Canadian Securities Regulators Re-Examining Disclosure Standards for Mineral Projects

On April 14, 2022, the Canadian Securities Administrators (CSA) issued a consultation paper (the “Consultation Paper”) seeking feedback about the efficacy of certain key provisions of National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101), and whether regulatory changes would address concerns expressed by certain stakeholders. The CSA are accepting comments on the Consultation Paper until July 13, 2022.

Purpose of NI 43-101

NI 43-101 governs disclosure of scientific and technical information regarding mineral projects of issuers that operate in the mining industry to protect the investing public and the integrity of the Canadian capital markets. All disclosure, whether oral or written, must be based upon information prepared by and under the supervision of a “qualified person”, and specified terminology is required when disclosing mineral resources and mineral reserves. In addition, mining issuers must prepare and file technical reports prepared by one or more qualified persons (who, in certain cases must be independent of the mining issuer).

Reasons for Change

As noted in the Consultation Paper, Canada plays a key role in mining capital formation and NI 43-101 is globally renowned as a leading standard for mineral project disclosures. However, the CSA believes there are a few reasons why improving and modernizing NI 43-101 might be required.

First, the Consultation Paper mentions that the mining industry has experienced various changes since NI 43-101 was last amended in 2011, which include (i) updates to definitions and best practices guidelines by the Canadian Institute of Mining, Metallurgy and Petroleum, (ii) emerging demand for commodities related to the growth in green energy and carbon neutral initiatives, (iii) increased awareness of the risks related to mineral project development, and (iv) an improvement of mineral project reporting codes and disclosure standards by other influential jurisdictions, including the United States and Australia.

The Consultation Paper also indicates that since 2011 the CSA has continually monitored the mineral disclosure requirements in NI 43-101 and gathered data evidencing certain deficiencies identified through continuous disclosure reviews, prospectus reviews, and targeted issue-oriented reviews.

Key Issues for Consultation

The CSA are soliciting feedback from stakeholders on a wide range of issues under NI 43-101, including questions and concerns relating to:

• disclosure for pre-mineral resource stage projects;
• the alignment of NI 43-101 disclosure requirements with disclosure requirements of other influential mining jurisdictions;
• the 45-day period allowed for filing a technical report following the initial disclosure of technical information in certain circumstances;
• the definition of qualified person considering evidence gathered by the CSA showing inaccurate self assessments by qualified persons of their independence, competence, expertise or relevant experience;
• data verification disclosure;
• historical estimate disclosure;
• preliminary economic assessment disclosure;
• personal inspections requirements applicable to qualified persons and whether such inspections can be achieved through the use of remote technologies;
• exploration information disclosure requirements;
• mineral resource and mineral reserve estimation disclosure;
• environmental and social disclosure;
• rights of Indigenous People disclosure; and
• capital and operating costs and economic analysis disclosure.

For the time being, the CSA are focused on collecting information to understand how to improve the current mineral disclosure requirements. As stated by Louis Morisset, CSA Chair and President and CEP of the Autorité des marches financiers, “[t]he CSA wants to ensure that Canada continues to set the gold standard for effective and efficient disclosure about mining issuers’ material properties.”

A copy of the Consultation Paper, which includes specific questions the CSA are hoping stakeholders will address, can be found here.  

For further information, please contact any member of our Capital Markets Group or Mining Group.