Digging Deeper: CSA Proposal to Modernize Disclosure Requirements for Mining Issuers and Government of Canada Proposal to Extend Mineral Exploration Tax Credit

Early 2025 saw two major developments in the Canadian mining sector: (i) proposed amendments to National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and its related technical report form and companion policy; and (ii) a proposed extension of the mineral exploration tax credit (“METC”) to March 31, 2027.

1. Proposed Amendments to NI 43-101 and Its Related Form & Companion Policy

On February 13, 2025, the British Columbia Securities Commission (the “BCSC”) posted an information notice (the “Notice”) informing market participants of the Canadian Securities Administrators’ (the “CSA”) initiative to repeal and replace NI 43-101, Form 43-101F1 Technical Report and Companion Policy 43-101CP to NI 43-101 (collectively, the “Proposed Amendments”).

The Proposed Amendments are intended to modernize and streamline Canada’s mining disclosure regime while continuing to protect investors, without imposing undue regulatory burden on market participants. With these goals in mind, the Proposed Amendments primarily:

• remove or replace outdated definitions;
• modernize and streamline certain requirements in line with industry norms;
• remove certain outdated requirements; and
• provide clarification and guidance on certain definitions and requirements.

Although the Notice is not a publication for comment, the BCSC has signaled that the formal CSA Notice and Request for Comment regarding the Proposed Amendments will be published soon, which will invite formal feedback and comments in writing from stakeholders.

Below is a summary of some of the key Proposed Amendments introduced by the BCSC:

(i) Qualified Person

The Proposed Amendments include updates to the “qualified person” definition by:

• removing the educational requirement (due to overlap with professional licensing criteria);
• clarifying that an individual’s experience in the mining industry must be gained after registration as a professional geologist or engineer; and
• specifying the meaning of experience relevant to the subject matter of the mineral project.

The Proposed Amendments also clarify that all disclosure of scientific or technical information must be based on information prepared or approved by a qualified person.

(ii) Foreign Codes

Since 2011, major international mining jurisdictions have harmonized certain mineral reporting definitions to align with those of the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”). The Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) is the Canadian member of CRIRSCO. NI 43-101 currently incorporates by reference certain CIM definitions and permits foreign issuers to refer to similar definitions in their jurisdictions that are comparable to their CIM counterparts.

Given the similarity of CIM definition standards with those of other jurisdictions, the Proposed Amendments no longer allow issuers to rely on foreign codes. All technical report disclosure will require disclosure aligned with CIM definitions, which will include new CIM definitions such as “scoping study”, “exploration target” and “life of mine”.

(iii) Royalty Issuer Technical Reports

Currently, issuers with only a royalty interest in a mineral project are required to file a technical report. Due to lack of access and verification issues, among others, the Proposed Amendments remove the requirement for a royalty-only issuer to file a technical report.

(iv) Environmental and Social Issues

In recent years, the CSA have become increasingly aware of environmental and social issues related to mineral projects. This heightened awareness has not been reflected in the current disclosure requirements, which have remained largely unchanged since 2001. The Proposed Amendments update certain terminology to better align with modern realities, including the use of the broad term “rightsholders” as opposed to “local” and “social and community impact.”

(v) Indigenous Peoples, Rightsholders and Communities

Following feedback and consultation with Indigenous communities, the Proposed Amendments will now require disclosure in a technical report specifically regarding permits, agreements and negotiations with Indigenous Peoples, rightsholders or communities concerning the mineral project. The CSA believe this disclosure is relevant for investors to fully understand the risks and uncertainties of a mineral project. The CSA have emphasized that issuers are still required to disclose all material information to investors, irrespective of other specific disclosure requirements contained in the Proposed Amendments.

(vi) Personal Inspection Requirement

The Proposed Amendments introduce new disclosure requirements related to the current personal inspection of a mineral property by a qualified person. Additionally, current regulations allow a deferral of the personal inspection due to seasonal weather conditions. Due to its lack of use and other non-compliance concerns, the Proposed Amendments eliminate the ability to defer a personal inspection and reinforce the requirement that at least one qualified person must conduct such an inspection before the filing of a technical report.

(vii) Mineral Resource Disclosure

In recent years, the CSA have aimed to improve the accuracy of mineral resource estimates given their importance in the economic analysis of a mineral project. The Proposed Amendments aim to further this effort by codifying the current industry practice and requiring:

• information about how reasonable prospects for eventual economic extraction were determined;
• enhanced disclosure about the classification of mineral resource estimates;
• the issuer’s attributable percentage of resources for fractional ownerships; and
• project-specific risk disclosure requirements for mineral resources estimates.

(viii) Adjacent Properties

Disclosure about adjacent properties to a mineral project is often used by issuers for promotional purposes in both technical reports and other documents, including press releases. Due to the potential risk involved with reliance on such statements, the Proposed Amendments require cautionary statements to be included, indicating that such information is not necessarily indicative of mineralization on the issuer’s mineral project.

(ix) Data Verification

The CSA have raised concerns regarding inadequate disclosure of data verification at each development stage of a mineral project, including exploration, drilling and resource estimation. Previously, many qualified persons applied data verification only to several aspects of a mineral project notably, exploration and drilling activities. The Proposed Amendments require specific disclosure about the data verification performed by qualified persons for each item of a technical report.

(x) Disclaimers

NI 43-101 limits disclaimers in technical reports. The CSA have raised concerns about the inappropriate use of disclaimers previously used by issuers in other disclosure documents. As such, the Proposed Amendments specify that an issuer’s disclosure cannot include any disclaimer of scientific or technical information.

(xi) Written Disclosure and Material Mineral Projects

Under current regulations, prescribed requirements for written disclosure apply only to an issuer’s material mineral projects. The CSA aim to change this requirement to better align with current industry practice and ensure consistent investor disclosure. The Proposed Amendments broaden the prescribed requirements for written disclosure of non-material mineral projects, including information in relation to data verification, exploration information and mineral resources and mineral reserves.

2. Extension of Mineral Exploration Tax Credit

On March 3, 2025, the Department of Finance announced its intention to extend the 15% METC available to investors in flow-through shares by two years, until March 31, 2027. The METC is a tax credit that assists companies in raising capital for mineral exploration by enhancing the tax deduction already available to flow-through shareholders.

It is worthwhile to note that, in recent years, the federal government has also promoted a new 30% Critical Mineral Exploration Tax Credit (“CMETC”) focused on certain specific minerals, which may potentially divert the federal government’s focus away from the METC.

The METC is scheduled to expire on March 31, 2025. Although the proposed extension was announced by the federal government on March 3, 2025, it has yet to be introduced as formal legislation. With a federal election scheduled for April 28, 2025, there is a possibility that a new government may not uphold the proposal of the prior government. However, given that the METC has been continuously renewed under both Liberal and Conservative governments for over two decades since its inception, there is little indication that it will fail to be renewed once again. Assuming formal enactment of the METC extension, both the METC and CMETC will expire on March 31, 2027, unless further renewed.

Conclusion

The Proposed Amendments represent a positive step forward in modernizing Canada’s mining disclosure requirements, aligning them more closely with global standards. These efforts have the potential to solidify Canada’s position as a leading mining jurisdiction while ensuring the protection of all relevant stakeholders. As the Proposed Amendments move forward and formal feedback from stakeholders is requested by the CSA, their final form will likely continue to reflect the evolving needs of the industry, setting the stage for a more globally competitive mining sector in Canada.

The proposed extension of the METC until March 31, 2027 offers a vital boost for Canadian mining companies by maintaining access to critical funding for early-stage exploration projects. This support fosters job creation, economic growth and sustained investment in the mining sector. While the shorter two-year renewal—compared to the five-year extension in 2019—adds some uncertainty as shorter timeframes can complicate long-term planning and capital commitments, the METC remains a key incentive for the mining sector. It works in tandem with programs like the CMETC to strengthen Canada’s resource development and global competitiveness.

If you have any questions regarding the changes discussed above, please contact Charlie Malone at [email protected], Michael Rennie at [email protected], Natalie Tershakowec at [email protected], Marija Tasevska (tax) at [email protected] or any other member of Wildeboer Dellelce LLP. The authors gratefully acknowledge the assistance of articling student Jason Kim in the preparation of this update.

This update is intended as a summary only and should not be regarded or relied upon as advice to any specific client or regarding any specific situation.

If you would like further information regarding the issues discussed in this update or if you wish to discuss any aspect of this commentary, please feel free to contact us.