not require the issuer to produce
any independent information or rely on any new consultant.
Compliance is simply a matter of recognizing that an historical
estimate is being disclosed and complying with the requirements
above. Of note, and possibly the more important reason to comply,
if an issuer treats the historical estimates as historical and
complies with NI 43 101, no technical report will be triggered.
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.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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