by Raymond McDougall of Stikeman Elliott LLP
In late June, Barkerville Gold Mines Ltd. announced major estimates of resources and “geological potential”. The sizes of the estimates were remarkable – indicated resources of 10.6 million ounces of gold and “geological potential” of 65-90 million ounces of gold. That announcement was followed last week by a Barkerville press release indicating that the British Columbia Securities Commission had reviewed the company’s technical disclosure and draft technical report and expressed concerns with both estimates. In the latter press release, Barkerville cautioned investors against relying on either of the disclosed estimates until the BCSC completed its technical disclosure review.
What strikes me as interesting about this situation is what stands out about the facts and the approach the BCSC is taking here. On the facts, the sizes of the estimates certainly made the original announcement hard to miss. One could also consider whether disclosing “geological potential” is what caught the attention of the regulators. While issuers are permitted to say certain things about the potential of exploration targets, the principle underlying NI 43-101 is that mineral disclosure should be based on various levels of certainty. The further one moves away from certainty, the trickier the disclosure can become and the more limited it arguably should be.