The Canadian Securities Administrators yesterday
released a staff review of investor presentations on
mining issuers' websites, providing valuable insights on how
the regulators interpret and apply NI 43-101 and other disclosure
requirements and ultimately finding that "there is room for
improvement" in order to comply with applicable regulatory
The review, which assessed compliance with NI 43-101 Standards of Disclosure for
Mineral Projects and the forward-looking information
(FLI) requirements of NI 51-102 Continuous Disclosure
Obligations, found a number of deficiencies with
disclosure in investor presentations posted on mining issuers'
websites. Of the 130 investor presentations reviewed, only 18% were
found to be in substantial compliance with disclosure requirements,
while 57% suffered from minor non-compliance and 25% had major
High levels of non-compliance identified by the review
the failure to provide the name of the qualified person and
their relationship with the issuer, with the review finding that
overall compliance increased significantly among presentations
reviewed by a qualified person;
disclosure of preliminary economic assessments (PEA) lacking
the required cautionary statements for the public to understand the
limitations of the results of the PEA;
when reporting both mineral resources and mineral reserves, a
lack of a clear statement whether mineral resources included or
excluded mineral reserves;
exploration targets that were not expressed as ranges or not
accompanied by the required cautionary statements outlining the
target's limitations; and
historical estimates that did not include the source, date,
reliability, key assumptions and required cautionary
Other areas cited for additional improvement included: reporting
only pre-tax financial results (or providing no information
regarding the tax rate for the mineral project); a lack of
information provided regarding the assumed metal price for
determining mineral estimates; and presentations with drilling
results failing to include information on true widths of
mineralized zones and not providing results of significantly higher
grade intervals enclosed in a lower grade intersection, such
information being identified by the CSA as particularly important
for early stage projects.
The review also reminds issuers that the 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) triggers the requirement to file a technical report, and
cautions that staff has significant concerns about PEA disclosure
on issuer websites in contravention of this requirement. This
includes economic projections in presentations, fact sheets and
statements as well as third party reports posted to or linked from
an issuer's website.
According to the notice, 38% of investor presentations reviewed
also included statements that may be overly promotional or
misleading, potentially resulting in a misrepresentation under
applicable securities legislation. Terms which are noted as
inappropriate in certain circumstances included
"world-class", "production ready" and
"spectacular and exceptional results".
The majority of investor presentations reviewed also included
FLI disclosure. Of those presentations, 54% did not provide
information required by NI 51-102 concerning the material factors
and assumptions used to develop the FLI (which, in addition to
compliance with NI 51-102, comprise important elements of the
secondary market civil liability defence to misrepresentations
contained in FLI). Issuers were reminded that FLI includes metal
price assumptions used in mineral resource and mineral reserve
estimates as well as other assumptions used in an economic analysis
and financial projections based on engineering studies.
Ultimately, the CSA state that they expect mining issuers to
strengthen their compliance and improve disclosure to investors,
and that they intend to continue to review mining issuers'
website disclosure as part of their overall continuous disclosure
program. Issuers identified as having disclosure deficiencies may
be requested to correct the deficiency (by amending or removing the
website disclosure or filing a clarifying or retracting news
release) and could ultimately suffer further sanction until the
issuer corrects the deficiency. The CSA further cautioned that, if
an issuer is considering a prospectus offering, the review of the
prospectus filing will likely be deferred if issues such as those
noted above are present.
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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