An Overview of Ore Reserve Certification Requirements for Public Stock Offerings

INTRODUCTION In both the United States and Canada, a company making a public offering of securities must comply with regulations which have been promulgated by Federal and/or Provincial Legislatures. This paper focuses on the regulations pertaining to reserve reports required by the United States Securities and Exchange Commission (SEC). SEC RESERVE FILINGS Reserve reports made to the United States Securities and Exchange Commission are the only reserve reports which are directly regulated by the United States government. The requirements for SEC reserve reports are set forth in the filing forms as shown in Appendix A, from Item 17A of SEC Form S-18. These reporting requirements, which are intended to protect the investing public from inaccurate or misleading claims, are primarily oriented to S-1 or other filings for new stock issues but must also be followed for annual 10K reports which must be filed annually by U.S. public corporations as part of the Corporate Annual Report. These undertakings require independent audits of reserves, mine designs, plant facilities and a general economic evaluation of the planned or existing operation as part of the backup documents for filing. An ore reserve is defined by the SEC as "That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination". This definition is unchanged since it was last