STOCKMARKET watchdog the Australian Securities and Investments Commission (ASIC) has re-issued an updated Information Sheet 214 Mining and resources: Forward-looking statements (INFO 214), on statements relating to future matters commonly made in the mining and resources industry.
ASIC said the goal is to draw together and better explain the existing rules on the disclosure of statements relating to future matters commonly made in the mining and resources industry, i.e., production targets and forecast financial information based on production targets.
The revised document incorporates some minor drafting changes to clarify its guidance. ASIC said the changes have been made in response to concerns and misunderstandings that arose at the time of INFO 214’s original release in April 2016.
The matters clarified in revised INFO 214 are:
- forward looking statements have always under law been required to be based on reasonable grounds, and INFO 214 does not change this position;
- production targets and forecast financial information can be published even if secured funding is not in place – but a company still needs to be able to demonstrate ‘reasonable grounds’ that it could obtain the requisite project finance as and when required;
- production targets and forecast financial information can be published based not only on ore reserves but also on mineral resource estimates – provided they have ‘reasonable grounds’ for that estimated mineralisation, and each of the JORC Code modifying factors; and
- a company that does not have reasonable grounds for forward-looking statements and therefore cannot make statements of this kind should still disclose reliable and relevant information of a technical nature (for example, from scoping studies) to ensure the market is properly informed of the company’s prospects.
ASIC Commissioner, John Price, said there had been a great deal of industry input into the revised guidance.
“ASIC recognises the importance of ensuring all in the industry have a shared understanding of the existing requirements for good disclosure, and this process has provided a valuable opportunity to enable that,” he said.