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In October, the U.S. Securities and Exchange Commission (SEC) adopted a final rule that overhauls its existing disclosure requirements for mining company issuers. The new disclosure requirements replace the SEC’s existing Industry Guide 7 which had not been updated in over 30 years. The final rules provide a two-year transition period so that a registrant will not be required to begin to comply with the new rules until its first fiscal year beginning on or after Jan. 1, 2021.

Jonathan Handyside, counsel in the European Capital Markets practice at Shearman & Sterling, and specializing in mining and metals, offers his perspective on the changes.

MINING.com: What are the impacts of the changes to the disclosure requirements?

Handyside: The Committee for Mineral Reserves International Reporting Standards (CRIRSCO's)  objective was to harmonize mining reserve reporting and public disclosure so the Canadian NI 43-101 standard…and others are aligned with international standards. The US, for the longest time was an outlier. For example, under the US rules, mining companies are not permitted to disclose mineral resources. Basically, these are estimates of minerals that don’t rise to the level of certainty to be classified as a reserve.

In Canada, Australia, South Africa and other countries, companies are allowed to disclose resources, and in certain instances are required to because it would be material information to investors. That was one of the key differences between US rules and the international standards. In 2016, the SEC proposed rules to update their mining disclosure requirements and try to harmonize them with the CRIRSCO standards.

MINING.com: How are the changes a positive for the industry?

Handyside: In particular for companies that have listings both in the US and outside the US, I think it will make it easier for those companies...

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