Canada: CSA Provides Guidance On Investor Presentations And Website Disclosure For Mining Issuers

Last Updated: April 14 2015
Article by Ryan Hornby, Zachary Masoud and Steven Molnar

Most Read Contributor in Canada, September 2018

While investor presentations and other forms of investor relations materials provided on company websites are an effective tool for communication, mining issuers should remain alert that such materials are captured by the definition of "written disclosure" and the associated disclosure rules in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). A review of such investor presentations and other website disclosure was the subject of the recent Canadian Securities Administrators ("CSA") Staff Notice 43-309 – Review of Website Investor Presentations by Mining Issuers (the "Staff Notice") issued on April 9, 2015.

Overall, the CSA found that there is substantial room for improvement for mining issuers to comply with disclosure requirements. Of the 130 investor presentations reviewed, only 18% were found to be substantially compliant with NI 43-101, while 57% had issues of minor non-compliance and 25% suffered from major non-compliance concerns. The CSA sent letters to 49 mining issuers requiring them to take remedial action, including providing undertakings regarding future compliance, issuing a corrective news release and, in the most severe cases, filing or refiling a technical report.

Key Findings

The Staff Notice highlights the need for mining issuers to improve their disclosure in order to effectively comply with the requirements of NI 43-101. The most significant areas of non-compliance identified by the CSA review include:

  • Naming the qualified person ("QP"): Of the 130 investor presentations reviewed, only 54 provided the QP's name and relationship to the issuer. The Staff Notice states that the foundation of NI 43-101 is that scientific and technical information must be prepared or approved by a QP and that compliant disclosure must state the name of the QP and their relationship to the issuer. The CSA noted that overall compliance was significantly higher among presentations that were reviewed by a QP.
  • Preliminary economic assessments ("PEA"): The Staff Notice advises issuers to ensure that disclosure of the results of a PEA provides appropriate cautionary statements for the public to understand the limitations of the results of the PEA and to highlight the viability of mineral reserves vis-à-vis mineral resources.
  • Inclusion or exclusion of mineral reserves in mineral resources: The Staff Notice states that when reporting both mineral resources and mineral reserves, a clear statement as to whether the mineral resources include or exclude mineral reserves is required.
  • Exploration targets: The Staff Notice states that both the potential quantity and grade of an exploration target must be expressed as ranges. In addition, accompanying statements outlining the target limitations must be provided.
  • Historical estimates: The Staff Notice states that disclosure of historical estimates must include reference to the source, date, reliability and key assumptions of such estimates, and must be accompanied by the required cautionary statements.
  • Overly promotional terms and potentially misleading information: The Staff Notice cautions against the use of statements that are overly promotional or misleading, which could potentially result in a misrepresentation under securities legislation. Terms such as "world class", "spectacular and exceptional results", "production ready", "ore" in relation to mineral resources, and "management estimates" are specifically identified as examples of statements that could be misleading, particularly when used by exploration stage or mineral resource stage issuers.

Other notable areas mentioned for additional improvement include: (i) reporting only pre-tax financial results or providing no information about the applicable tax rate in PEAs or other economic reports; (ii) a lack of disclosure regarding assumed metal prices used for determining mineral resource estimates; and (iii) disclosure of drilling results that failed to include information on the true width of mineralized zones or failed to provide results of significantly higher grade intervals enclosed in a lower grade intersection, which were cited by the CSA as being particularly important for early stage projects.

The Staff Notice also reminds issuers that first time written disclosure of mineral resources, mineral reserves or the results of a PEA (or a change to any of these that constitutes a material change for the issuer) triggers an obligation to file a supporting technical report. The CSA cautions that they have significant concerns about PEA disclosure on mining issuers' websites, including in investor presentations, fact sheets, and posted or linked third party reports, that is not supported by an existing technical report.

Conclusion

The Staff Notice should be used as a "self-assessment tool" and provides mining issuers with practical information to strengthen their compliance and improve the quality of their disclosure to investors. The Staff Notice recommends that the QP responsible for particular technical information review all investor presentations and other website disclosure prior to the posting of such materials.

The CSA has indicated that they will continue to review mining issuers' website disclosure as part of their overall continuous disclosure review program. Issuers identified as having material disclosure deficiencies will be required to correct the deficiencies and may be subject to further sanctions depending on the severity of the non-compliance and the issuer's response. The Staff Notice further cautions that if non-compliant disclosure is discovered in the context of a prospectus offering, the offering will likely be delayed while the deficient disclosure is corrected.

To view the original article please click here.

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 Mondaq.com.

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

Authors
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
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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