SEC proposes update to rule for mining registrants

The Securities and Exchange Commission (SEC) proposed rules to modernize the disclosure requirements for mining properties by aligning them with the current industry and global regulatory practices and standards. According to SEC, the proposed revisions would update disclosure requirements for mining registrants in Item 102 of Regulation S-K under the Securities Act of 1933, 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,” says SEC Chair Mary Jo White.

The SEC’s proposed rules would initiate the following changes:

• 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, a 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 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 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 cancel Industry Guide 7 and include the SEC’s mining property disclosure requirements in a new subpart of Regulation S-K. The SEC adds that public comment on this proposed rule should be received no later than 60 days after the publication of the proposed rule in the Federal Register. To submit comments, use the SEC’s online submission form or send an email to rule-comments@sec.gov.