SEC Adopts Rules to Modernize Property Disclosures for Mining Registrants

On October 31st, the SEC adopted amendments to modernize property disclosures for mining registrants.  The amendments aim to improve the quality and reliability of information provided to the investors by closely aligning the disclosure requirements and policies for mining properties with current industry and global regulatory practices and standards.
Key aspects of the amendments:

  • Require a registrant with material mining operations to disclose certain information concerning its mineral resources in addition to its mineral reserves;

  • Require a registrant’s disclosure of exploration results, mineral resources, or mineral reserves in SEC filings to be based on, and accurately reflect information and supporting documentation prepared by a “qualified person” (i.e., a mining expert);

  • Require a registrant to obtain a dated and signed technical report summary from the qualified person. This technical report summary will also be filed as an exhibit to the relevant SEC filings in certain circumstances; 

  • Require certain registrants with material mining operations to provide investors with an overview of its properties and mining operations, including summary and individual property disclosure provisions in either a narrative or tabular format; and

  • Provide updated definitions of mineral reserves and mineral resources.

The final rules reflect numerous changes to the proposed rules issued in June 2016 based on feedback received by the SEC on the proposal.  The SEC’s press release on the amendments contains further details about these changes.
Registrants are required to comply with the new rules in their first fiscal year beginning on or after January 1, 2021.  Registrants may voluntarily apply the new disclosure requirements at an earlier date.  The existing disclosure requirements contained in Guide 7 remain effective until all registrants are required to comply with the final rules, at which time they will be rescinded.