Securities regulators require public companies investing in mineral projects to disclose specific technical information. The Committee for Mineral Reserves International Reporting Standards (CRIRSCO) has consolidated reporting codes and standards to produce a consistent definition of a mineral resource. These do not govern the rules, but instead provide the template and standard definitions upon which reporting codes are based. Each reporting code has its own disclosure requirements. The Qualified/ Competent Person (QP/CP) must have a solid foundation in the relevant reporting codes.
Reporting codes standardise the terms and definitions used in reporting across
exchanges, provide confidence to investors through transparency, and provide accountability and responsibility for the estimates through the QP/CP. They do not provide a road map for good practice or mineral resource estimates, nor standardise the level and format of disclosure in different markets.
While the terms, definitions and guiding principles of materiality, transparency and competency remain the same across the codes, there are differences in formats and requirements that need to be understood by the QP/CP. Understanding the formats and when they apply is critical; for example, in Canada, all disclosure is considered under the rulings, from annual and technical report summaries to websites and digital media. In comparison, in the US, only the filings with securities exchange are governed by the rules. To accompany the rules as defined by the regulators, there are also standards set by industry that detail the recommended standards of best practice.
In the US, Guide 7, which was historically used as the basis for reporting on mining projects, prohibited the disclosure of mineral resource. On 31 October 2018, the US Securities and Exchange Commission adopted new mining property disclosure requirements (S-K 1300). The new rules affect existing primary and secondary listings on US stock exchanges, as well as new listings. To enable the registrant to declare mineral resource, an initial assessment that includes all aspects generally considered under reasonable prospects for eventual economic extraction (RPEEE) must be completed as the minimum requirement. S-K 1300 defines the required level of studies, further highlighting a shift in the importance of the definition of ‘potential eventual’ economic extraction. Whether this influences the reporting codes to tighten controls remains to be seen, but with JORC currently conducting a survey for a potential update in the near future, it is possible.
The QP/CP should be familiar not only with the reporting codes in the primary
listing, but potential impacts on secondary listings related to all mining disclosures. As codes evolve, the QP/ CP must ensure their knowledge and understanding of codes and guidelines is current, while maintaining the core principles of materiality,
transparency and competency. Ethical practice and reporting should follow the rules and guidelines and provide transparent disclosure, or in other words, ‘disclosure with professional accountability’.
