Learn why NI 43-101 became the dominant mineral reporting standard - how Canadian stock market rules, junior mining investment, and flexible disclosure requirements drove its global adoption over stricter US SEC regulations.
Video transcription
Why Is NI 43-101 More Popular Than Other Reporting Standards?
The reason NI 43-101 became so widely adopted comes down to one thing - how stock markets regulate mineral disclosure.
The United States has the SEC rules, and they are very strict. You cannot include inferred resources in the report. There are very strict restrictions on what technical statements are allowed. Mining investors didn't find that justified, and they found that the rules in Canada were more suitable for the mining industry.
How Canadian Stock Market Rules Favor Mining Investment
In other words, if you compare the rules and regulations of the stock market in the US and in Canada, Canada allows for a little bit more room for speculation. Investors who look at the mining market a little bit like buying a lottery ticket were more comfortable with that approach.
Australia is very similar to what Canada has in terms of stock market rules and regulations. London is also very important. So those are the key markets where mining companies could find investment - Canada, Australia, London, and New York.
Why Large and Junior Mining Companies Choose Different Stock Exchanges
London and New York stock markets are usually historically for large companies - very large companies. They have strict rules that do not allow many technical statements that are permitted in Canada and Australia.
The large companies that have income from large mines are comfortable sitting on the stock markets in New York and in London.
So this is how the financial market for mining was split, and it still is split today. Companies that have mines in Peru, in Africa, everywhere come to the New York and London stock exchanges if they have a big mine or a large mining company. They go to Australia and Canada if they have a smaller mine, junior mining operations, and so on.
Canada's Role in Financing Junior Mining Companies
There was a point when NI 43-101 was instituted. Canada, I was told - I don't have the exact numbers and I didn't verify it - but I was told that 60 to 70% of the mining capital came from the Canadian stock market. Canada was making a significant contribution to financing junior mining companies.
So NI 43-101 became very important precisely because of that - the sheer volume of mining investment flowing through Canada's capital markets made its reporting standard the de facto global benchmark.