Abstract
SYNOPSIS In June 2016, the US Securities and Exchange Commission (SEC) 'proposed a revision to its disclosure requirements-related guidance under the Securities Act and Exchange Act for properties owned or operated by mining companies'. On 31 October 2018, the SEC released its adopted final rules for property disclosures for mining registrants - 'Modernization of Property Disclosures for Mining Registrants'. The amendments are aimed at providing investors with a more comprehensive understanding of a registrant's mining properties, which should help them make more informed investment decisions. The new rules replace the SEC's Industry Guide 7 as of January 1, 2021. This paper investigates how the new subpart 1300 of Regulation S-K may affect future updates to the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) International Reporting Template, as well as international Reporting Codes. Critical changes such as the reporting of Mineral Resources exclusive of Mineral Reserves are discussed, the impact of third-party reporting regarding reducing Section 11 liability is considered, as is the trend of utilizing multiple qualified persons for technical reports. This paper highlights areas in the CRIRSCO and international Reporting Codes that may require consideration by Qualified and Competent Persons providing technical report summaries and Competent Persons Reports (CPRs). Keywords: SEC, 1300 of Regulation S-K, international Reporting Codes, CRIRSCO, Qualified/Competent Person, mineral reporting.
Highlights
On 16 June 2016, the US Securities and Exchange Commission (SEC) announced and published proposed changes to the reporting requirements for mining and mineral exploration companies
Based on the SEC’s reluctance to allow Mineral Reserves to be declared based on new technology, it may prove prudent for international Reporting Codes to provide guidance as to how new technology is used to justify Reasonable Prospects for Eventual Economic Extraction for Mineral Resources and the declaration of Mineral Reserves
The new rules are mainly aligned with CRIRSCO, the SK-1300 regulations highlight some of the future trends that may affect CRIRSCO and other international Reporting Codes, such as the SAMREC Code
Summary
On 16 June 2016, the US Securities and Exchange Commission (SEC) announced and published proposed changes to the reporting requirements for mining and mineral exploration companies. The replacement of Industry Guide 7 was brought about as it was found to be outdated; it only recognized Mineral Reserves based on a Feasibility Study, failed to acknowledge the full mining value chain of Exploration Results or Mineral Resources, and did not require Competent Persons to sign off on Company Technical Disclosures (Parsons et al, 2019). The format for reporting is similar to South Africa’s SAMREC Code, Australasia’s JORC Code, and Canada’s National Instrument (NI) 43-101. It is in line with the European PERC and the codes of Chile, Peru, and the Philippines, in which several US companies have operations. The revised SK-1300 is intended to aid investors or potential investors (the public) ‘by providing them with a more
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