The current mineral asset disclosure framework is based on the CRIRSCO template and encapsulates various sources of guidance such as the Australasian JORC Code, the Canadian CIM Definition Standards (and instrument NI 43-101), and the US SEC S-K 1300. The application of this framework has provided improved public disclosure consistency across international markets and between local reporting codes, guidance and disclosure regulations. One key area in which the framework provides guidance relates to the public reporting of technical study information, in particular for prefeasibility and feasibility levels of study.
Key improvements have been achieved largely through common definitions. These include technical study level types, as well as ensuring the Competent/Qualified Persons and company management prepare disclosures based on the key principles of competency, transparency, and materiality, such that they are clear, complete and unambiguous. In this regard there remain inconsistencies between how Competent/Qualified Persons actually interpret the level of detail and explanation appropriate for disclosure.
An important improvement in disclosure quality has been the implementation of the accounting principle, which is to report material matters on an ‘if not, why not?’ basis. This requires reporting on all material matters of importance to the reader, namely the investor. And so, if a particular matter is not disclosed, why is it not reported on, and when reported on, is the meaning and relevance clear? It should be clear to an investor which key items have been considered, which have been deemed of low consequence or remain to be addressed or resolved. Getting this right, namely providing sufficient information as well as a professional opinion on relevance, requires ongoing effort to improve the quality of technical public disclosures.
It is not uncommon for companies at different stages of maturity to interpret and apply the disclosure guidance differently. Companies, especially junior companies with early-stage exploration and assessment projects wish to inform the market about the technical details of their project, but at the same time seek to promote the project to investors. Given these competing requirements a reasonable question to ask is whether a technical study was completed to support construction of the operation or as a public disclosure/marketing exercise. Given this, project proponents must ensure that any public disclosures relating to either a pre-feasibility or feasibility level of study have a reasonable basis and are supported by reasonable grounds for any such forward-looking statements. At the same time, those relying on such information need to understand the basis is clearly and reliably supported.
This article is based on an interview by Northern Miner with Mark Noppé and John Pfahl in November 2020.
