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16-349MR ASIC clarifies guidance for forward-looking statements in the mining and resources industry
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's 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.
Revised INFO 214 incorporates some minor drafting changes to clarify our guidance. The changes have been made in response to concerns and misunderstandings that arose at the time of INFO 214's original release in April.
We believe the revised guidance now provides companies with sufficient guidance and information to enable them to fully comply with their legal requirements.
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 thanked the Joint Ore Reserves Committee, the VALMIN Committee, the Association of Mining and Exploration Companies and the Australian Securities Exchange for participating in discussions that have led to 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.
'Australia's mining industry has a world-recognised reputation for good operational and corporate practice - not least as a result of the JORC disclosure rules of more than 40 years' standing.
'ASIC looks forward to working with the industry to maintain our market's reputation.'