Disclosure

Under the relevant securities regulations, a public company is required to make "full, true and plain disclosure of all material facts" in its prospects when it goes public or otherwise issues shares in the primary market and, after that, to make continuous financial disclosure and timely disclosure of material changes. Junior companies often have no revenue, rendering their financial disclosure of limited relevance. But nonetheless, their technical disclosure filings can and should be used by investors to make informed decisions.

A mining company's disclosure obligations begin with its activities (such as the way in which it conducts its exploration program), through the assembly of technical information (such as drilling records and assay results), to the production of technical filings, filing such reports with regulatory authorities and the disclosure of the information by way of public news release.

The interpretation of analysts for clients provides a different kind of disclosure about mining companies. A large amount of parties are involved in the process, including mining companies, promoters, brokers and analysts and investors themselves.

Quite a few exchanges now require that a Qualified Person be responsible for designing programs and making sure that these programs are performed in accordance with industry standards. Any failure by a Qualified Person in the discharge of these responsibilities would make him subject to disciplinary action from his professional organization and, possibly, regulatory authorities. In addition, officers and directors who fail to discharge their duties could face limited statutory liability for the misleading continuous disclosure of their public companies.

Brokers and mining analysts are regulated by professional associations and securities regulators. In some jurisdictions, new regulations oblige them to differentiate between their opinions and information provided by mining companies, as well as provides the basis for any conclusions, opinions or calculations contained in their reports.

Under new guidelines imposed by most Canadian exchanges, technical reports on exploration results must include:

• results of all surveys and investigations on the property;
• details of the interpretation of exploration information and plans for future work on the property;

a description of the geology, mineral occurrence and nature of mineralization found:

• rock types, mineral distribution, structural controls, the cutting criteria used to establish the sampling interval and the identification of any significantly higher-grade section within a lower-grade interval;
• details of the location, number, type, nature, spacing or density of samples collected and the area covered;
• details of the type of assaying or analytical procedure used, sample size and name and location of the assay or analytical laboratory used and its accreditation;
• The true width of the individual assays, to the extent known.