United States: SEC Proposes Modernization Of Disclosure Requirements For Mining Registrants

The U.S. Securities and Exchange Commission ("SEC") recently proposed rules that, if adopted, would overhaul disclosure requirements for mining registrants.[1] As part of the SEC's ongoing disclosure effectiveness initiative, the proposed rules are primarily intended to align the SEC's disclosure requirements and related guidance with current industry practices and international standards, while reducing the complexity of current disclosure requirements. The proposed rules would apply to both domestic issuers and foreign private issuers, other than Canadian registrants filing reports under the Canada–U.S. Multijurisdictional Disclosure System.

Comments on the proposed rules are due on August 26, 2016.

Consolidation: Simplifying the Property Disclosure Requirements

The current mining company disclosure regime is spread across Item 102 of Regulation S-K, Industry Guide 7, and SEC interpretive guidance. Item 102 sets forth the basic disclosure requirements for a registrant's principal mines. For mining registrants with "significant mining operations," Industry Guide 7, which has not been substantively updated since 1982,[2] provides the views of the SEC staff on how mining registrants should comply with the SEC's disclosure requirements, principally with regards to the disclosure of information regarding "mineral reserves" and the classification of mineral reserves as "proven" or "probable."

The proposed rules would replace Industry Guide 7 with a new subpart 1300 of Regulation S-K that contains revised rules and codifies previously informal and interpretive guidance from the SEC staff.

Alignment: Modernizing the Property Disclosure Requirements

Currently, under both Item 102 and Industry Guide 7, registrants are generally not permitted to disclose estimates for non-reserve mineral deposits, or "mineral resources." Mineral resources, as opposed to mineral reserves, are generally understood in the mining industry to be mineral deposits having prospects for economic extraction that are less certain than those for reserves because economic viability has yet to be demonstrated. Many foreign disclosure regimes require disclosure of mineral resources, and that information is frequently disclosed by domestic issuers voluntarily outside of SEC filings.

The proposed rules would update the SEC's mining property disclosure requirements and largely align them with disclosure standards of the Committee for Mineral Reserves International Reporting Standards ("CRIRSCO"), which have been widely adopted by several countries with mining industries. Among other updates, the proposed rules would require SEC registrants with mining operations that are material to their business or financial condition to:

  • Disclose mineral resources and material exploration results in addition to mineral reserves, a noted departure from Industry Guide 7, where disclosure of mineral resources is not permitted in SEC filings;
  • Base disclosure of mineral resources, mineral reserves, and material exploration results on supporting documentation prepared by a "qualified person,"[3] and ensure that the disclosure accurately reflects information provided by the "qualified person";
  • Disclose "material exploration results" for each material property, including data and information generated by mineral exploration programs, such as sampling, drilling, trenching, analytical testing, assaying, and other similar activities undertaken to investigate a mineral prospect;
  • Base mineral resources and reserve estimates on long-term price assumptions that are generally no higher than the average 24-month historical price, and describe the registrant's internal controls and quality assurance measures used in exploration and reserve estimation efforts;
  • For registrants with material mining operations and with more than one mining property, provide summary disclosure of mining operations as a whole and on an individual property basis, including a map of all mining properties (whether or not material), tabular presentation of specified information on the registrant's 20 largest properties, and summary resource and reserve data with respect to both commodity type and geographical area; and
  • File a technical report summary with the SEC as an exhibit to public filings for each material property, to be prepared by a "qualified person" who will have liability as an "expert" under Section 11 of the Securities Act.

While the proposed rules would align U.S. disclosure requirements with those of other CRIRSCO-based disclosure regimes, they would also significantly expand the type and scope of information that mining registrants are required to provide to the SEC. The proposed rules would likely increase costs and liability concerns for many mining registrants, particularly those that do not currently report in jurisdictions with CRIRSCO-based disclosure requirements.

Preparing for the Final Rules: What Companies Should Do in Light of the Proposed Rules

Both domestic and foreign private issuers can take several steps to prepare for the revised disclosure requirements in anticipation of adoption of final rules.

Determine Whether Mining Operations Are "Material" to the Company's Business or Financial Condition. The proposed rules would trigger disclosure obligations for companies with mining operations that are material to their business or financial condition. In determining whether operations are material, companies should consider the proposed rules' presumption that mining operations are material if they constitute 10 percent or more of a company's total assets. Operations below that threshold may nonetheless be material depending on certain facts and circumstances.

Determine Whether Any Mining Properties Are Individually Material. Under the proposed rules, companies would be required to consider all mining properties individually and in the aggregate, regardless of size or commodity produced, when assessing materiality of mining operations. Companies would be required to provide disclosure regarding, among other things, an individually material property's exploration activity, exploration results, and mineral resources and reserves.

Identify Potential "Qualified Persons" Who Will Provide Supporting Documentation on Which Disclosures of Mineral Resources, Mineral Reserves, and Material Exploration Results Will Be Based, and Who Will Prepare the Technical Report Summaries of Material Mining Properties Filed with the SEC. While many companies already engage experts to evaluate resource and reserves information, companies should analyze their historical engagement agreements and evaluate whether changes may be necessary to address new requirements if the SEC adopts the rules as proposed.

Memorialize a System of Internal Controls Applicable to Individual Mining Properties and Across All Mining Properties, which Include Quality Assurance and Verification Measures Used to Ensure the Reliability of Disclosure of Exploration Results and Estimates of Mineral Resources and Mineral Reserves. The proposed rules call for the disclosure of these internal controls, consistent with CRIRSCO-based disclosure requirements in foreign jurisdictions.


[1] See Release No. 33-10098 (June 16, 2016).

[2] See Release No. 33-6406 (June 4, 1982) [47 FR 25126] (June 10, 1982) and Release No. 33-6949 (July 30, 1992) [57 FR 36442] (August 13, 1992).

[3] "Qualified persons" are defined in the proposed rules as persons who are mineral industry professionals with at least five years of relevant experience in the type of mineralization and type of deposit under consideration, and in the specific type of activity undertaken on behalf of the registrant. In addition, the person must be an eligible member or licensee in good standing of a professional organization recognized within the mining industry as reputable at the time the technical report summary is prepared.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions