The Securities and Exchange Commission today announced that it has proposed rules to modernize the disclosure requirements for mining properties by aligning them with current industry and global regulatory practices and standards. The proposed revisions would update disclosure requirements for mining registrants in Item 102 of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and related guidance in Industry Guide 7.
“These proposed rules would modernize the Commission’s disclosure requirements by aligning them with global standards and give investors more comprehensive information of a registrant’s mining properties that they can use to make informed investment decisions,” said SEC Chair Mary Jo White. “This proposal is another product of our disclosure effectiveness initiative, which is aimed at modernizing our disclosure regime and providing more meaningful information to investors.”
The Commission’s proposed rules would:
- Provide one standard requiring registrants to disclose mining operations that are material to the company’s business or financial condition
- Require a registrant to disclose mineral resources and material exploration results in addition to its mineral reserves
- Permit disclosure of mineral reserves to be based on a preliminary feasibility study or a final feasibility study
- Provide updated definitions of mineral reserves and mineral resources
- Require, in tabular format, summary disclosure for a registrant’s mining operations as a whole as well as more detailed disclosure for material individual properties
- Require that every disclosure of mineral resources, mineral reserves and material exploration results reported in a registrant’s filed registration statements and reports be based on, and accurately reflect information and supporting documentation prepared by, a “qualified person”
- Require a registrant to obtain a technical report summary from the qualified person, which identifies and summarizes for each material property the information reviewed and conclusions reached by the qualified person about the registrant’s exploration results, mineral resources or mineral reserves
In addition, the proposed rules would rescind Industry Guide 7 and include the Commission’s mining property disclosure requirements in a new subpart of Regulation S-K.
Public comment on the proposed rule should be received by the Commission no later than 60 days after publication in the Federal Register.
The Commission’s rule proposal reflects the significant changes that have taken place in the mining industry since the Commission last updated Industry Guide 7. During this period, mining has become an increasingly globalized industry and several foreign countries have adopted mining disclosure standards based on the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) that significantly differ from Guide 7.