On June 16, 2016, the Securities and Exchange Commission proposed rules (Proposed Rules) to modernize the property disclosure requirements for mining companies under Item 102 of Regulation S-K. The Proposed Rules would also rescind Industry Guide 7 and add a new subpart to Regulation S-K to incorporate the SEC’s mining property disclosure requirements. In its press release announcing the Proposed Rules, the SEC Chair noted that the Proposed Rules would align Regulation S-K with “global standards and give investors more comprehensive information of a registrant’s mining properties that they can use to make informed investment decisions.”

As noted in the press release, the Proposed Rules would:

  • provide one standard that requires registrants to disclose mining operations that are material to the company’s business or financial condition;
  • require a registrant to disclose mineral resources and material exploration results in addition to its mineral reserves;
  • permit disclosure of mineral reserves to be based on a preliminary feasibility study or a final feasibility study;
  • provide updated definitions of mineral reserves and mineral resources;
  • require, in tabular format, summary disclosure for a registrant’s mining operations as a whole as well as more detailed disclosure for material individual properties;
  • require that every disclosure of mineral resources, mineral reserves and material exploration results reported in a registrant’s filed registration statements and reports be based on, and accurately reflect information and supporting documentation prepared by, a “qualified person;” and
  • require a registrant to obtain a technical report summary from the qualified person, which identifies and summarizes for each material property the information reviewed and conclusions reached by the qualified person about the registrant’s exploration results, mineral resources or mineral reserves.

The SEC is soliciting public comment over the next 60 days on the Proposed Rules.

The complete text of the Proposed Rules is available here.