TSE, OSC committee to re-examine mining rules — Panel to make recommendations by end of the year

The Toronto Stock Exchange (TSE) and the Ontario Securities Commission (OSC) have announced the formation of a task force to assess the need for regulatory standards for the mining industry.

The Mining Standards Task Force consists of members of the Canadian minerals industry, including representatives from mining companies, financial analysts, the TSE and OSC, as well as consultants. In addition, Micon International has been retained to provide assistance in the assessment of existing technical procedures.

Co-chaired by Morley Carscallen, vice-chairman of the OSC, and John Carson, senior vice-president of market regulation for the TSE, the committee will examine such issues as drilling and assaying procedures used by mining companies, and whether additional information should be provided in prospectuses and in continuous disclosure documents in order to assist investors and analysts in evaluating results from exploration programs.

Carson would not speculate on what recommendations the committee might make but said he “expects there will be a number of regulatory changes designed to tighten up the administration of practices in the field, as well as the reporting on them.

“I have no doubt that we will see some changes,” he said.

The task force was established not because of a dissatisfaction with existing rules but because, as Carson said, “the area merits review and some professional analysis. We’ll see to what degree we think the current rules can be improved upon.”

The formation of the task force was announced following the collapse of Bre-X Minerals, and Carson said questions surrounding the rise and fall of the junior miner “are going to be looked at in the context of the task force’s review.”

The group is expected to present its recommendations to the TSE and OSC by the end of the year. Any recommendations for improving existing procedures would not be difficult to implement, said Carson. “In the case of the TSE, changes can be implemented fairly quickly once the board of governors decides to approve them, though changes to TSE and OSC rules are subject to a public comment process.”

The task force will also review suggestions made by the mining community at large. “A large number of individuals, companies and groups have expressed an interest in the task force’s work, and, seeing the wide level of interest that seems to be out there, we wanted everyone to have an opportunity to state his views,” he explained. “We’re also going to be directly pursuing submissions from certain interested constituencies and will be sending a survey to all mining companies on the TSE.”

For his part, Carson thinks standards for the reporting of exploration programs and drill results are required. “In my own view, there is a lack of uniformity in the approach taken by various companies to the disclosure of their activities, meaning that different standards of disclosure are being observed, which, in turn, makes it difficult for investors and analysts to size up what a company is doing or what results they’re achieving.” Other members of the task force include: David Beatty, executive vice-president of Yorkton Securities; Robert Cook, director of market surveillance for the TSE; John Drury, a mining consultant; James Gill, chief executive officer of Aur Resources; David Harquail, vice-president of Franco-Nevada Mining; Neil Hillhouse, chief executive officer of Orvana Minerals; Edmund Kimura, a consulting geologist; Edward Reeve, senior gold analyst at ScotiaMcLeod; Kathryn Soden, manager of market operations at the OSC; and Steve Vaughn, with the law firm of Aird and Berlis.