The upcoming SEC regulations require all mining, mineral exploration, royalty, and vertically-integrated companies to provide detailed technical summary reports on all properties that are "material" to their business. What does that mean to be material to their business? The answer is a resounding... It depends! The SEC left the tests for materiality to the standard for materiality determinations pursuant to Securities Act Rule 405 and Exchange Act Rule 12b-2. Under these standard definitions, a company’s mining operations will be considered material to its business or financial condition if there is “a substantial likelihood that a reasonable investor would attach importance” to the information about the mining operations when deciding whether to buy, hold or sell the company’s securities.
In accordance with the SEC’s long-established approach to materiality determinations, the adopting release instructs companies to consider both quantitative and qualitative factors regarding their overall business and financial condition to determine whether their mining operations are material.
When considering the relevant factors, a registrant must aggregate all mining operations, regardless of any individual mining property’s stage of development and the size or type of commodity produced.
If you have questions on whether one or more of your properties meet the definition of being "material", and ultimately leads to reporting, then contact Mining Plus for a discussion here. We have prepared a comprehensive checklist of both quantitative and qualitative aspects that reflect on whether a property could be considered material. We can take some of the confusion out of this question.
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