New restrictions on forward looking statements introduced by the Australian Securities and Investments Commission (ASIC) have attracted criticism by junior sector exploration and mining companies.  The Australian (16 May 2016) reported that the Association of Mining and Exploration Companies (AMEC) is preparing to appeal directly to federal Resources Minister Josh Frydenberg for intervention over the regulator’s latest rule changes immediately following the upcoming Federal election.

ASIC last month released new guidelines that restrict what junior exploration companies can say about the economic potential of their discoveries.

AMEC, on behalf of its members, are arguing that the changes will create a less transparent market and make it even harder for explorers to secure funding.

The Australian reported that under the rules, companies are restricted from disclosing project economics to their investors if the company does not have “reasonable grounds” to believe they have funding in place for the project’s development.

That restriction has been seen within the industry as a Catch-22 situation, given the release of the economic potential is a crucial stepping stone in raising both money and market capitalisation.

AIG has consistently advocated that measures which unnecessarily stifle investment in exploration and mining are damaging employment prospects for geoscientists and placing renewal of Australia’s mineral resource project pipeline at risk.  The JORC Code, last revised in December 2012, already provides standards for the content forward looking statements made by exploration and mining companies, intended to ensure appropriate, transparent disclosure of information for the =benefit of investors.

Click here to read The Australian’s report on this issue.

Andrew Waltho
20 May 2016