Over the last four to five years small to mid-cap ASX-listed companies have had to rapidly adapt to the evolving regulatory landscape. And, if recent developments are any guidance, the pressure is not letting up.
One of the key challenges lies in what these companies can or can’t say about their projects as they attempt the transition from explorer, to developer, to producer. With a range of legislative changes, as well as amendments to information sheets, FAQs and Listing Rules released by ASIC and ASX1, listed mining companies face a range of disclosure issues including:
- the degree of project certainty required before a production target and associated financial forecasts (for example, a project ‘NPV’) can be disclosed
- if the requisite project certainty is achieved, how those production targets can be used and the required accompanying cautionary disclosure (especially where the production target is based on a portion of inferred resources or an exploration target)
- what they can and can’t disclose about the content of a scoping study they have spent a considerable amount of shareholder funds on (particularly where no ore reserves have been delineated yet)
- the use of non-JORC terminology (such as the use of the term ‘mining inventory’)
- whether a reasonable basis exists to fund any proposed project’s development (particularly when the cost of development is significantly in excess of the company’s current market capitalisation).