A core tenet of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101) is to ensure disclosure is based on reliable information that reflects the professional opinions of persons that meet the requisite educational, experience and professional association requirements (referred to as qualified persons). To this end, qualified persons are the ones undertaking responsibility for the scientific and technical information and standing behind this work. Broadly disclaiming responsibility for information can compromise the integrity of the disclosure being presented to the public. There has been an increasing use of disclaimers in technical reports on the basis that such disclaimers are “customary” and “allowed.” However, NI 43-101 strictly regulates disclaimers, and there are only limited circumstances in which a qualified person can disclaim responsibility for, or attempt to limit reliance on, scientific and technical data in a technical report.
Targeted Disclaimers
Pursuant to NI 43-101, a limited disclaimer is only permissible in circumstances where the technical report includes or relies on opinions, reports or information from a third-party expert that is not a qualified person, or from the issuer, with respect to only legal, political, environmental or tax matters. Further, this disclaimer is only valid if the report:
- identifies the source of the information relied upon;
- details the extent of the qualified person’s reliance; and
- specifies the portions of the technical report to which the disclaimer applies.
Additionally, qualified persons may rely on third-party reports or opinions, such as gemstone valuations or commodity pricing if pricing is not publicly available. Again, when doing so, disclaimers must identify the source, outline the qualifications of the external expert and why it is reasonable to rely on the expert, describe any significant risks associated with the valuation or pricing and explain the qualified person’s verification scope.
Blanket Disclaimers
Oftentimes, blanket-type disclaimers are included at the beginning of technical reports. These disclaimers are often included under the heading “Important Information” or “Notice.” Examples of such disclaimers are:
- “Unauthorized use or reuse by third parties of reports, publications, exhibits, documentation, conclusions and other work products obtained or developed for the purposes of this report is prohibited.”
- “The report is confidential to the issuer and the qualified person accepts no responsibility of whatever nature to third parties to whom this report may be made known. No part of this document may be reproduced without the prior written approval of the qualified person.”
Issuers and their advisors are reminded that such disclaimers are not permitted, as NI 43-101 prohibits the inclusion of disclaimers that:
- Disclaim responsibility for, or limit reliance by another party on, any information in the part of the report that the qualified person prepared or supervised; or
- Limit the use or publication of the report in a way that interferes with the issuer’s obligation to file the report on SEDAR+.
Examples of Acceptable Blanket Disclaimer Language
Regulators have accepted certain blanket disclaimers that appropriately delineate reliance on external information. Examples of such disclaimer language include:
- “The results of this Technical Report represent forward-looking information, which may include pricing assumptions, sales forecasts, projected capital and operating costs, mine life, production rates and other assumptions. Results may vary from those presented in this report.”
- “The quality of information, conclusions and estimates contained herein reflects the level of effort involved in the Consultant’s services and is based on: (i) information available at the time of preparation, (ii) data supplied by external sources and (iii) the assumptions, conditions and qualifications of its contractors and each Consultant. Except as required under Canadian provincial and territorial securities laws, any use or reliance on this report by a third party is at that party’s sole risk.”
These examples demonstrate appropriate reliance on third-party information while maintaining the investor accessibility required under NI 43-101.
An Evolving Regulatory Landscape
The standards and best practices for disclaimers in NI 43-101 reports are evolving. Regulatory authorities may update these requirements as market practices shift. Therefore, issuers and qualified persons should regularly consult legal counsel before including or revising disclaimers in technical reports.
For more on NI 43-101, find all of our articles in this series here.
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