Review of BC Securities Commission Decisions and Orders

GoldMinerPulse Blog, March, 2011


Version 1.1.1, March 11, 2011

What is the British Columbia Security Commission (BCSC)?

The British Columbia Securities Commission (BCSC) is the independent provincial government agency responsible for regulating securities trading in British Columbia through the administration of the Securities Act. [About BCSC webpage]

What Is The Scope of The BCSC?

The BCSC is a powerful commission with scope to affect many/most of the Canadian gold and silver mining companies, independent of whether or not they are headquartered or mining in British Columbia. The BCSC reviews a company when the company has some connection with British Columbia.

A question to the BCSC about the number of reviews initiated by the BCSC yielded the following response from Mr. Robert T. Holland, P.Geo, Chief Mining Advisor, Corporate Finance at the British Columbia Securities Commission:

Since 2004 we have reviewed, at least to some degree, the continuous disclosure record of many mining issuers. We do this through our continuous disclosure review and prospectus review programs. The level and detail of these reviews varies substantially based on the circumstances and reasons for our review and what we see on our initial assessment. We do not publish lists of issuers that we have reviewed and we do not certify that such issuers are in compliance even if we do not identify any problems. The large majority of our reviews do not result in any public decision. Where we identify deficiencies in compliance with NI 43-101 or even just misleading disclosure, we have a number of options we can consider. For relatively minor breaches, we may take no action or simply send the issuer a warning for future reference. There is no public record of these reviews. For more significant issues, we may require the issuer to issue a clarifying news release correcting the non-compliant disclosure. While we do not publish a record of these reviews, we generally ask the issuer to state in the clarifying news release that the news release is being issued as a result of our review. We may also put the issuer on our defaulting issuers list, the details of which you can find on our website. For more serious breaches, such as not filing a compliant technical report, we can issue a cease trade order, effectively preventing trading of the securities in BC until the problem is fixed. While compliance related CTO decisions are included in your search, you will also find a separate list of current and previous cease trade orders on our website.

You should not assume that our Decision and Orders list is restricted to compliance related matters, If you read through these, you will see that many of these relate to routine relief applications or exemptions orders that have nothing to do with allegations of misconduct.

I believe the list of Decisions and Orders as presented below reasonably capture the Mr. Hollands guidance. In addition to the list only capturing Decisions and Orders that contain the key word "43-101", I emphasis that the filings in the Routine Business Decisions and Orders subsection are not related to any disclosure misconduct.

What Does This Blog Consider?

This blog looks at the BCSC's BCSC Decisions and Orders filings (select Enforcement and then Decisions & Orders on the home page menu) and attempts to reverse engineer the working policies the commission follows in its review of NI43-101 reports. Specifically, when and for what type of reasons has the BCSC acted in the past.

On March 10, 2011, a query on the keyword "43-101" returned 111 Decisions and Orders that have been issued by the BCSC since 2004. I have broken the search results down into the following classifications and mapped the BCSC Decision and Orders into the best fitting of the following categories (more details for each order are provided in a subsequent sub sections):

Note: If you search the key word "43-101" using the advanced search option on March 11, 2011, you see 171 results under Decisions & Orders. Of the 171, 60 results are from the year 2003 or earlier and were not included in the above counts.

Interesting Decisions and Orders

Decisions and orders in the category are typically initiated by the BCSC and which deal with some aspect of an NI43-101 report. Specific quotes are included to provide further insight. In my opinion, the following orders fall in this category:

Routine Business Decisions and Orders

Companies may request decisions from the BCSC in the ordinary conduct of business. Typically, companies are requesting exceptions for certain policies. In my opinion, the following orders fall in this category:

Did Not File Decisions and Orders

Failure to file required documents is most common reason for the BCSC to take action. In my opinion, the following orders fall in this category because a company failed to file the required 43-101 compliant technical reports:

Decisions and Orders for Companies Without a Sedar Presence

Companies that have no presents at Sedar are grouped in this category. These companies are of no interest since documents that OTC and other companies might call NI43-101 reports have in my experience shown little resemblence to any of the 1000s NI43-101 compliant documents Canadian mining companies have filed at Sedar. In my opinion, the following orders fall in this category:

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