Disclosure Standards for Companies Engaged in Mineral Exploration, Development & Production

6 Use All resource and reserve estimations disclosed must provide the name of the qualified person responsible for the calculation and his/her relationship to the company. The company must also state whether, and how, any independent verification of the data has been performed. Particular care should be taken to distinguish between resources and reserves so that they are not assumed to be equivalent in the mind of the reader. Resources and reserves should, whenever possible, be published in a manner so as not to confuse the reader as to the potential of the deposit. Inferred resources must not be aggregated with measured and indicated resources nor proven and probable reserves, as the case may be. Any categories of resources and reserves which are aggregated must also be disclosed separately. When reserves are first reported, the key economic parameters of the analysis must be provided, such as operating and capital cost assumptions, and the assumed prices of the mineral commodities which could be produced. If the prices used differ from the current prices of the commodities, an explanation should be given, including the effect on the economics of the project if current prices were used. Sensitivity analyses may be used to provide a better understanding of the effects of changes in commodity prices on the economics of the project. All reported quantities of resources and reserves must be expressed in terms of tonnage and grade. Contained ounces of gold, for example, should not be disclosed out of the context of the tonnage and grade of a deposit, with the possible exception of the resources and reserves of mining companies which have more than one mine in production. In that case, the company should not aggregate contained minerals from properties that are not in production with those that are in production. Polymetallic resources and reserves must not be expressed in terms of “metal equivalents” except in the limited circumstances as set out in NI 43-101, F1, 19(k) and the CIM Standards on Mineral Resources and Reserves. It is also inappropriate to refer to the gross value or in situ value of resources and reserves. Ascribing gross values to resources and reserves remaining in the ground without disclosing potential capital and operating costs and other economic factors is meaningless and potentially misleading. Development Companies with properties which are at or near the development stage must avoid disclosure which leads investors to conclude prematurely that a mine is in production or is about to be placed in production. Care should be taken to distinguish between current and planned production rates. Operating capacities and production rates must be expressed in terms generally used in the mining industry and in a manner which is easily translated into gross revenues. Significant transportation costs, smelter losses, tolls or penalties for unwanted minerals should be disclosed for the same reason. Feasibility Studies Feasibility studies (including pre-feasibility studies) are undertaken for the purpose of determining whether or not a mineral deposit can be developed into a viable operating mine. Such a study is necessary to establish the presence of reserves on a property. When a company discloses the results of a feasibility study, it must disclose the purpose and scope of the study as well as the conclusions. The identity and qualifications of the firm or individuals that prepared the report must be provided as well as their relationship to the company. Key parameters of the feasibility study must be disclosed as in the case of the reporting of reserves.