Form 54 - Technical report on mineral properties excluding oil and gas [F - Rescinded]
| Published Date: | 1997-06-27 |
|---|---|
| Effective Date: | 1997-06-25 |
| Rescinded Date: | 2001-02-01 |
This is the form to be used by a Natural Resource Issuer required by section 109 of the Securities Rules to file a report on its Mineral properties excluding Oil and Gas.
FORM 54
Securities Act
TECHNICAL REPORT ON MINERAL PROPERTIES EXCLUDING OIL AND GAS.
General Instructions
- Reports submitted must be engineering documents. They must be factual and the recommendations must be warranted in the light of the information and data presented in the report. The author must state that, in his judgment, the venture is of sufficient merit to make the work recommended a worthwhile undertaking.
- The information supplied in a report should be sufficient and positive enough to warrant the recommendations made. An estimate of costs for the proposed program should be included.
- If the potential merit of a property is predicated entirely or in part on results obtained on neighbouring ground, the known history of the latter should also be covered.
- A description of mineralization encountered on the property should be given detailing the strike length, width, continuity and the basis of such measurement together with a description of the type, character and distribution of the mineralization. References as to its grade should be substantiated by assays with the dates thereof, and by assay plans and sections. In addition to giving the widths of the individual samples it should be stated whether these are the author's own samples or those of other parties. The method of sampling should be described making it clear whether assay results are based on channel samples, chip samples, grab samples, character samples or core samples.\
- Values in precious metals should be expressed in ounces per ton or grams per metric ton and the content of other metals, etc., in percentages or pounds per ton but not in dollars or other currency.
- A report must be based on a personal examination of the property at a time of year when climatic conditions permit an adequate examination to be carried out.
- When information or data in a report is not based on his own observations, the author must provide a precise reference to the source of information used to reach his conclusions and recommendations. When such information is derived from unpublished or private reports or records, a photostatic or other authenticated copy of the original should be submitted, together with a letter of consent and a certificate of qualification respecting that author's professional qualification, except where the report is a matter of public record such as those on open file in a provincial or federal natural resources department.
- The author should satisfy himself that he has disclosed all relevant material of a technical nature which to the best of his knowledge might have a bearing on the viability of the project or the recommendations in his report.
- When an examination has been made more than a year prior to the date of the report, some assurance must be provided by the engineer that changes which have occurred during this time will not affect the conclusions or recommendations contained in the report.
Item 1 - Qualifications and General Requirements for Authors
1.1 Technical reports on mineral properties, excluding oil and gas, filed with a prospectus submitted by a natural resource issuer shall be prepared by professional engineers or professional geoscientists who are members in good standing of the Association of Professional Engineers and Geoscientists, or by geologists who are Fellows in the Geological Association of Canada, or by other qualified persons acceptable to the Executive Director.
1.2 Where a statement of material facts is involved, the author of the technical report and the report itself must also be acceptable to the Vancouver Stock Exchange.
1.3 Engineers, geoscientists and officers of the issuer are reminded that where a property is located within British Columbia, the (B.C.) Engineers and Geoscientists Act requires that the practice of professional engineering and professional geoscience be performed by members or licensees of the Association of Professional Engineers and Geoscientists of the Province of British Columbia. In the case of an out-of-province or out-of-country property, the author should be a member of an acceptable professional association.
Item 2 - Conflict of Interest
2.1 Where the proceeds of the issue are being applied to the property being reported upon, the author must be free of any association with the issuer.
2.2 The report shall not be written by a director, officer or employee of the issuer or of an affiliate of the issuer or who is a partner, employer or employee or any director, officer or employee or who is an associate of any director or officer of the issuer or of an affiliate of the issuer.
2.3 The report shall not be submitted if the author or any partner or employer of or associate beneficially owns, directly or indirectly, any securities of the issuer or of a subsidiary thereof or, if the issuer is a subsidiary, any securities of the parent issuer.
2.4 This restriction in 2.3 does not apply to a person, partner, employer or associate, employer or associate is not empowered to decide whether securities of the issuer or the parent issuer, as the case may be, are to be beneficially owned, directly or indirectly, by him, or if he is not entitled to vote in respect thereof.
2.5 The author should be independent of the vendor of the property to the issuer. A qualified person, furthermore, should have no current direct, indirect or contingent interest in a property on which he is reporting.
2.6 The author should disclose any past interest, direct or indirect in the subject property or any past or present interest in any other property within a radius of ten kilometers of the subject property.
Item 3 - Form and Content of Technical Reports
The information included in a technical report shall provide full disclosure in order to assist an investor to evaluate the economic prospects of the subject property. A scholarly treatise on some technical aspect of a property having little impact on its economic prospects does not serve the needs of the investor.
Content of Reports
A complete report should include a description of the properties of the issuer and should contain all pertinent exploration data including plans and sections. The report should be presented under the following headings as applicable:
3.1 Table of Contents
3.2 Summary
3.3 Preamble or Introduction including author's terms of reference
3.4 Property, Description and Location
3.4.1 The description of the properties must include claim numbers, whether patented or unpatented and if contiguous. The percentage of interest held in the properties should be stated.
3.4.2 The author must accurately locate a mining property on which he is reporting by Section, Township and Range, or Latitude and Longitude and/or National Topographic Series, and by distance and direction from the nearest centre of population.
3.5 Accessibility, Climate, Local Resources
3.6 History - comprehensive, with references to all previous work for which records are available
3.7 Geology
3.8 Mineral Deposits and their state of Development - The report must clearly distinguish between mineral showings which occur on the issuer's property being reported upon and those elsewhere in the area.
3.9 Reserves and Production
3.10 Conclusions and Recommendations with Cost Estimates
3.11 In Intermediate (Development) and Senior Financing (Production) Reports, the following vital considerations must be explored:
Recoverability and amenability of the raw material
Tonnage and grade versus optimum profitability
Markets
Smelter Contracts, tolls and transportation
Taxes
Cash flow, capital and operating cost estimates
Payback of capital with interest
3.12 Recommended Work Programs
3.12.1 Where substantial drilling programs are proposed (in excess of 4,000 meters), the author in his recommendations should provide for an intermediate stage at which time an appraisal can be made to recommend continuance, substitution of some other type of exploration, or abandonment of the project.
3.12.2 Where more than one stage or phase of exploration is recommended by the author, advancing to the second stage or phase should be contingent on receiving encouraging results in the preceding stage or phase.
3.12.3 On those occasions where logistics, climatic conditions, governmental regulations or other elements suggest staging or phasing a program without regard to previous results would be advantageous, these reasons must be clearly stated by the author.
Item 4 - Maps
4.1 Reports must be well illustrated by plans and by sections to give an adequate picture of the property. All reports must be accompanied by a location or index map and a more detailed plan showing all important features described in the text. If nearby properties have an important bearing on the possibilities of the ground under consideration, their location should be known on the maps. Where the mineralized or ore-bearing structures are expected to pass from one property to the other, this should be indicated clearly on the map.
4.2 In case the potential merit of a property is predicated on geophysical or geochemical result, maps showing result of the surveys and the interpretations should be submitted.
4.3 All maps should show a scale, a North arrow, and should be signed and dated. If geological features or other data have been taken from government maps or from drawings of other engineers or geologists, this should be properly acknowledged.
4.4 Maps and sections should be provided which illustrate the pertinent geology as well as the vein or mineral pattern developed or expected to be developed and the sample and assay data.
4.5 The report should also include a map illustrating the claim outline, its size and the relative position of the samples, anomalies, outcrops, workings and mineralization and the coverage of various types of geophysical and geochemical surveys and geological mapping carried out within the claim.
4.6 Where a property has had some previous production or extensive exploration, maps and sections must be provided to illustrate why additional exploration is being proposed. If such maps are unavailable, this must be disclosed and an explanation given as to why such a proposal is being made without access to such maps. Such disclosure is essential where there is an assertion that such a property might have above average merit, since it must be demonstrated that there is some reasonable expectation that additional or higher grade ore reserves can be found and a potential continues to exist.
4.7 Where a map intended for publication is submitted in a format not suitable for commercial duplication, it should be accompanied by a copy of the map in a form adapted for duplication in the prospectus or statement of material facts.
Item 5 - Supplementary Information
5.1 Obstacles toward Exploration, Development or Production
Where an inherent obstacle toward future production is evident (e.g. serious environmental problems, shortage of water, security of title, doubtful recovery process, etc.), such obstacle should be disclosed in the report, together with the author's opinion or evaluation of the outlay and course of action required to remedy such obstacle.
5.2 Geological Environment
A report contemplating an exploration and development program should normally cover a set of claims which are in close proximity and are located within the same geological environment. If two or more properties are being reported on, a separate report should be made on each property which does not bear a close geological relationship to the other properties. However, where a report involves a program to explore a geological, geophysical or geochemical concept over an identified region prior to staking claims over anomalies, showing or mineral occurrences which may be discovered, the "close proximity" rule need not be observed.
5.3 List Related Reports
A list of all reports prepared within the past five years by the author in the area encompassed by the subject property, including the date of each report and the name of the client for whom the report was prepared should also be included in the subject report.
5.4 Where Addendum Required
Where the date of a report predates the date of the certificate appearing on the definitive version of a prospectus or statement of material facts by more than twelve months, the author must furnish an addendum, dated within sixty days of the date of the prospectus or statement of material facts, either:
5.4.1 attesting to the continuing validity of the information contained in the report, including the recommendations and cost estimates, OR:
5.4.2 setting out any amendments to the recommendations and cost estimates prompted; by fluctuations in monetary purchasing power, by results of work carried out on the property or contiguous properties since the date of the report or for any other reason. Where there has been significant subsequent exploration on the subject property, a new report rather than an addendum is required.
5.5 Where Amendment Required
Each report published by an author on a specific property should be distinct from all reports previously published by the author on the property. Revised reports accordingly should either be noted "as revised on (current date)" or redated as at the date of revision.
Item 6 - Consent to use of Name in Prospectus
See section 106 of the Securities Rules.
Item 7 - Certificate of the Author
The certificate must be under the professional seal or permit stamp of the individual making the report.
See regulation 110.
Item 8 - Consent Letter
7.1 The report must be accompanied by a letter from the author consenting to the inclusion of his report and/or summary thereof in the prospectus or statement of material facts.
7.2 Irrespective of the manner in which B.C. requirements are complied with, it is likely that the body of a prospectus or a statement of material facts will contain references to or excerpts from a technical report. Where such references and excerpts appear in the interest of full, true and plain disclosure rather than as the sole means of compliance with the requirement for summary, the consent of the author of the full report to such references and/or excerpts is not required.
Form 54Appendix 1
Use of Technical Terms
Care should be taken in the use of the word "ore". The term is defined as follows:
"ore" means a natural aggregate of one or more minerals
(a) that may be mined and sold at a profit, or
(b) from which some part may be profitably separated,
at a specified time and place;
"proven Ore" and "measured ore" mean any material where
(a) the tonnage of that material is computed from dimensions revealed in outcrops, trenches, underground workings or drill holes,
(b) the grade is computed form the results of adequate sampling,
(c) the site available for inspection, the measurement of the material and the sampling of the material are so spaced and the geological character so well defined that size, shape and mineral contents of the material are established, and
(d) the computed tonnage and grade of the material are judged to be accurate within stated limits;
"probable ore" and "indicated ore" mean any material where
(a) the tonnage and grade of what material are computed
(i) partly from specific measurements,
(ii) partly from sample data or production data, or both, and
(iii) partly from projection for a reasonable distance on geological evidence, and
(b) the site available for inspection, the measurement of the material and the sampling of the material are too widely or inappropriately spaced to outline the material completely or to establish its grade throughout;
"possible ore" and "inferred ore" mean any material where
(a) quantitative estimates of that material are based largely on broad knowledge of the geological character of the deposit,
(b) samples or measurements of deposits of that material are few, if any, and
(c) the estimates of that material are based on
(i) an assumed continuity or repetition of deposits of it, and
(ii) reasonable geological indications which may be obtained by comparison with deposits of similar material, including comparison of bodies of material that are completely concealed if there is specific evidence of their presence;
Where the word "ore" may not properly be used, such terms as "mineralization", "mineralized bodies" or "concentrations", etc. should be used.