The Canadian Securities Administrators (CSA) have published CSA
Staff Notice 43-309, which summarizes the findings of staff of the
Autorité des marchés financiers, the British Columbia
Securities Commission and the Ontario Securities Commission and
outlines the CSA's expectations for website and investor
presentation disclosure by mining issuers. The Staff Notice
concludes that investor presentations found on many mining
issuers' websites contain non-compliant disclosure. Incomplete
information and overly promotional language were identified as key
areas of concern. Mining issuers are expected to use the Staff
Notice as a tool to strengthen their compliance with securities
The CSA review was aimed at understanding the nature, extent and
securities law compliance of disclosure in investor presentations
of mining issuers with a view to assisting issuers improve the
quality of their disclosure. To that end, staff reviewed investor
presentations of 130 pre-production mining issuers listed on the
TSX, TSXV and CSE for compliance with National Instrument 43-101
Standards of Disclosure for Mineral Projects (NI 43-101)
requirements applicable to written disclosure. The Staff Notice
summarizes the results of this review.
The CSA found that only 18% of the investor presentations
reviewed substantially complied with NI 43-101. Fifty-seven per
cent had items of minor non-compliance and 25% contained major
non-compliance. As a result, the CSA sent letters to 49 issuers
requiring some sort of corrective measure, including providing
undertakings with respect to future compliance, issuing a
corrective press release or, in the most serious cases, filing or
refiling a technical report.
Of the 130 investor presentations reviewed, only 54 complied
with the NI 43-101 requirement to specifically identify the
qualified person (QP) who was responsible for approving the
technical disclosure in the presentation. The CSA highlighted the
fact that these 54 presentations had a much lower level of major
non-compliance (only 15%) than presentations that did not name a
The most significant areas of non-compliance identified in the
Staff Notice included:
not identifying a responsible QP;
not including required cautionary statements when disclosing
financial results from a preliminary economic analysis level
not clearly stating whether mineral resources disclosed in a
presentation included or excluded mineral reserves; and
non-compliant exploration target disclosure (i.e., failing to
express the exploration target as a range, not including required
cautions or both).
There were also a handful of instances where information
included on an issuer's website included economic disclosure
that was not supported by an existing technical report. Although
those instances of non-compliance were relatively rare (occurring
in only five of 81 presentations that included PEA or scoping study
level results), the Staff Notice cautions that the CSA has
significant concerns about this practice and reminds issuers that
unsupported economic disclosure about a project may trigger a
requirement for the issuer to file a technical report.
Finally, the Staff Notice highlights significant concerns over
the use of overly promotional or potentially misleading language in
investor presentations. Terms such as "world-class",
"spectacular and exceptional results", "production
ready" and "ore" (when used in relation to mineral
reserves) were identified as the kind of statements that could be
considered misleading, especially when used by exploration stage
and mineral resource stage issuers.
Making investor presentations available on a website is a
convenient and effective way for an issuer to communicate with its
investors. While these materials are by their nature more
"user friendly" and promotional in tone and content than
core disclosure documents such as material change reports, annual
information forms and prospectuses, the Staff Notice is a good
reminder that all written disclosure, including investor
presentations, must comply with NI 43-101 and other securities law
requirements applicable to written disclosure. If the CSA
identifies non-compliant disclosure on an issuer's website or
in an investor presentation, the issuer may be required to take
actions to address the non-compliance. Should non-compliant
disclosure come to light in the context of a prospectus offering,
the offering itself might have to be deferred while deficiencies
The content of this article does not constitute legal advice
and should not be relied on in that way. Specific advice should be
sought about your specific circumstances.
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