Mining companies listed in Canada will be familiar with the need
to comply with the requirements of National Instrument 43-101
"Standards of Disclosure for Mineral Projects" (NI
43-101). NI 43-101 sets out rules and guidelines for reporting
information related to mineral properties owned, or explored, by
companies reporting their results on Canadian stock exchanges. Such
companies are used to ensuring that their feasibility studies and
reporting of resources and reserves comply with the disclosure
requirements and standards in NI 43-101. What it seems they are not
so good at is applying those same standards to the preparation of
their investor presentations.
The Canadian Securities Administrators have published a notice
entitled "Review of Website Investor Presentations by Mining
Issuers, CSA Staff Notice 43-209" (the "Notice")
reminding companies of the need to ensure that their investor
presentations and websites comply with NI 43-101 to the same extent
as more formal technical disclosures. The Notice followed a
review of 130 investor presentations for compliance with NI 43-101
and the requirements of NI 51-102 in relation to forward looking
According to the Notice, the results of the review highlight the
need for mining companies to improve their disclosure in order to
comply with the following requirements of NI 43-101:
Naming the qualified person (QP): the Notice
states that the review by a QP of the technical information in an
investor presentation directly improves compliance with the
requirements of NI 43-101.
Preliminary economic assessments (PEA):
providing the required cautionary statements in a presentation
ensures a proper understanding of the limitations of the results in
Mineral resources and mineral reserves: a clear
statement whether mineral resources include or exclude mineral
reserves is essential to avoid misleading disclosure.
Exploration targets: the Notice reminds
companies that the potential quantity and grade must be expressed
as a range and be accompanied by the required statements outlining
the target limitations.
Historical estimates: disclosure must include
source, date, reliability, key assumptions and should be
accompanied by the required cautionary statements.
The CSA highlighted the use in presentations of terms such as
"world-class", "spectacular", "production
ready", or "ore". To the cheers of lawyers
undertaking verification everywhere, the Notice states these
phrases are often misused by exploration or mineral resources stage
companies and could lead to misrepresentations.
Disclosure by companies at the mineral resource stage or earlier
of anticipated economic outcomes for their project (such as
production rate, capital and operating costs, or mine life) which
suggest that their project is at a more advanced stage of
development than is supported by their existing technical report,
may trigger the filing of a new technical report to support those
The CSA expects mining companies to use the Notice to strengthen
their compliance with NI 43-101 in relation to their investor
presentations and websites with a view to improving their
disclosure to investors. It warns that a failure to do so may
result, at the best, in a warning letter to correct the relevant
disclosure and, at worst, the placement of the company on the
reporting issuer default list and ultimately a suspension from
trading until the deficiency is corrected.
At first sight, the need to comply with the detailed disclosure
requirements of NI 43-101 may seem anathema to the primary purpose
of an investor presentation and a website, namely as sales
materials. However, by allowing enough time to prepare and review
the presentation, using appropriate appendices (which can
incorporate previously filed documents by reference) and including
the necessary cautionary statements, it should be possible to
reconcile the regulatory requirements with the commercial purpose
of the presentation.
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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