TORONTO (miningweekly.com) – The British Columbia Securities Commission (BCSC) on Thursday published a report summarising the most common findings of its continuous disclosure reviews, yearly compliance reviews, targeted reviews and prospectus reviews of technical disclosures by mining companies.

The BCSC has primary jurisdiction over and oversight responsibility for about 1 150 mining companies that report in BC, and this number includes mining companies that trade on Canadian markets, as well as BC companies quoted on any of the over‐the‐counter markets in the US.

The oversight commission said the reason for its reviews is to ensure the value of securities regulation that inspires investor confidence and supports fair, efficient and innovative capital markets.

“This is particularly important to mining companies, which are capital intensive and require timely access to funds to advance their projects. National Instrument (NI) 43‐101 Standards of Disclosure for Mineral Projects (the Mining Rule) play a significant role in promoting public confidence in our markets and establishing Canada as the world leader in mining disclosure standards,” the BCSC said.

The '2012 Mining Report' sets out the current views and interpretations of BCSC staff, whose most common findings were companies’ failure to file current or fully compliant technical reports; the failure to include the required cautionary statements for preliminary economic assessments, historical estimates and exploration targets; disclosure of mineral resources and mineral reserves (MRMR) that do not fully comply with NI 43‐101 standards; restricted or misleading references to mining studies and failure to name the qualified person (QP).

Reporting Standards Not Uniformly Found Wanting

The commission said it found that a company’s disclosures on websites, in investor relations materials and email promotions, on social media sites, and during corporate presentations (voluntary disclosure) were less likely to comply than its technical reports, news releases, yearly information forms and management discussion and analysis, which are required filings.

That said, some of the more common concerns around technical reports were missing or altered statements in certificates and consents of QP, prohibited disclaimers or statements of reliance on other experts, and noncompliant disclosure of MRMR, historical estimates and exploration targets.

“In appropriate cases, where failing to follow industry best practices is an issue, we may ask the company to retain another QP, acceptable to us, to author or co-author the technical report, or to audit or verify the work of the first QP,” the BCSC said.

The BCSC said its staff would question certain practices, among which are disclosure that is not based on industry best practices, anomalous metal or commodity pricing assumptions and sensitivity analyses, technical reports that do not disclose the QP’s assumptions regarding reasonable prospects of economic extraction, mineral resource estimates that are not based on an appropriate geological model or that do not apply reasonable constraints on mineralisation, and disclosure of ongoing mining studies prior to establishing mineral resources.

As at December 31, 2011, there were 962 BC mining companies listed on the TSX and TSX-Venture Exchange, representing about 70% of all BC companies and 58% of all Canadian mining companies listed on these exchanges. In 2011, these BC mining companies raised $2.4-billion through public offerings and a further $3.9-billion in the private placement market.

Both figures account for 77% of the total amount of investment dollars raised by BC companies during 2011.

In 2011, BC mining companies raised more money through public offerings than mining companies in any other Canadian jurisdiction, including Ontario, which came a close second.