Social media, investor decks and NI 43-101: Are your promotions offside?

For many mining issuers, National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) is viewed primarily as the rules that govern technical reports and disclosure related to mineral resources and mineral reserves. However, one of the most common compliance errors made by mining issuers is forgetting that NI 43-101 extends beyond the technical report.

Canadian securities regulators have reminded mining issuers that investor presentations, website materials, fact sheets and other promotional materials posted online may constitute ‘written disclosure’ as such term is defined in NI 43-101 and are therefore subject to the same scrutiny as formal filed disclosure.

In today’s online environment, issuers are increasingly communicating with investors through LinkedIn, X, presentations, email campaigns and other digital methods. While these tools are valuable for market engagement, they can create significant regulatory risk if they are not properly vetted. A LinkedIn announcement celebrating exceptional drill results, a conference slide highlighting resource potential or a slide deck referencing project economics may all engage NI 43-101 obligations if they contain scientific or technical information regarding a mineral project.

When marketing materials become regulated disclosure

The threshold for what constitutes regulated disclosure is lower than many mining issuers may anticipate. A slide deck or social media post may be characterized by a securities regulator as “written disclosure of scientific or technical information” the moment it includes exploration data, assay results, mineral resource figures, reserve estimates, production assumptions or economic projections tied to a mineral project. Once that threshold is crossed, the issuer must ensure the disclosure, in whatever form, complies with NI 43-101, including by naming the qualified person who approved the disclosure where required and ensuring the information is presented in a manner that is balanced, accurate and not misleading.

Canadian securities regulators often review investor presentations and website disclosure for NI 43-101 compliance. Despite this, many mining issuers have found themselves the subject of regulatory comments after publishing technical disclosure in marketing materials that would not have passed scrutiny in a formal filing because it did not meet the requirements contained in NI 43-101.

Common promotional disclosure pitfalls

One common issue that securities regulators flag is the disclosure of mineral resources or reserves without proper categorization. Promotional materials, including online posts, sometimes simplify a resource estimate into statements such as “our flagship property contains 500,000 ounces of gold” without specifying whether that amount of gold is an inferred mineral resource, an indicated mineral resource, a measured mineral resource, a probable mineral reserve or a proven mineral reserve.

While marketing teams may favour concise messaging, NI 43-101 requires mineral resources and mineral reserves to be disclosed using the prescribed categories and prohibits disclosure in a manner that obscures the distinction between them. Failing to properly categorize resources can create a misleading impression of certainty that regulators take seriously.

Another common issue is the selective presentation of drilling results. Mining issuers often want to showcase their strongest exploration successes, but highlighting only the most favourable information without sufficient context can be problematic. Regulators have cautioned against “cherry-picking” results in promotional materials, particularly where issuers fail to provide complete information, omit lower-grade surrounding intervals or otherwise present results in a way that exaggerates significance. Drill results should always be disclosed with sufficient context to allow investors to accurately assess their importance, rather than simply as eye-catching statistics without complete information.

Economic disclosure is another area where issuers stray offside in the online environment. It is not uncommon to see investor decks include projected revenues, cash flow figures, internal rates of return, mine life estimates or payback periods in an effort to demonstrate project upside. However, where those economic assumptions are not grounded in a compliant technical study or where the disclosure implies a level of technical advancement not yet supported by the issuer’s development stage such statements can breach the mining issuers obligations under NI 43-101.

In all cases, where an issuer discloses scientific or technical information about a project, the issuer must also provide the name and the relationship to the issuer of the qualified person who either prepared the information that forms the basis of the disclosure or the person who approved the written disclosure.

Implementing a simple review process

The good news is that most of these issues can be avoided with a simple review process. Before any investor-facing materials go public – whether a slide deck, social media graphic, website update or conference handout – issuers should implement a internal sign-off protocol.

First, marketing or investor relations personnel should identify whether the content includes any scientific, technical or economic information relating to a mineral project. If it does, the material should be escalated for review by a qualified person to confirm the content’s accuracy and NI 43-101 compliance.

Finally, legal or compliance personnel should conduct a final review to ensure required cautionary statements are included and that the disclosure does not otherwise breach NI 43-101.

In many cases, a ten-minute compliance check before publication can prevent the need for costly corrective disclosure and months of regulatory headache.

Key takeaways

The practical takeaway for mining issuers is straightforward: If a statement is technical enough to attract investor attention, it is likely technical enough to attract regulatory scrutiny.

NI 43-101 applies beyond the technical report and in the eyes of securities regulators a website presentation or LinkedIn post can carry the same compliance consequences as a formal news release.

As promotional activity becomes more immediate and online, mining issuers must remain vigilant to ensure their disclosure controls are sufficient to ensure promotional materials stay onside of NI 43-101.

The MLT Aikins Mining and Natural Resources group assists a wide range of major, intermediate and junior clients in Canada and overseas in all phases of the industry, from precious and base metals exploration, through project development, production and marketing. If you have any questions about NI 43-101 compliance, please don’t hesitate to contact us.

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