BCN 2001/04 - Adoption of National Instrument 43-101 Standards of Disclosure for Mineral Projects and Related Documents and Rescission of National Policy No. 2-A [BCN - Rescinded]
The Commission, together with other members of the Canadian Securities Administrators, has adopted National Instrument 43-101 Standards of Disclosure for Mineral Projects (the “National Instrument”), including related Form 43-101F1 Technical Report, and Companion Policy 43-101 CP (the “Policy”). In this notice, the National Instrument and the form are referred to collectively as “NI 43-101”. NI 43-101 and the Policy regulate all public disclosure, written and oral, of scientific and technical information concerning mineral projects.
The full text of NI 43-101 (B.C. Reg. 12/2001) and the Policy is attached to this notice. NI 43-101 and the Policy are effective February 1, 2001.
NI 43-101 is an initiative of the CSA and has been or will be adopted as a rule in each of British Columbia, Alberta, Manitoba, Ontario, Nova Scotia and Newfoundland, as a commission regulation in Saskatchewan and as a policy in all other jurisdictions represented by the CSA. The Policy is expected to be implemented as a policy in all CSA jurisdictions by February 1, 2001.
Effective February 1, 2001, National Policy No. 2-A Guide For Engineers, Geologists and Prospectors Submitting Reports on Mining Properties to Canadian Provincial Securities Administrators (“NP 2-A”) is rescinded and replaced by NI 43-101 and the Policy. Also effective that date, Form 54 Technical Report on Mineral Properties Excluding Oil and Gas is replaced by Form 43-101F1.
The Commission, together with other members of the CSA, first published drafts of the National Instrument and Policy for public comment on or about July 3, 19981 and subsequently published amended drafts of the National Instrument and Policy and a draft of Form 43-101F1 on March 24, 20002. The Commission provided advance notice and published the text of NI 43-101 and the Policy on November 17, 2000.3
Comments on the drafts published in March 2000 were received from 47 commenters. A full description of the comments received and the response of the CSA to those comments may be found in NIN#2000/50. That notice also contains a discussion of specific changes made to the March 2000 publication drafts.
Substance and Purpose of NI 43-101 and the Policy (the “Instruments”)
The Instruments were designed to replace NP 2-A and, in British Columbia, Form 54. The Instruments consolidate and expand significantly on the current disclosure and reporting requirements applicable to issuers in the mining sector. The purpose of the Instruments is to enhance the accuracy and integrity of public disclosure in the mining sector.
The National Instrument regulates all disclosure that an issuer makes concerning mineral projects that is reasonably likely to be made available to the public. Form 43-101F1 provides for the content of disclosure to be contained in a technical report. The Policy states the views of the CSA on various matters relating to NI 43-101.
All disclosure concerning mineral projects, including oral statements and written disclosure in news releases, prospectuses and annual reports, must be based on information prepared by or under the supervision of a “qualified person” as defined in the National Instrument.
A qualified person is an engineer or geoscientist with at least 5 years experience, who has experience relevant to the mineral project and to the technical report, and who belongs to a “professional association” as defined in the National Instrument. The Association of Professional Engineers and Geoscientists of British Columbia qualifies as a “professional association” under the National Instrument.
In certain circumstances, the disclosure must be supported by a written technical report that a qualified person prepares and certifies in accordance with the form and that the issuer files with the securities regulatory authorities. In specified circumstances, a qualified person who is independent of the issuer must prepare and certify the technical report.
Disclosure of mineral resources and mineral reserves is to be made in accordance with standard definitions developed and adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) from time to time. These definitions are incorporated by reference into the Instruments. The current definitions and guidance by the CIM on their usage are attached as an Appendix to the Policy. Any changes made to the definitions by the CIM will automatically be incorporated by reference into the Instruments.
There may be rare instances where the disclosure obligation under the National Instrument conflicts with the requirement under section 85(1)(b) of the Securities Act that an issuer file a material change report within 10 days following the occurrence of a material change. For example, if an assay lab sends assay results to an issuer at a time when no qualified person is available to review and approve those results for publication, and the assay results are a material change in the affairs of the issuer, then the issuer may be unable to meet both the 10 day deadline for publication of a material change report and the requirement that scientific and technical disclosure on mineral projects be based on the advice of a qualified person.
In this situation, to ensure compliance with both the Act and the National Instrument, an issuer may wish to file a confidential material change report under section 85(2) of the Act. In addition, if the issuer expects there to be a significant delay before a qualified person can review the results, the issuer may wish to apply for relief from section 2.1 of the National Instrument, so that the issuer can disclose the material change without the involvement of a qualified person. The Commission will consider any such application on its individual merits.
The Instruments are consistent with the recommendations of the Final Report of the TSE-OSC Mining Standards Task Force. The CSA are of the view that the Instruments will enhance investor protection and the fairness and efficiency of capital markets.
The CSA are establishing a Mining Technical Advisory and Monitoring Committee to advise the CSA on a variety of industry and professional developments related to securities regulatory issues arising in connection with the Instruments and to serve as a forum for continuing communication between the CSA and the mining industry. More information on the Committee is provided in CSA Notice 43-301. The CSA anticipate that the Committee will be established by March 2001.
The National Instrument provides limited relief from the requirement to file a technical report to an issuer in certain instances. If an issuer has made disclosure of scientific and technical information on a mineral property in an annual information form (“AIF”), prospectus, material change report or annual financial statement (a “disclosure document”) or in a technical report under NP 2-A filed before February 1, 2001, the issuer will not be required to prepare and file a technical report under the Instruments with its AIF, annual report or short form prospectus unless the AIF, annual report or short form prospectus contains new and material scientific and technical information about that mineral property.
Questions relating to NI 43-101and related documents may be referred to:
Senior Legal Counsel, Policy and Legislation
British Columbia Securities Commission
or (800) 373-6393 (in B.C.)
Mining Consultant, Corporate Finance
British Columbia Securities Commission
or (800) 373-6393 (in B.C.)
DATED at Vancouver, British Columbia on January 30, 2001.
Douglas M. Hyndman
Ref: National Policy No. 2-A
Securities Act, sections 85(1)(b) and 85(2)
CSA Notice 43-301
This Notice may refer to other documents. These documents can be found at the B.C. Securities Commission public website at www.bcsc.bc.ca in the Commission Documents database or the Historical Documents database.