FAQs About NI 43-101 Reports

National Instrument 43-101 (NI 43-101) Standards of Disclosure for Mineral Projects is a regulatory framework set by the Canadian Securities Administrators (CSA) that governs how public companies must disclose scientific and technical information about their mineral projects. This framework ensures that the information disclosed is accurate, credible, and understandable to investors, providing a standardized reporting mechanism for mineral exploration, development, and production activities. 

Quick Links

In this article, we answer several FAQs about NI 43-101 reports, including the following. (Click the “quick link” below to jump to the associated section.)

What are The Requirements for NI 43-101 Reports?
What Circumstances Require a NI 43-101 Report?
What are Common NI 43-101 Report Filing Mistakes?
What is the Difference Between NI 43-101 and JORC?
What is the Difference Between NI 43-101 and SK-1300?

Additional Reading:

For more basic questions about NI 43-101 reports including what an NI 43-101 is, what it’s used for, key information in NI 43-101s, and a sample NI 43-101 outline, read our recent blog: “What is an NI 43-101 and What is it Used For?“

Requirements for a NI 43-101 Report

An NI 43-101 report must be prepared by a “Qualified Person” (QP) who is an engineer or geoscientist with at least five years of experience in mineral exploration, mining, or mineral project assessment and is a member in good standing of a professional association. The report encompasses several key components:

1. Executive Summary: Provides a brief overview of the project, including its location, ownership, geological setting, exploration history, mineral resource and reserve estimates, and conclusions and recommendations.
2. Introduction: Details the purpose of the report, the terms of reference, and the sources of information and data.
3. Property Description and Location: Includes detailed information about the property’s location, area, mining rights, permits, and agreements.
4. Accessibility, Climate, Local Resources, Infrastructure and Physiography: Describes the project’s logistical aspects, including access to the site, climate, availability of water, power, labor, and potential environmental impacts.
5. History: Outlines previous exploration, ownership, and production history.
6. Geological Setting and Mineralization: Details the regional, local, and property geology and describes the mineralization.
7. Exploration: Summarizes the exploration activities undertaken, including geophysical, geochemical, and geological surveys, and drilling.
8. Drilling: Provides details on drilling programs, including techniques, depths, and significant results.
9. Sample Preparation, Analyses, and Security: Describes the procedures for sample collection, preparation, analysis, and the measures taken to ensure the security of the samples.
10. Data Verification: Discusses the steps taken by the Qualified Person to verify the data, including personal inspections, data reconciliation, and independent sample analysis.
11. Mineral Resource and Reserve Estimates: Includes detailed information on the methodology used for resource and reserve estimation, classification criteria, and the results.
12. Other Relevant Data and Information: Any additional information that may impact the project’s economic viability, such as environmental studies, agreements, or economic analysis.
13. Interpretation and Conclusions: The Qualified Person’s interpretation of the data and conclusions regarding the project’s potential.
14. Recommendations: Suggestions for further work, including proposed exploration or development programs and budgets.
15. References: A list of all sources of information used in the report.

Circumstances Requiring an NI 43-101 Report

An NI 43-101 report is required in several circumstances, primarily related to public disclosures by mineral exploration and mining companies listed on Canadian stock exchanges. These include: 

• Initial public offerings (IPOs) for companies involved in mineral projects.
• When a company acquires or discovers a new mineral project that significantly affects the company’s value or investment decision.
• Public disclosure of mineral resources, reserves, or exploration results that are considered material changes for the company.
• Filing annual information forms that include detailed information about mineral projects.

Common NI 43-101 Report Filing Mistakes

Filing a NI 43-101 report requires meticulous attention to detail and a deep understanding of the regulatory requirements. Despite the comprehensive guidelines provided, companies and Qualified Persons (QPs) often encounter pitfalls that can lead to common mistakes in the filing process. These mistakes can range from minor oversights to significant errors that might require a refiling of the report or lead to regulatory penalties. Here are some of the most common mistakes made when filing an NI 43-101 report:

1. Inadequate Qualifications of the Qualified Person

One of the foundational requirements of NI 43-101 is that the report must be prepared by a Qualified Person who has sufficient experience and is a member in good standing of a recognized professional association. Mistakes are made when the individual’s qualifications or experience do not adequately cover all aspects of the report or when their professional status is not appropriately verified.

2. Insufficient Data Verification

NI 43-101 requires thorough data verification by the QP to ensure the reliability of the data presented in the report. A common mistake is the insufficient verification of historical data, third-party data, or laboratory analysis results. This oversight can cast doubt on the report’s conclusions and the project’s overall credibility.

3. Inadequate Disclosure of Risks and Uncertainties

Projects in the mining industry are inherently subject to various risks and uncertainties, including geological, environmental, permitting, and market-related risks. Failing to adequately disclose these risks and how they might impact the project’s outcomes is a frequent oversight in NI 43-101 reports.

4. Misclassification of Resources and Reserves

The classification of mineral resources and reserves must adhere to strict criteria based on geological confidence and economic viability. A common error is the misclassification of resources and reserves, either by overestimating the project’s economic potential or by not adequately supporting the classification with appropriate technical and economic evaluations.

5. Insufficient Detail on Exploration and Testing Methods

NI 43-101 reports sometimes lack detailed descriptions of the exploration and testing methods used, including sampling, drilling, and analysis techniques. This omission can make it difficult for readers to assess the validity and reliability of the exploration results.

6. Non-Compliant Disclosure of Historical Estimates

When including historical estimates in a report, it is crucial to provide context, clearly state that the estimates are not being treated as current mineral resources or reserves, and explain the work needed to upgrade them to current standards. Failure to do so can lead to misunderstandings about the project’s potential.

7. Overlooking Technical and Economic Study Requirements

For advanced-stage projects, NI 43-101 requires the inclusion of preliminary economic assessments, pre-feasibility studies, or feasibility studies. A mistake would be to either not include these studies when necessary or to present them without the required level of detail and analysis.

8. Incomplete or Inaccurate Property Descriptions

The report must include a comprehensive description of the property, including location, access, infrastructure, tenure, and any encumbrances. Errors or omissions in this section can lead to questions about the project’s viability and legal standing.

9. Lack of Transparency in Reporting Results

Failing to report exploration, testing, and analysis results transparently, including both positive and negative results, can lead to a biased understanding of the project’s potential. This includes the appropriate use of tables, figures, and appendices to clearly present the data.

10. Non-Compliance with Form and Content Requirements

NI 43-101 outlines specific requirements for the form and content of the report. Common mistakes include non-compliance with these requirements, such as omitting required sections, failing to follow the prescribed format, or not adequately addressing each required item.

Avoiding these common mistakes requires a thorough understanding of the NI 43-101 guidelines, careful preparation, and meticulous review of the report before filing. Companies are advised to engage experienced QPs who have a proven track record of preparing compliant NI 43-101 reports and to consider independent reviews to identify and correct any potential issues before submission. This proactive approach can save significant time and resources, prevent regulatory setbacks, and enhance the credibility of the disclosed information with investors and regulators.

NI 43-101 vs. JORC Code

The JORC Code, or the Australasian Code for Reporting of Exploration Results, Mineral Resources, and Ore Reserves, is a professional code of practice that sets minimum standards for public reporting of mineral exploration results, mineral resources, and ore reserves. Developed by the Joint Ore Reserves Committee (JORC), which is sponsored by the Australasian Institute of Mining and Metallurgy (AusIMM), the Australian Institute of Geoscientists (AIG), and the Minerals Council of Australia (MCA), the JORC Code is widely accepted in Australia, New Zealand, and internationally.

Similar to NI 43-101 reports, the primary purpose of the JORC Code is to ensure that the reporting of exploration results, mineral resources, and ore reserves is transparent, consistent, and informed by an understanding of the economic extraction potential. This is intended to provide a reliable basis for investment decisions by the financial community and to maintain trust in the mining industry’s public disclosures.

While both NI 43-101 and the JORC Code aim to provide a framework for the public reporting of mineral exploration projects, there are key differences:

• Geographical Applicability: NI 43-101 is a Canadian regulation, while the JORC Code is widely used in Australia and accepted in other jurisdictions.
• Qualified Person Requirement: NI 43-101 mandates that reports must be prepared by a Qualified Person, with specific requirements for qualification and experience, whereas the JORC Code requires a Competent Person, with somewhat similar but not identical qualifications.
• Reporting Standards: Both codes have different terminology and criteria for reporting exploration results, mineral resources, and ore reserves, reflecting variations in legal and regulatory environments.

NI 43-101 vs. SK-1300

SK-1300, which replaces the historical Industry Guide 7, is the U.S. SEC’s regulation for the reporting of mineral resources and reserves. Key differences between NI 43-101 and SK-1300 include:

• Regulatory Scope: SK-1300 applies to companies registered with the SEC, while NI 43-101 applies to companies listed on Canadian exchanges.
• Disclosure Standards: SK-1300 allows for the disclosure of mineral resources in SEC filings, aligning more closely with international reporting standards, including the CRIRSCO template, which was not permitted under the previous Guide 7.
• Qualified Person: Both frameworks require a report to be prepared by a qualified expert, but the definitions and qualifications can vary slightly between the two.

Final Thoughts

NI 43-101 provides a robust framework for the disclosure of scientific and technical information related to mineral projects for companies listed in Canada. Its requirements ensure transparency, accuracy, and consistency in reporting, facilitating informed decision-making by investors.

How Can We Help? 

Rangefront Mining Services is a Qualified Expert and has significant experience preparing NI 43-101 reports. For more information about our NI 43-101 reporting services or to ask a question or request a quote, click “Contact Us” below.

ABOUT THE AUTHOR

BRIAN GOSS

President, Rangefront Mining Services

Brian Goss brings over 20 years of experience in gold and mineral exploration. He is the founder and President of Rangefront, a premier geological services and mining consulting company that caters to a large spectrum of clients in the mining and minerals exploration industries. Brian is also a director of Lithium Corp. (OTCQB: LTUM), an exploration stage company specializing in energy storage minerals and from 2014 to 2017, he fulfilled the role of President and Director of Graphite Corp. (OTCQB: GRPH), an exploration stage that specialized in the development of graphite properties. Prior to founding Rangefront, Brian worked as a staff geologist for Centerra Gold on the REN project, as well as various exploration and development projects in the Western United States and Michigan. Brian Goss holds a Bachelor of Science Degree with a major in Geology from Wayne State University in Michigan.

You may also be interested in...