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The Ontario Securities Commission

REPEAL AND REPLACEMENT OFNATIONAL INSTRUMENT 43-101

STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS,

FORM 43-101F1 TECHNICAL REPORT, ANDCOMPANION POLICY 43-101CP

Supplement to the OSC Bulletin

April 8, 2011

Volume 34, Issue 14 (Supp-2)

(2011), 34 OSCB

The Ontario Securities Commission administers theSecurities Actof Ontario (R.S.O. 1990, c. S.5) and the

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April 8, 2011 (2011) 34 OSCB (Supp-2)


STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS,FORM 43-101F1 TECHNICAL REPORT, AND

COMPANION POLICY 43-101CP

TABLE OF CONTENTS

CSA Notice of Repeal and Replacement of National Instrument 43-101Standards of Disclosure for Mineral Projects, Form 43-101F1 Technical Report,and Companion Policy 43-101CP.............................................................................................................1

APPENDIX A: Summary of Key Changes to the April 2010 Materials ....................................4

APPENDIX B: List of Commenters..........................................................................................6

APPENDIX C: Summary of Comments and CSA Responses.................................................8

APPENDIX D: Amendments to National Instrument 44-101Short Form Prospectus Distributions ............................................................56

APPENDIX E: Amendments to Form 51-102F1 Managements Discussionand Analysis and Form 51-102F2Annual Information Form ........................57

APPENDIX F: Amendments to National Instrument 45-106 Prospectusand Registration Exemptions ........................................................................58

APPENDIX G: Amendments to National Instrument 45-101 Rights Offerings ......................59

APPENDIX H: Local Information ..........................................................................................60

National Instrument 43-101 Standards of Disclosure for Mineral Projects .............................................61

Form 43-101F1 Technical Report ..........................................................................................................75

Companion Policy 43-101CP to National Instrument 43-101 Standards ofDisclosure for Mineral Projects ..............................................................................................................83

National Instrument 43-101 Standards of Disclosure for Mineral Projects (blacklined) ..........................99

Form 43-101F1 Technical Report(blacklined)......................................................................................115


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April 8, 2011 1 (2011) 34 OSCB (Supp-2)


STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS,FORM 43-101F1 TECHNICAL REPORT, AND

COMPANION POLICY 43-101CP

NOTICE


STANDARDS OF DISCLOSURE FOR MINERAL PROJECTS,FORM 43-101F1 TECHNICAL REPORT, AND COMPANION POLICY 43-101CP

IntroductionWe, the Canadian Securities Administrators (CSA), are adopting new versions of National Instrument 43-101 Standards ofDisclosure for Mineral Projects (the New Instrument), Form 43-101F1 Technical Report(the New Form), and Companion Policy43-101CP (the New Companion Policy) (together, the New Mining Rule).

The New Mining Rule will replace the previous versions of these documents (the Previous Mining Rule), which came into effectin all CSA jurisdictions on December 30, 2005.

Concurrently with this Notice, we are publishing the New Mining Rule, the Consequential Amendments (see below), andblacklines of the New Instrument and the New Form showing all changes from the versions of these documents currently inforce. These documents are also available on the websites of CSA members, including the following:

www.bcsc.bc.ca

www.albertasecurities.com

www.sfsc.gov.sk.ca

www.osc.gov.on.ca

www.lautorite.qc.ca

www.nbsc-cvmnb.ca

In some jurisdictions, Ministerial approvals are required for these changes. Subject to obtaining all necessary approvals, theNew Mining Rule and the Consequential Amendments will come into force onJune 30, 2011.

Substance and Purpose of the New Mining RuleThe changes in the New Mining Rule

eliminate or reduce the scope of certain requirements

provide more flexibility to mining issuers and qualified persons in certain areas

provide more flexibility to accept new foreign professional associations, professional designations, andreporting codes as they arise or evolve

reflect changes that have occurred in the mining industry, and

clarify or correct areas where the Previous Mining Rule was not having the effect we intended


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CSA Notice Supplement to the OSC Bulletin

April 8, 2011 2 (2011) 34 OSCB (Supp-2)

BackgroundWe have been monitoring the Previous Mining Rule since its adoption. In the spring of 2009, CSA members carried out focusgroup discussions with market participants from various sectors, consulted with their advisory committees, and solicited writtencomments concerning a range of issues related to the Previous Mining Rule. We developed proposed changes to the PreviousMining Rule and published them for a 90-day comment period on April 23, 2010 (the April 2010 Materials).

The New Mining Rule reflects our further consideration of these proposed changes in light of the comments we received, theresults of a survey we conducted of the costs of filing technical reports in connection with short form prospectuses, and other

developments during the comment period.

Written CommentsThe comment period expired on July 23, 2010. During the comment period, we received submissions from 50 commenters. Wehave considered these comments and we thank all the commenters. A list of the 50 commenters and a summary of theircomments, together with our responses, are contained in Appendices B and C.

Summary of Changes to the April 2010 MaterialsWe have made some revisions to the April 2010 Materials, including changes of a minor nature or made only for the purposes ofclarification or further streamlining. Appendix A describes the key changes made to the April 2010 Materials. As the changes arenot material, we are not republishing the New Mining Rule for a further comment period.

Consequential AmendmentsWe are also adopting consequential amendments to

National Instrument 44-101 Short Form Prospectus Distributions

Form 51-102F1 Managements Discussion and Analysis

Form 51-102F2Annual Information Form

National Instrument 45-106 Prospectus and Registration Exemptions

National Instrument 45-101 Rights Offerings

(together, the Consequential Amendments).

The Consequential Amendments are contained in Appendices D through G.

Local NoticesCertain jurisdictions are publishing other information required by local securities legislation in Appendix H.

QuestionsIf you have any questions, please refer them to any of the following:

British Columbia Securities CommissionRobert Holland Sheryl ThomsonChief Mining Advisor, Corporate Finance Acting Manager, Legal ServicesTel: (604) 899-6719 Corporate FinanceE-mail: [email protected] Tel: (604) 899-6778

E-mail: [email protected]

Alberta Securities CommissionLanion Beck Anne Marie Landry

Legal Counsel Securities AnalystTel: (403) 355-3884 Tel: (403) 297-7907E-mail: [email protected] E-mail: [email protected]

Saskatchewan Financial Services CommissionIan McIntoshDeputy Director Corporate FinanceTel: (306) 787-5867E-mail: [email protected]


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CSA Notice Supplement to the OSC Bulletin

April 8, 2011 3 (2011) 34 OSCB (Supp-2)

Ontario Securities CommissionCraig Waldie Michael TangSenior Geologist, Corporate Finance Senior Legal CounselTel: (416) 593-8308 Tel: (416) 593-2330E-mail: [email protected] E-mail: [email protected]

James WhyteSenior Geologist, Corporate Finance

Tel: (416) 593-2168E-mail: [email protected]

Autorit des marchs financiersLuc Arsenault Alexandra LeeGeologist Senior Policy AdvisorTel: (514) 395-0337, ext: 4373 Policy and Regulations DepartmentE-mail: [email protected] Tel: (514) 395-0337, ext: 4465

E-mail: [email protected]

New Brunswick Securities CommissionPierre ThibodeauSenior Securities AnalystTel: (506) 643-7751E-mail: [email protected]

April 8, 2011


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Appendix A: Summary of Key Changes to the April 2010 Materials Supplement to the OSC Bulletin

April 8, 2011 4 (2011) 34 OSCB (Supp-2)

APPENDIX A

SUMMARY OF KEY CHANGES TO THE APRIL 2010 MATERIALS

The New InstrumentPart 1 Definitions and Interpretation

Instead of defining the terms preliminary feasibility study, pre-feasibility study and feasibility study in theInstrument, we incorporated by reference, in new section 1.4, the definitions of those terms under the CIMDefinition Standards, as amended.

In the definition of mineral project, we added the words a similar interest to capture metals streamingagreements that are similar to royalty interests.

We revised the proposed definition of qualified person as follows:

o We applied the requirement for a university degree or equivalent accreditation to the qualifiedperson, rather than to the membership designation in a foreign professional association.

o We applied the requirement for continuing professional development to the professional association,rather than to the membership designation in a foreign professional association.

o With respect to membership designations in a foreign professional association that do not require afavourable confidential peer evaluation, we changed the alternative criteria from at least ten years ofpost-degree practical experience to demonstrated expertise. We also reduced the minimum peerrecommendations from three to two.

Part 2 Requirements Applicable to All Disclosure

We clarified in paragraph 2.3(1)(c) that the restriction applies to the disclosure of gross value, not quantity, ofmetal or mineral in a deposit.

Part 4 Obligation to File a Technical Report

In paragraph 4.2(1)(b), we restricted application of the technical report trigger for a preliminary short formprospectus to situations where the preliminary short form prospectus discloses for the first time mineralresources, mineral reserves, or the results of a preliminary economic assessment that constitute a materialchange in relation to the issuer, or a change in this information, if the change constitutes a material change inrelation to the issuer. This is Case 3 as described in the April 2010 Materials.

We revised the 45-day exemption in subsection 4.2(5) to clarify that, if the disclosure is also included in apreliminary short form prospectus, the technical report must be filed by the earlier of the date of filing thepreliminary short form prospectus and 45 days after the first time disclosure.

We revised the new six-month exemption in subsection 4.2(7) to clarify that, if the disclosure is also containedin a preliminary short form prospectus, the technical report must be filed by the earlier of the date of filing thepreliminary short form prospectus and 180 days after the first time disclosure.

Part 7 Use of Foreign Code

In subsection 7.1(2), we re-instated a modified version of the reconciliation requirement in the Previous Mining

Rule. An issuer must provide a reconciliation of any material differences between the mineral resource andmineral reserve categories used and the categories under the CIM Definition Standards.

Part 9 Exemptions

In section 9.2, we added the words or similar interest to capture metals streaming agreements.

We amended subparagraph 9.2(1)(a)(i) to include the requirement that the owner or operator be a reportingissuer, as reporting issuers are subject to more rigorous disclosure requirements.


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Appendix B: List of Commenters Supplement to the OSC Bulletin

April 8, 2011 6 (2011) 34 OSCB (Supp-2)

APPENDIX B

LIST OF COMMENTERS

1. April 29, 2009 Canadian Council of Professional Geoscientists

2. May 10, 2010 Wardrop

3. May 19, 2010 Canadian Institute of Mining, Metallurgy and Petroleum Special Committee onValuation of Mineral Properties

4. June 2, 2010 SRK Consulting (UK) Limited

5. June 10, 2010 Loewen, Ondaatje, McCutcheon Limited

6. June 28, 2010 Stantec

7. June 29, 2010 APEGM

8. July 6, 2010 John T. Postle

9. July 8, 2010 Scott Wilson

10. July 9, 2010 Fonds de solidarit FTQ and translation

11. July 9, 2010 Northwest Territories and Nunavut Association of Professional Engineers andGeoscientists

12. July 12, 2010 Neil Gow

13. July 15, 2010 Geoscientists Nova Scotia

14. July 16, 2010 Ted Eggleston

15. July 16, 2010 Micon International Limited

16. July 16, 2010 Canadian Institute of Mining, Metallurgy and Petroleum

17. July 19, 2010 Capstone Mining Corp

18. July 19, 2010 Goldcorp

19. July 19, 2010 and

July 23, 2010 addendum

Fasken Martineau

20. July 20, 2010 Engineers Geoscientists New Brunswick

21. July 20, 2010 Ordre des geologues du Quebec and translation

22. July 20, 2010 Geoscientists Canada

23. July 21, 2010 Fred Barnard

24. July 21, 2010 Association of Professional Geoscientists of Ontario

25. July 22, 2010 Coffey Mining


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Appendix B: List of Commenters Supplement to the OSC Bulletin

April 8, 2011 7 (2011) 34 OSCB (Supp-2)

26. July 22, 2010 Khalid Elhaj

27. July 22, 2010 TD Asset Management Inc.

28. July 22, 2010 Silver Wheaton

29. July 22, 2010 Stephen Semeniuk

30. July 23, 2010 Prospectors & Developers Association of Canada

31. July 23, 2010 TMX Group Inc.

32. July 23, 2010 VENMYN

33. July 23, 2010 Bennett Jones

34. July 23, 2010 Ausenco Minerals & Metals

35. July 23, 2010 Cameco Corporation

36. July 23, 2010 AMEC Americas Limited

37. July 23, 2010 Cassels Brock

38. July 23, 2010 Osler Hoskin & Harcourt LLP

39. July 23, 2010 Golder Associates

40. July 23, 2010 Canadian Coalition for Good Governance

41. July 23, 2010 De Beers Canada Inc.

42. July 23, 2010 Endeavour Financial

43. July 23, 2010 Borden Ladner Gervais LLP

44. July 23, 2010 Hunter Dickinson

45. July 23, 2010 New Gold

46. July 23, 2010 Sandstorm Resources Ltd.

47. July 23, 2010 Association of Professional Engineers & Geoscientists of Saskatchewan

48. July 26, 2010 Pincock Allen & Holt

49. July 30, 2010 Davies, Ward, Phillips and Vineberg

50. August 8, 2010 Australian Joint Ore Reserves Committee (JORC)


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Appendix C: Summary of Comments and CSA Responses Supplement to the OSC Bulletin

April 8, 2011 8 (2011) 34 OSCB (Supp-2)

APPENDIX C

SUMMARY OF COMMENTS AND CSA RESPONSES

Proposed National Instrument 43-101 Standards of Disclosure for Mineral Projects,Form 43-101F1 Technical Reportand Companion Policy 43-101CP (together, NI 43-101)

and related consequential amendments

Table of Contents

A. General Comments1. General support for the proposed amendments to NI 43-101

B. Proposed National Instrument 43-101 (Instrument)1. Part 1 Definitions and Interpretation2. Part 2 Requirements Applicable to All Disclosure3. Part 3 Additional Requirements for Written Disclosure4. Part 4 Obligation to File a Technical Report5. Part 5 Author of Technical Report6. Part 6 Preparation of Technical Report7. Part 7 Use of Foreign Code8. Part 8 Certificates and Consents of Qualified Persons for Technical Reports

9. Part 9 Exemptions10. Other general comments

C. Proposed Form 43-101F1 (Form)1. General comments regarding the Form2. Specific comments regarding the Form

D. Proposed Companion Policy 43-101CP (Companion Policy)1. General comments regarding the Companion Policy2. Specific comments regarding the Companion Policy

E. Proposed Consequential Amendments1. Amendment to National Instrument 44-101Short Form Prospectus Distributions (NI 44-101)2. Amendment to Form 51-102F1 Managements Discussion and Analysis (MD&A)

F. Specific Questions Short Form Prospectus Trigger1. General responses to questions on short form prospectus trigger2. Responses to specific questions

(a) Question #1(b) Question #2(c) Question #3(d) Question #4

G. Specific Questions New Exemption for Property Acquisition with Current Technical Report1. Question #5

H. Specific Questions Existing Exemption from Site Visit Requirement1. Question #6

I. General Comments Not Specifically Related to Proposals

1. Disclosure requirements2. Technical report review


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# Theme Comment Responses

have concerns if the phrase generallyaccepted in a foreign jurisdiction includesRussian-based codes. In the commentersexperience, these codes are seriously atodds with CIM standards and aremisleading to investors.

A commenter notes that the definitionincludes SEC Industry Guide 7 but this ismissing from the related section in theCompanion Policy.

One commenter that is an exchange says itwill only accept foreign codes expresslyaccepted by CSA, and suggests that CSAmaintain a list of currently acceptableforeign codes.

A commenter recommends that CSAinclude in this definition The SME Guidefor Reporting Exploration Results, MineralResources, and Mineral Reserves, whichis being used by major mining companiesin the USA and SME is lobbying the SEC toadopt. The SME code should berecognized because SME membersparticipate on CRIRSCO and have workedto improve technical disclosure standardsand to develop a code in the USA that is

consistent with CIM definitions.

based codes because they are not consistent withCIM standards, and therefore would not satisfy thetest in the definition.

We included SEC Industry Guide 7 as anacceptable foreign code because of the largenumber of cross-border issuers in Canada. We didnot refer to it in the guidance because it does notuse mineral resource and reserve categoriesconsistent with other acceptable foreign codes.

The codes specifically identified in the definition arethe codes that staff think currently satisfy thedefinition. We plan to publish CSA Staff Notices ona timely basis identifying the additional codes thatwe think satisfy the definition of acceptable foreigncode, based on our own research or submissions

from market participants made in accordance withsubsection 1.1(1) of the Companion Policy.

We understand that mining companies in the USAthat elect to use the SME code are still required tocomply with SEC Industry Guide 7. As a result, wedo not think the SME code currently satisfies thetest that the foreign code must be generallyaccepted in a foreign jurisdiction. We will continueto monitor the situation.

Definition ofadvancedproperty

Two commenters express concerns aboutincluding a property that has been thesubject of only a preliminary economicassessment because these early stageassessments are unreliable and it is notappropriate to describe the property asadvanced.

A commenter notes that not all pre-feasibility or feasibility studies result in thedeclaration of mineral reserves, andtherefore these properties would not qualify

as advanced properties.

A commenter thinks the paragraph relatingto reserves should simply require theproperty to have reserves, becausereserves by definition must beeconomically mineable as demonstrated byat least a preliminary feasibility study.

We do not share these concerns. The termadvanced property is intentionally broad as itssole use under the Instrument is to identify ageneral category of properties (those with aneconomic analysis) that are subject to additionaldisclosure requirements under the Form.

We agree, and have amended the definition toinclude this scenario.

We agree, and have amended the definitionaccordingly.


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Definition ofadvancedproperty andother propertycategories

A commenter notes the proposed definitionof advanced property does not specificallyinclude development property orproducing issuer, so technical reports fordevelopment and producing propertieswould include unnecessary disclosure of

drill results in Item 10 (c) of the Form.

The commenter suggests defining a newcategory of mineral project possibly calledDeposit Delineation Property to captureproperties where drilling is proposed orwhich have mineral resources but noeconomic analysis. This commenter alsothinks it is not clear which term to use todescribe small scale producing propertiesthat do not meet the producing issuerdefinition, such as projects derivingrevenue from pilot plants.

We think that advanced property is sufficientlybroad to capture development and producingproperties. The proposed amended definition,together with the proposed elimination of thedefinition of development property, should clarifythis.

We have not adopted these suggestions, as it is notnecessary for purposes of the Instrument or Formto provide definitions for all stages of a mineralproject. We only include those definitions that arenecessary to differentiate properties for purposes ofapplication of the rule.

Definition ofCertificationCode

A commenter expressly supports therecognition of Chiles Certification Code inthe Instrument.

Definition ofdevelopmentproperty

A commenter suggests this definition is notnecessary as it is used only once, in theInstruction to Item 26 of Form 43-101F1,where it arguably does not need a precisedefinition.

We agree, and have deleted this definition. We notethough that the definition is also used in paragraphs(b) and (c) of the Instructions to Illustrations, andhave amended the wording of these referencesaccordingly.

Definition ofeffective date

A commenter expressly supports this newdefinition and distinguishing it from the dateof signature.

Another commenter finds the currentwording confusing as it is unclear how thedate would be selected, who would selectit, and where it would be stated. Theypropose amending the definition to the dateof the technical report or the date specifiedin the report by the qualified person.

We do not think it is necessary to amend thedefinition because paragraph 8.1(2)(c) of theInstrument and the Date and Signature Pagesection of the Form specify these details. However,we have added guidance to the Companion Policyto clarify the meaning and purpose of effectivedate.

Definition offeasibility study

A commenter proposes that issuers shouldnot be permitted to add descriptions to thedefined term such as bankable, which arepotentially misleading. Consider providingguidance in the Companion Policy.

We do not think such descriptions are necessarilymisleading because the definition of feasibility studyrefers to a study acceptable to a financial institution.

Definition ofhistoricalestimate

Seven commenters expressly support theproposed changes to this definition

One of these commenters notes howeverthat very old and recent estimates will beaccorded equal status.

Our decision to treat all historical estimatesconsistently is based on industry feedback. Wethink the requirements of section 2.4 of theInstrument should mitigate any potential concerns.


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Another suggests that, if the historicalestimate is post-2001, the issuer shouldname the qualified person responsible forthe estimate as well as the system theyused for classifying the resources.

A commenter proposes revising thisdefinition to include estimates previouslymade by the issuer itself. Sometimes aproperty is in inventory but dormant andhistorical estimates, although not current,are important information.

We think the requirement in section 3.1 of theInstrument for the issuer to name a qualified personis sufficient in this case. We agree that theclassifying system would be useful information. Wehave added guidance in the Companion Policy thatthe issuer can comply with paragraph 2.4(d) of the

Instrument by identifying the acceptable foreigncode used, if applicable.

We have not adopted this suggestion. This situationwould only arise for estimates that have beendormant since at least 2001, which we think wouldbe relatively rare. In most cases, the issuer willhave all the data necessary to upgrade the estimateto current mineral resources or reserves.

Definition ofpreliminaryeconomic

assessment

Change to permit preliminary assessmentafter completion of a pre-feasibility orfeasibility study

Ten commenters expressly support thischange.

A commenter thinks this change ispotentially confusing as assessments doneafter a feasibility study are based on muchmore accurate information concerning thedeposit, metallurgy and costs of the projectthan an early stage study.

Another commenter supports allowing anissuer to disclose some form ofassessment when new materialinformation becomes available after a pre-

feasibility or feasibility study, but does notthink these assessments should bedescribed as preliminary.

Addition of word economicFour commenters disagree with theproposed change in the defined term frompreliminary assessment to preliminaryeconomicassessment.

Their reasons include: It could imply a level of analysis

that is not supported by an earlystage study.

The change shifts the focus frompreliminary where it should be,to economic.

OtherA commenter finds the proposed changesin this definition confusing because therelated guidance says preliminaryeconomic assessments are commonlyreferred to as scoping studies - this term

We do not see this as a significant concernbecause these assessments include inferredmineral resources that have a low confidence leveland any economic analysis should be consideredpreliminary.

See our response to the comment above.

We think the word economic adds accuracy to thedefinition because these studies include aneconomic analysis and their purpose is to assessthe potential economic viability of the deposit.Disclosure of the results of these studies mustinclude required cautionary language to ensure thedisclosure is not misleading.

We understand that scoping study is an informalindustry term that has essentially the samemeaning as a preliminary economic assessment.However, we are not aware of any industry-accepted published standard for scoping studiesand acknowledge there might be some confusion


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implicitly means a study done before a pre-feasibility or feasibility study. Thecommenter also suggested that use ofinferred resources in preliminary economicassessments over-rides the CIMdefinitions, which exclude inferred

resources from feasibility or othereconomic studies.

The commenter suggests splitting thisdefinition into two: (i) a preliminaryeconomic assessment/scoping study; and(ii) an economic assessment of inferredresources that may be included in a life ofmine plan but not in a pre-feasibility orfeasibility study.

Another commenter thinks the proposeddefinition is too broad because it would

include a lesser study than a scopingstudy. Leaving the definition as proposedwould permit most issuers to call theirproperties advanced properties and relyon the exemptions for advancedproperties under NI 43-101. The definitionshould require that the study achieve atleast the standard for a scoping study.

around the use of the two terms. We have amendedthe guidance in the Companion Policy to clarify thatpreliminary economic assessments could includescoping studies but do not necessarily have thesame meaning.

See our response to the comment above. Thedefinition of preliminary economic assessment isnot meant to capture life of mine plans as they aretypically used to update mineral reserves for miningpurposes. We do not think a life of mine plan is aneconomic analysis of the potential viability ofmineral resources.

See our response to the comment above. We alsonote that the only exemption for advanced

properties is in Item 10(c) of the Form and they areotherwise subject to additional disclosurerequirements under Items 15 to 22.

Definition ofproducing issuer

Two commenters think there is a loopholein the definition because it only specifies arevenue test and not a production test. Thismeans a company could cease production,but still be exempt from the requirement to

provide an independent technical report.The only issuers that should be able to relyon this exemption are issuers that arecurrently producing.

A commenter suggests including in part (b)of the definition gross revenues derivedfrom mining operations on propertiesacquired by the issuer in the last threeyears. An issuer should be able to includein its calculations revenues of an acquiredproperty. Employees of a producing minecustomarily become employees of the newowner so the new owner will have the

internal expertise to prepare the technicalreports.

The revenue test, while not perfect, provides asimple and verifiable test that captures mostproduction situations. Moving to a production testwould be difficult and complex due to problems withdefining production. Although we acknowledge the

concern, we do not think it is significant enough tojustify a more complicated and untested definition.

We have not adopted this suggestion. We think weshould consider these situations on a case by casebasis. Also, in our experience, these situations donot occur frequently.

Definition ofprofessionalassociation

Three commenters expressly support theproposed changes to this definition andmoving to an objective test. Onecommenter thinks the broader definition willprovide issuers with more flexibility, andencourages CSA to maintain an updated


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list of acceptable foreign associations inAppendix A to the Companion Policy.

A commenter generally supports theproposed broader definition, but wouldhave concerns about weaker jurisdictions

opening the potential for unqualifiedpersons to act as qualified persons underthe Instrument.

One commenter believes that NI 43-101should provide a mechanism for a personto apply for qualified person status basedon their qualifications, experience, andpeer recommendations, even though theperson is not a member of a professionalassociation.

Subparagraph (a)(ii) foreign association

One commenter that is an exchange saysthey will assume the only acceptableforeign qualified persons are those that aremembers of an association listed inAppendix A to the Companion Policy. Thecommenter has concerns about CSAsability to update the list readily andsuggests maintaining a link to a currentapproved list of foreign associations. CSAshould also consider how it will notify thepublic and other regulators of updates tothe list.

Paragraph (e) disciplinary powersA commenter that is a Canadian

professional association proposesremoving paragraph (e) of the definitionbecause the association does not havelegal authority to apply disciplinary powersoutside the geographic limits of theprovince.

A commenter notes the US professionalengineering bodies are not included in thelist of approved foreign associations of theAustralian Stock Exchange. Thecommenter understands the US stateboards did not apply because it is unlikelythey would have the power to disciplinemembers for failure to comply with theJORC Code. The commenter imagines thesame issue would arise under NI 43-101and questions the inclusion of the USprofessional engineering bodies inAppendix A of the Companion Policy.

We do not think the new objective test lowers thecurrent standard. Applying the new test results in alist of associations that is substantially similar to the

list under the current rule. The new test simplyprovides flexibility so that we can more easilyupdate the list in Appendix A, when appropriate.

Qualified person is not a professional designation ora license to practice. The securities regulatoryauthorities do not have the mandate or resources todetermine if an individual is qualified in a givensituation. Professional associations are bestequipped to provide ongoing registration, oversightand discipline of qualified persons.

The test for determining whether a foreign

association qualifies for purposes of the Instrumentis contained in the definition in the rule. Appendix Arepresents our views regarding which associationscurrently satisfy the test in the definition. We plan toupdate Appendix A periodically to identify additionalassociations that we think satisfy the definition ofprofessional association, based on our ownresearch or submissions from issuers made inaccordance with subsection 1.1(5) of theCompanion Policy.

We understand that other Canadian professionalassociations are not subject to a similar restriction.

We think it is essential that a professionalassociation be able to apply disciplinary powers tomembers that reside or practice in foreignjurisdictions because of the international nature ofthe mining industry.

We do not have any information indicating this is anissue. However, we question whether mostprofessional associations generally would considerit within their mandates to discipline a member forfailure to comply with a reporting code in a foreignjurisdiction.


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Definition ofqualified person

Three commenters expressly support theproposed changes to this definition andmoving to an objective test.

Paragraphs (a), (b) and (c) experiencerequirements

A commenter notes these paragraphsimpose a different experience requirementthan for all other foreign jurisdictionsreporting under the various CRIRSCOstandards. The CRIRSCO standardsrequire at least five years experiencerelevant to the situation underconsideration, while the Canadian definitionrequires only five years of generalexperience. The commenter recommendsthat CSA align its definition withinternational standards.

Paragraph (d) good standing withprofessional association

Eight commenters that are Canadianprofessional associations think theInstrument should require any qualifiedperson acting for an issuer in Canada to beregistered, as well as in good standing,with a Canadian professional association.Such a requirement would align theInstrument with provincial/territorial lawsregarding registration of geoscientists.

These commenters also think theInstrument should require a qualifiedperson evaluating a property in Canada tobe licensed in the jurisdiction where thatproperty is located. One of thesecommenters believes that currentregistration processes across Canada andmutual recognition agreements undernegotiation would reduce the regulatoryonus for foreign qualified persons acting forCanadian issuers.

Three of these commenters recognize thecomplexities of imposing a registrationrequirement on foreign qualified personswho are reporting on properties locatedoutside Canada, and feel that the proposedchanges to NI 43-101 go part way toaddressing the risks and concerns to theinvesting public. However, thesecommenters believe imposing a registrationrequirement is still desirable for investorprotection as legal process and disciplinaryaction would be easier to pursue.

We have not experienced any problems with thiscomponent of the definition and therefore do not

propose to amend it. We acknowledge thatparagraphs (a), (b) and (c) taken together aresomewhat broader than the Competent Persondefinition for certain foreign codes. However, wethink paragraph (c) is narrower in scope than thecorresponding part of the Competent Persondefinition because it requires experience relevant tothe specific mineral project and specific technicalreport under consideration.

We think that the requirement to be in goodstanding with a professional association necessarily

includes satisfying any applicable registration orlicensing requirements. That is how we have alwaysinterpreted the good standing requirement. Wetherefore do not think it is necessary to referspecifically to registration in the definition. We havehowever added guidance to the Companion Policyto clarify our interpretation of the good standingrequirement. Another factor influencing our decisionis that specifically referring to registration in thedefinition of qualified person would necessitateother amendments to the definition as some foreignassociations do not have a registration requirement,and other foreign associations might have a similarrequirement but label it differently.

The requirement for a Canadian qualified person tobe licensed in the jurisdiction where the property islocated is already required under other Canadianlegislation. Adding such a requirement to NI 43-101would be duplicative and also, in our view, beyondour mandate. We think it is the responsibility of thequalified person and the relevant professionalassociation to ensure that all relevant licensingrequirements are met.

Please see our responses to the comments above.


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Subparagraph (e)(ii)A peer evaluationA commenter requests that CSA specifyhow many persons constitute a peerevaluation.

Subparagraph (e)(ii)B post-degreeexperienceEight commenters do not support therequirement that a foreign qualified personhave at least ten years experience.

Their reasons include: A Canadian qualified person is only

required to have five years experience. NI 43-101 should not require higher

experience levels than specified by theforeign codes it recognizes.

It is unnecessary and inconsistent with

the experience requirements inparagraphs (b) and (c) of the definition.

Australian professional associationsThree commenters have concerns aboutthe impact of the proposed changes to thisdefinition on Members of the Australianprofessional associations, AusIMM andAIG.

One of these commenters is concernedthat the proposed changes to the definitionwill disenfranchise a large group ofengineers and geoscientists who havebeen Members (Fellows are not affected)of the AusIMM and AIG for many years,who have acted or are currently acting asqualified persons. The commenter isparticularly concerned about therequirements in (e)(i) [position ofresponsibility] and (e)(ii)(B) [at least tenyears post-degree experience in the field ofmineral exploration or mining], which arenot requirements of Canadian professionalassociations.

Another commenter notes that Members ofAusIMM will no longer qualify even though

AusIMM satisfies all the criteria for aprofessional association except that it doesnot require ten years post-graduateexperience, while a Registered Member ofSME will qualify even though SME onlyrequires five years of post-graduateexperience. The commenter proposesapplying the ten-year experiencerequirement to qualified person ratherthan professional association, which

This is a description of criteria applicable to amembership designation in a foreign professionalassociation. As such, we do not think it isappropriate for us to specify the number of personsrequired for a peer evaluation. This will varydepending on the association.

This provision was not meant to require a foreignqualified person to have at least ten yearsexperience. This provision merely describes afeature of a membership designation that is analternative to the confidential peer evaluation inwhat is now subparagraph (e)(ii)(A). We providedthe alternative test to include certain professionaldesignations that may not require a confidentialpeer review but compensate for this by having morestringent experience requirements. To clarify ourintention and allow more flexibility, we havereplaced the ten years experience threshold withthe concept of demonstrated expertise, and

provided guidance on this in the Companion Policy.

As mentioned above, we have replaced the tenyears experience threshold with a test ofdemonstrated expertise. We have providedguidance in the Companion Policy regarding thistest. We have added AIG Members to Appendix Abased on this test. We think that those Members ofAusIMM who satisfy the demonstrated expertisetest and other aspects of the definition of qualifiedperson in most cases should be able to upgradetheir membership designation in AusIMM to Fellow,or obtain the Chartered Professional (CP) title.



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would allow individuals with an appropriatelevel of experience to act as qualifiedpersons.

Another commenter notes that theexclusion of Members is not consistent with

the Competent Person definition in theJORC Code. That definition excludesAssociates, Graduates, and Students, butdoes not exclude Members. Only 16% ofthe AusIMM membership are Fellows,while over 62% are Members. Many of theMembers otherwise would meet the NI 43-101 definition but have not upgraded theirmembership to Fellow. The requirementsfor Fellow in AIG go far beyond the statedrequirements in NI 43-101.

This commenter also notes that theAusIMM designation of CharteredProfessional (CP) in Appendix A is not a

membership class as such.

OtherA commenter believes that, to serveinvestors and clients interests, anindividual acting as a qualified person for acompany should not be an insider, director,or promoter of other mining companies as itcompromises the qualified personsindependence and diverts the qualifiedpersons time and attention.


We have amended Appendix A accordingly.

Section 1.5 of the Instrument sets out the test forindependence, which we think is sufficiently broadto protect investors and clients in cases where anindependent technical report is required. We thinkto go further than this would be unduly restrictive.

Definition ofspecified

exchange

Three commenters suggest moving the listof specified exchanges to the Companion

Policy or including generic language thatwould permit other foreign exchanges to bespecified, as international markets developover time. One commenter suggests thatCSA consider adding the Mexican,Santiago, and Lima exchanges to the list.Another commenter asks CSA to considerproviding a link to a current list of specifiedexchanges.

We do not think it would be appropriate to includegeneric language in this particular definition. The

exemptions for producing issuers that trade on aspecified exchange are intentionally restricted tosituations where the exchange, as well as requiringmining issuers to disclose under an acceptableforeign code, also provides satisfactory oversightand enforcement of the disclosure standards. Thisaspect can only be determined on a case by casereview. With respect to the exchanges currentlyspecified, we were able to obtain sufficientinformation indicating that they satisfy these criteria.We also note that these exemptions extend tocross-listings, as well as primary listings, on aspecified exchange. We expect that manyproducing issuers would have at least a secondarylisting on one of the exchanges currently listed.

Proposed newdefinition filed

A commenter suggests adding a definitionof filed to mean filing on SEDAR.

CSA instruments generally do not include adefinition of filed because the definition and filingrequirements are set out in the SEDAR rule,National Instrument 13-101. That rule also includescertain exemptions and as a result, not all issuersare required to file on SEDAR.


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Proposed newdefinition economicanalysis

A commenter recommends adding adefinition of economic analysis as thereappear to be inconsistencies betweenForm 43-101F1 and the Companion Policy.Form 43-101F1 separates Item 21 Capitaland Operating Costs, from Item 22

Economic Analysis, thereby suggestingthat capital and operating costs do notconstitute an economic analysis. However,the guidance on the meaning ofpreliminary economic assessment saysthat economic analyses include capital andoperating costs.

Alternatively, the commenter suggestsreconciling these inconsistencies throughadditional guidance in the CompanionPolicy.

We do not agree that there is an inconsistencybetween the Form and the Companion Policy. Item21 focuses specifically on capital and operatingcosts, while Item 22 is a much broader item thatspecifies the content of an economic analysisincluded in a technical report. Item 22 Economic

Analysis includes capital and operating costs as acomponent in paragraph (e). This is consistent withthe guidance in the Companion Policy.

We do not think additional guidance is necessary.

1.2 and 1.3

definitions ofmineral resourceand mineralreserve

A commenter prefers the current wording of

these sections to the proposed wording, asit will allow CIM to amend these definitionswithout impacting NI 43-101.

Another commenter does not think theproposed additional wording improves theclarity of the sections.

A commenter has concerns about the CIMDefinition Standards for mineral resourcesbecoming too restrictive, in particular CIMslatest recommendation to show resourcesat only one cut-off grade. It is appropriateto recommend a single cut-off grade but tounderstand a deposits potential it is also

necessary to know the effect of changes inprice on a range of grades.

We do not think the changed wording affects CIMs

ability to amend the definitions. The words asamended preserve this ability.

We have removed references to the adoption dateof the original CIM definitions.

While NI 43-101 requires the issuer to identify thebase case mineral resource, it does not prohibitdisclosing a range of estimates using different cut-off grades to show grade or price sensitivity.

2. Part 2 Requirements Applicable to All Disclosure

2.1(b) approvedby a qualifiedperson

Five commenters expressly supportallowing scientific and technical informationto be approved by a qualified person, as analternative to prepared by or under thesupervision of a qualified person.

One commenter that is an exchangesuggests reconciling the option that

information may be prepared by or underthe supervision of a qualified person withthe more stringent exchange requirement,which requires the qualified person to haveread and approved the disclosure.

The current Instrument does not require a qualifiedperson to approve the issuers disclosure in all

cases and we do not think it would be appropriateto impose this requirement. We provided the optionfor the qualified person to approve the disclosure tocover situations where the issuer might not know orhave access to the qualified person who preparedthe information.

2.2(c) inferredmineral resources

Two commenters recommend that CSAremove the restriction against adding

While we did consider this option, we receivedfeedback from industry organizations, other


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inferred mineral resources to othercategories of resources.

Their reasons include: This particular rule is impractical

to apply, generally ignored by

industry, and does not addcredibility to the Canadian capitalmarkets.

Other major mining jurisdictionsdo not have a similar rule so largecompanies in foreign jurisdictionsuse inferred resources ineconomic analyses. This putssmall Canadian companies at adisadvantage.

NI 43-101 already providessufficient protection to the marketby requiring disclosure of thetonnes and grades of eachcategory of mineral resources.

Measured and indicatedresources do not have 100%certainty and the level ofconfidence in inferred resourcesvaries, even in a bulk tonnagedeposit.

regulators, and our mining advisory groupsindicating that this is an important requirement andremoving it would not align with industry bestpractices.

2.3(1) restricteddisclosure

Three commenters expressly support thenew restrictions against disclosing grosscontained metal values, and metalequivalent grades unless individual metalgrades are also disclosed.

One commenter does not support the new

restrictions because metal equivalents andgross metal values are useful forcomparing the results between drill holesand in presenting results for polymetallicresources. They are not misleading ifappropriate back-up information isprovided, and should be allowed as long asthe grade and metal price of each elementis clearly stated.

This commenter also thinks a thorough andsystematic assessment of a deposit isusually achieved only at the advancedexploration stage. For earlier stageproperties, it is less misleading to use astated recovery of 100%, with a caveat thatrecoveries will change subject to finalmetallurgical testwork, than to userecoveries based on ongoing andincomplete metallurgical testwork.

Subsection 2.3(1) does allow issuers to disclose

metal equivalent grades provided they also includethe individual metal grades that comprise theequivalent grade. We disagree with the commenterregarding the disclosure of gross metal values. Wethink disclosure of such values is misleadingbecause it is often a large number that does nottake into consideration the potential costs,recoveries, or other factors relating to the extractionand recovery of the metals. Therefore, we think thatthe risk of this type of disclosure being misleadinggenerally outweighs any benefit it might provide tothe market.

The current restriction does not require issuers toinclude assumed recoveries. Therefore, we do notthink the commenters concern about the restrictionfor metal equivalent disclosure is warranted.


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Paragraph (c) gross contained metalOther commenters said the following aboutparagraph (c):

It is unclear if the restriction isagainst disclosing metal value or

contained metal value. Thecommenter suggests removingthe word contained.

It is confusing when read withparagraph (d).

The language should be clearerthat it captures only grosscontained metal or mineral valueand not total pounds, ounces, orkarats contained in a deposit.

Clarify whether the restrictionapplies to the quantity (in weight)of contained metal or minerals, orthe value (in currency) of thecontained metal or minerals. If the

restriction is against disclosing theamount of contained metal orminerals, this would conflict withstandard practice for internationalissuers to disclose a depositscontained metal or minerals.

Paragraph (d) metal equivalent gradeFour commenters recommend expandingparagraph (d) to require disclosure of otherrelevant factors such as commodity price,plant recovery, and smelter paymentassumptions, to align this paragraph withCIM Best Practice Guidelines or Item 19(m)of current Form 43-101F1.

One commenter thinks an issuer should beable to rely on the exemption in section 3.5of the Instrument if this information waspreviously disclosed.

A commenter asks whether paragraph (d)will apply to disclosure made prior toimplementation of the new Instrument. Itwould be helpful to have a grandfather

provision for old technical reports, or atransitional time period.

For greater clarity, we have removed the wordcontained. We have also added guidance in the

Companion Policy to explain what we mean bygross metal or mineral value.

Our intention is to restrict the disclosure of grossmonetary value, not the quantity, of metals orminerals, the latter of which is permitted underparagraph 2.2(d) of the Instrument. For greaterclarity, we have slightly revised the wording of this

paragraph.

Because subsection 2.3(1) imposes restrictions thatapply to all disclosure, we think it is appropriate toinclude only the minimum requirements we thinkare necessary to prevent misleading disclosure, thisbeing the individual metal grades. The requirementin the technical report applies only to mineralresource and mineral reserve estimates (Items14(c) and 15(c) of the Form). We think it isappropriate to require this additional disclosure inthe technical report because it is a detailed,supporting document.

We have not adopted this suggestion. We think thedisclosure of metal or mineral equivalent gradeshas the potential to be misleading without thecontext provided by the additional detail.

Item 19(m) of the current technical report formrequires this disclosure so this provision does notimpose a new requirement for technical reports.Rather, it is a clarification that conforms the

Instrument to the Form and our current practicalguidance.

2.3(2) exploration targets

A commenter expressly supports theproposed changes to this section.

Another commenter supports the proposedchanges but thinks the section shouldrequire the cautionary language to beproximate to the disclosure, as well as of

In subsection 2.3(6) of the Companion Policy, weindicate that we interpret the equal prominencerequirement to include proximity.


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equal prominence.

2.3(3) disclosureof preliminaryeconomic

assessments

Two commenters expressly support thefact that NI 43-101 allows preliminaryassessments to include inferred resources.

One commenter expressly supports theproposed changes to this section and thedefinition of preliminary economicassessment as they will allow issuers todisclose the full potential of their assetswithin reasonable parameters and withappropriate cautionary language.

A commenter thinks it is unclear why anissuer would compile a preliminaryeconomic assessment on the results ofany pre-feasibility or feasibility studyreferred to in paragraph (c). If the intentionis to provide for economic analyses of the

potential viability of inferred resources, thisshould be explicitly stated.

We understand there are situations where an issuermight want to prepare a preliminary economicassessment after completion of a pre-feasibility orfeasibility study. In these situations, paragraph (c)requires the issuer to disclose the impact of thepreliminary economic assessment on the results of

the pre-feasibility or feasibility study. We haveprovided guidance on paragraph (c), which we havenow moved to subsection 2.3(4) of the CompanionPolicy.

2.4 historicalestimates

A commenter says the proposed changesappear to allow use of a historicalestimate in an economic analysis, andsuggests adding a prohibition against this.

A commenter thinks using the originalterminology is potentially confusing doesit mean the terminology in a technicalreport prepared under the previous

Instrument, or the terminology in thedocument containing the historicalestimate? The commenter suggestsdeleting the phrase.

A commenter recommends that CSA deleteparagraph (f) as it could result inmisleading statements. Historical estimatesfrequently do not have sufficientdocumentation for an issuer to assess whatneeds to be done to upgrade or verify theestimate. Issuers would have to predictwhat success they will have with additionaldrilling, etc., which could give the historical

estimate unwarranted credibility.Alternatively, compliance with paragraph (f)should be necessary only if the informationis known to a reasonable level ofconfidence. The commenter also requestsadditional guidance on what is expected tocomply with this requirement.

The Instrument already contains this prohibition inparagraph 2.3(1)(b).

Although we made a drafting change in the newInstrument, the meaning of this requirement has notchanged. Therefore, the terminology used in thetechnical report should be the same as the

terminology of the historical estimate. We have notremoved this requirement because we think it couldbe misleading to convert historical categories toequivalent current resource categories withoutverifying the estimate meets current definitions.

We do not share the commenters concern. Thepresence or lack of documentation will be animportant factor in determining what the issuer willneed to do to verify or upgrade the historicalestimate. We do not see this as an impediment tothe issuer complying with paragraph (f). We thinkthe qualified person is in the best position todetermine what additional work is necessary ineach case.


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3. Part 3 Additional Requirements for Written Disclosure

3.1 name ofqualified person

Three commenters expressly support newparagraph (b) which would allow an issuerto name the qualified person who approvedthe disclosure.

A commenter generally supports theproposed streamlining, but has concernsabout the potential coercion of qualifiedpersons employed by consulting firms toapprove disclosure when the originalqualified person is not available. Thecommenter proposes that new paragraph(b) apply only to qualified personsemployed by the issuer.

The purpose of paragraph (b) is to provide issuerswith more flexibility so they can rely on a qualifiedperson who has current knowledge of the project,as an alternative to naming the qualified personwho prepared the original information. In mostcases, we expect the qualified person approving thedisclosure would be an employee of the issuer. Inother cases we expect the issuer would have tocontract for the services on terms and conditionsthat are acceptable to both parties.

3.2 dataverification

A commenter would welcome guidelines forthe acceptance/rejection of legacy data.

Many projects include data collected andanalyzed using procedures standard for thetime and use of the data depends entirelyon the qualified persons opinion.Sometimes this data is used to declareindicated (or better) mineral resources.

A commenter thinks this requirement is toobroad because it captures any writtendisclosure of scientific or technicalinformation about a mineral project on aproperty material to the issuer. Forexample, if an issuer discloses in its interimMD&A quarterly mine production from amaterial property, a production forecast for

that mine or reserve or resource estimates,the requirement applies. The commenterbelieves the requirement should be limitedto disclosure of material scientific andtechnical information relating to explorationand drilling.

The qualified person is the expert and is in the bestposition to determine the reliability and suitability of

legacy data for the purpose used. We do not think itis appropriate for the securities regulatoryauthorities to provide guidance on industry bestpractices.

This provision is in the current Instrument and weare not aware of any problems with its practicalapplication. Therefore, we have not made anychanges.

3.3 explorationinformation

Subsection (1) disclosure of explorationinformationA commenter is concerned about theamount of information that is required giventhe broad definition of explorationinformation in the Instrument. Thisdefinition could include brief statements

that broadly indicate the type of resultsfrom ordinary course ongoing explorationactivities at a producing property. Forsummary disclosure of this nature, therequirements are excessive relative to theimportance of the information. Thecommenter recommends reducing theserequirements where drill hole data is notprovided or the disclosure relates toexploration activities on a producing

This provision is in the current Instrument and weare not aware of any problems with its practicalapplication. Therefore, we have not made anychanges.


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property. Section 3.5 does not provideenough of an accommodation.

Paragraph (2)(a) location and type ofsamplesA commenter suggests also requiring

disclosure of the number of samples.

Paragraph (2)(b) location, azimuth, anddip of drill holesA commenter thinks this paragraphrequires a company to provide too muchdetail, which can result in unwantedcomplications. For example, analystssometimes use the details incorrectly andissue misleading information. It should besufficient for the company to provide aninterpretation of the results disclosed.There is also strategic value in notproviding too much information tocompetitors.

We do not think the number of samples is criticalinformation that needs to be disclosed in everycase.

This requirement is consistent with the existingrequirement to disclose sample locationsrecognizing that azimuth, dip, and depth areimportant in locating the intersections in 3-D space.We think this provides important information forinvestors to assess the relative location andpotential continuity of mineralization between drillholes. We have slightly revised the drafting to clarifythat the information required is only with respect tothe results being disclosed. We also think thatdisclosure of such third party interpretations by oron behalf of an issuer would likely be misleadingand contrary to NI 43-101.

3.4 mineralresources andmineral reserves

Paragraph (c) key assumptionsA commenter proposes modifications torequire disclosure of the commodity priceand exchange rate used, as these are themost important assumptions for mineralresource and mineral reserve estimates,and comment on the estimates sensitivityto these assumptions.

Paragraph (d) risk factorsA commenter suggests retaining the wordstitle, taxation, socio-political or otherrelevant issues in the text.

Paragraph (e) cautionary languageA commenter suggests that CSA provideguidance on the meaning of equallyprominent including confirmation thattabular or graphic disclosure may beaccompanied by footnoted narrativedisclosure in satisfaction of thisrequirement.

New proposalA commenter notes that disclosed resourceand reserve estimates often changesignificantly with no explanation andproposes adding a requirement that an

issuer must reconcile current withpreviously disclosed estimates andcomment on contributing factors.

As these are key assumptions, we think discussionof these factors is already required and it is notnecessary to add further detail.

If these risks could materially affect the potentialdevelopment of the mineral resources or reserves,we think they are already caught by the wordsother risks

We have already provided guidance on this topic insubsection 2.3(6) of the Companion Policy.

We do not think it is necessary to impose thisrequirement because the supporting technicalreport will include a summary of all new information.Issuers are already required to disclose materialexploration information so we think the market

should know on what new information the revisedestimate is based.

3.5 exception forpreviously fileddisclosure

A commenter notes that the commoninterpretation of this section is that it refersto disclosure previously filed by the issueritself. Because the proposed amendments,in particular new subsection 4.2(7),

We have made this change for greater clarity.


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can be issued under a short formprospectus without requiring a technicalreport, the same should apply toinformation circulars and takeover bidcirculars. Further, issuers might choose tostructure their transactions using cash

raised through a short form prospectusoffering rather than as a share exchangetransaction; the technical reportrequirement should not drive transactionstructures.

also think there are many factors influencing howan issuer chooses to structure a transaction.

4.2(1) introductorylanguage

A commenter thinks the current wordingcould mean an issuer must file a technicalreport even if the scientific and technicalinformation relates to a non-materialproperty and suggests a drafting change toprevent this possible interpretation.

While we have not experienced any problems withhow issuers are interpreting this, for greater claritywe have made the suggested drafting change.

4.2(1)(f) annualinformation form

A commenter questions the proposedremoval of the qualifying language that thescientific and technical information must bematerial and not contained in a previouslyfiled technical report and is concerned thatthis change will force a company with evenslightly active projects to file technicalreports every year.

We have not removed this exemption for annualinformation forms. We have moved it to subsection4.2(8) and it now applies to all technical reporttriggers.

4.2(1)(g) valuation requiredto be preparedand filed undersecuritieslegislation

A commenter suggests that CSA shouldrequire or recommend that all valuation ofmineral properties should be prepared inaccordance with CIMVal Standards andGuidelines.

We do not think this change is necessary. It issufficient that technical reports supportingvaluations be prepared by a qualified person andwe do not think it is appropriate for the securitiesregulatory authorities to impose or endorse specificvaluation methodologies.

4.2(1)(i) takeover bidcircular

A commenter proposes permitting a timedelay for the filing of a technical report by areporting issuer, similar to the delayprovided for directors circulars inparagraph 4.2(5)(a). Reporting issuers willhave previously disclosed relevantscientific and technical information abouttheir properties and (as with a short formprospectus) any updated information in thebid circular would be supported by aqualified person. The requirement to file thetechnical report concurrently with the bidcircular affects the ability of the bidder toact in a timely fashion and creates adisadvantage for reporting issuers in themining industry as compared to issuers inother industries.

The Instrument permits more time for the filing of atechnical report to support disclosure in a directorscircular because the offeree often has little or nocontrol over the timing of the bid. In contrast, theofferor generally can control the timing and is in abetter position to organize its affairs for purposes ofmaking the bid. We are not convinced that, in thiscase, the burden imposed by the requirementgenerally outweighs the benefit to the market ofhaving the technical report available at the sametime as the takeover bid circular.

4.2(1)(j) anywritten disclosure

Three commenters expressly support theproposed expansion of this trigger to applyto all first-time written disclosure.


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imposes a burden on issuers that is notcommensurate with the benefit to investors.Paragraph (b) should be eliminated, oralternatively the Instrument should retainthe safe harbour in the current Instrumentfor annual information forms that repeat

information from a prior annual informationform that was supported by a technicalreport.

the mineral project, not the issuer. Also, we havenot removed the exemption for annual informationforms. It has been moved to subsection 4.2(8) andnow applies to all technical report triggers.

4.3 requiredform of technicalreport

A commenter notes that CSA is providingthe option to prepare a technical report inFrench, and suggests requiring that allsupporting documentation under section4.3 be provided in English to maintain theconsistency and transparency ofinformation given to the marketplace.

The option to prepare a technical report in French isavailable under the current Instrument, although notexplicitly stated. We have provided guidance in theCompanion Policy explaining the purpose of thisnew provision.

5. Part 5 Author of Technical Report

5.1 prepared bya qualified person

Two commenters recommend specifying inthis section that at least one qualifiedperson must take responsibility for eachsection or item of the technical report, asindicated in subsection 5.1(5) of theCompanion Policy.

A commenter thinks the requirement insection 5.1 should follow section 2.1 andallow a technical report to be approved bya qualified person, rather than prepared orsupervised by a qualified person. Thiswould permit greater flexibility in thepreparation of technical reports andimprove the timeliness of informationprovided to the capital markets.

We think this is already sufficiently clear as theprovision refers to a technical report, whichincludes all parts of the technical report.

Although we think it is appropriate for a qualifiedperson to approve an issuers general disclosure ofscientific and technical information, we do not agreewe should permit this with respect to the technicalreport. The technical report is the detailed,expertised document that supports the issuersdisclosure. We think it is critical that the informationin the technical report be prepared by or under thesupervision of a qualified person as the qualifiedperson is the only person with the appropriatequalifications to prepare and assess thatinformation.

5.2 execution oftechnical report

A commenter expressly supports therequirement to have a technical reportsealed by the qualified person.

5.3(2) issuerwhose securitiestrade on aspecified

exchange

Three commenters expressly support theproposed new exemption from theindependence requirement for a technicalreport of a producing issuer whose

securities trade on a specified exchange.

5.3(3) producingissuer exemptions

A commenter expressly supports theexpanded exemptions from theindependence requirement for a technicalreport of a producing issuer.


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foreign jurisdiction has such anobligation.

The reconciliation obligation is nota significant burden and givesinvestors better information tocompare properties.

7.1 - othercomments

A commenter suggests extending thepermission to use a foreign code to a co-owner of a property located in a foreignjurisdiction where the partner is registeredin a foreign jurisdiction.

A commenter suggests mandating thedisclosure of which acceptable foreigncode is used to prepare the technicalreport.

We think this situation is already covered byparagraph 7.1(1) (b).

We think this requirement is implicit in Items 14(b)and 15(b) of the Form. These sections require theissuer to comply with all the disclosurerequirements of the Instrument, including paragraph2.2(a), which requires disclosure in accordance withthe CIM Definition Standards. If an issuer isdisclosing under an acceptable foreign code instead

of the CIM Definition Standards, it will have todisclose the code it is using.

8. Part 8 Certificates and Consents of Qualified Persons for Technical Reports

8.1 certificates ofqualified persons

A commenter notes this section does notspecify when a certificate should be dated.They suggest the certificate should bedated the date of filing the technical reportor within three days of filing.

A commenter thinks that a qualified persontaking responsibility for resource or reserveestimation should have to provideadditional details about their relevantexperience to support their suitability to domineral resource/reserve estimation, andproposes adding a new requirement.

A commenter proposes specifying in thissection that at least one qualified person

must take responsibility in the certificatesfor each section or item of a technicalreport.

We think it is implicit that the date of the certificateis the date the qualified person signs the certificate,since subsection 8.1(1) requires the certificate to bedated and signed. We do not think the certificatedate should necessarily be tied to the filing date ofthe technical report as filing is the responsibility ofthe issuer. However, the issuer is encouraged to filethe technical report on a timely basis because the

technical report must contain all material scientificand technical information about the property inorder to be a current report.

We think this disclosure is already required. Underparagraph 8.1(2)(c), the qualified person mustprovide a summary of their relevant experience andcertify that they are a qualified person for purposesof the Instrument. Paragraph (c) of the definition ofqualified person requires the qualified person tohave experience relevant to the subject matter ofthe mineral project and the technical report.

We think this is already covered by section 5.1 ofthe Instrument, which requires a technical report

to be prepared by or under the supervision of oneor more qualified persons.

8.3 consents ofqualified persons

Two commenters propose that theexemption from the consent requirement insubsection (2) should also apply to stand-alone technical reports that an issuer filesvoluntarily.

Reports in the form of a technical report that arefiled voluntarily are not technical reports asdefined in the Instrument and therefore do not haveany consent requirement. Subsection 4.2(12) of theCompanion Policy provides guidance on consents


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One of these commenters thinks theupdated consent required under subsection(3) should only apply where the documentcontains an extract from or summary of the

technical report. If the document onlycontains mineral resources or reservessupported by a technical report, therequirement that the qualified personapprove the written disclosure obviates theneed for an additional consent, in both thecase of a new reporting issuer and avoluntarily filed report.

A commenter supports the proposedmodifications of the consent requirementsin subsections (2) and (3), but raises aquestion about secondary market liability.Which qualified person is responsible forthe report at the time of investment?

included with voluntarily filed reports.

The Instrument provides an option to name thequalified person who approved the issuersdisclosure of scientific and technical information,but does not mandate approval in all

circumstances. Even if the qualified person hasapproved the disclosure, we think it is important thatthe qualified person provide a full written consentfor the first time disclosure of mineral resources orreserves to verify they have reviewed the issuersdisclosure of the estimates.

We think that, in most cases, a qualified person willbe an expert as defined in securities legislation andis responsible for the information in the technicalreport as at the effective date of the report,regardless of the time of investment. However,whether secondary market liability applies in any

particular case is a question of law that can only bedetermined on a case by case basis.

9. Part 9 Exemptions

9.2(1) exemptions forroyalty interests

Six commenters expressly support theproposed new exemption for royaltyinterest holders from the requirement to filea technical report.

Five commenters think the exemptionshould extend to other types of carriedinterests (for example, metals streaming

agreements, which are economicallysimilar to royalty interests but have differentlegal and tax attributes).

Two of these commenters also suggestthat the lead-in language specifically referto a project on a property material to theissuer.

One of these commenters suggests thatreferences to the operator should also

include the owner.

Paragraph (c) operator has disclosedinformationThree commenters recommend thatparagraph (c) be amended to recognizethat the scientific or technical informationdisclosed by the operator of the propertymight not be at the same level as would bedisclosed under Canadian securities law

We agree that the exemption should extend tometals streaming agreements. As is the case for aroyalty holder, the relevant information for a

purchaser under such an agreement is theinformation provided by the operator. We have re-inserted the words or similar interest into thedefinition of mineral project and relevantprovisions of the Instrument. We have also providedguidance on these exemptions in section 9.2 of theCompanion Policy.

We do not think this change is necessary becausethe requirement to file a technical report onlyapplies to material properties.

We agree, and have made this change.

We think it is important that the owner or operatorhas disclosed the scientific and technicalinformation that is material to the royalty holder, andtherefore have made an amendment to this effect.We have also amended subparagraph 9.2(1)(a)(i)to include the requirement that the owner oroperator be a reporting issuer, as reporting issuersare subject to more rigorous disclosure


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given the potential difference in themateriality of the information to theoperator, or the requirements of thespecified exchange. Two commenterssuggest qualifying scientific or technicalinformation with the word material or

replacing the phrase with a preliminaryeconomic assessment, mineral resources,or mineral reserves.

requirements.

10 Other general comments

Liability A commenter has concerns about thepotential liability of qualified persons andissuers that they think NI 43-101 does notadequately address.

It is unclear whether a qualifiedperson is acting as an expertwhen they prepare or supervise

the preparation of scientific andtechnical information that formsthe basis for disclosure, or in theproposed Instrument, approve thedisclosure. If the qualified personis an expert, the consequence isthat the issuer is relieved ofliability for the disclosure. Thecommenter does not think this isthe intention of NI 43-101 andsubmits it is not an appropriateresult, particularly in the case of anon-independent qualified person.

The proposed Instrument refers invarious places to use of scientific

and technical disclosure of, ortechnical reports filed by, otherissuers [for example, 4.2(7), 5.3(4)and 9.2(1)(b)]. In cases where anissuer is entitled to extract from orrely on the disclosure of a thirdparty, the issuer should have tosatisfy conditions equivalent tothose under paragraph 4.2(7)(b)of the proposed Instrument. Itshould also be clear that the thirdparty is not responsible to theissuer or its investors for the useof the information.

For a qualified person to be subject to the civilliability provisions in securities legislation relating toexperts, all the conditions in the relevant legislationwould have to be met, including the provision of anexpert consent. Therefore, we do not think aqualified person would be potentially subject to civilliability in all capacities they act in under NI 43-101,nor is that the intent of the Instrument. Whethersecondary market liability applies in any particularcase is a question of law that can only bedetermined on a case by case basis.

We think the conditions to the exemption insubsection 4.2(7) of the Instrument are appropriate

because the new owner obtains an extension oftime for filing its own technical report. However, wedo not think it is necessary to impose equivalentconditions for the other exemptions mentioned.Subsection 5.3(4) is an exemption from theindependence requirement only; a qualified personmust still take responsibility for the technical reportand provide the related consent and certificate. Theexemption for royalty holders in subsection 9.2(1) isonly an exemption from the requirement to file atechnical report. The royalty holder must still complywith all other provisions of NI 43-101, includingnaming a qualified person who is responsible forthe royalty holders scientific and technicaldisclosure.

C. PROPOSED FORM 43-101F1 (FORM)

1. Generalcommentsregarding theForm

14 commenters express general supportfor the proposed changes to the Form.

ni 43-101 repeal-replacement 8 abril 2011

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