attractive the current disclosure requirements under foreign
jurisdictions, such as Canada's NI 43-101 or Australia's JORC. However,
the commenter also indicated that, if the Commission were to adopt
amendments that aligned with Canada's NI 43-101, there would be a
significant number of small entities that would choose to list in the
United States. We have considered these comments when revising the
proposed amendments to more closely align with CRIRSCO's standards,
including Canada's NI 43-101.
---------------------------------------------------------------------------

    \1434\ See letter from SRK 1.
---------------------------------------------------------------------------

    Although not specifically addressing the IRFA, other commenters
indicated that the proposed rules would impose the greatest
proportionate compliance burden on small entities. For example, one
commenter stated that, because the proposed rules would require the
disclosure of voluminous amounts of information, they would discourage
many companies from seeking or maintaining a public listing, and that
this effect would be most acute for smaller companies that lack the
internal resources to compile and report on all the proposed required
information.\1435\ This commenter further stated that smaller companies
would be placed at a significant competitive disadvantage if they were
required to disclose sensitive operational information to larger
competitors.\1436\
---------------------------------------------------------------------------

    \1435\ See, e.g. letter from NSSGA.
    \1436\ See id.
---------------------------------------------------------------------------

    Other commenters stated that the proposed requirement to obtain a
technical report summary for material mining properties would be
especially burdensome for smaller entities, but that the Commission
could alleviate this burden by adopting certain measures, such as by
not requiring the filing of the technical report summary more
frequently than under the CRIRSCO-based codes, not requiring the
disclosure of exploration results, or minimizing the required use of an
independent qualified person.\1437\ Another commenter maintained that
the proposed requirement to quantify the percentage of inferred mineral
resources that would likely be converted to indicated mineral resources
would be difficult for smaller entities to meet.\1438\ As discussed
below, we have considered all of these comments when evaluating
alternatives to, and revising, the proposed rules.\1439\
---------------------------------------------------------------------------

    \1437\ See, e.g., letters from AngloGold, Eggleston and Gold
Resource.
    \1438\ See letter from MMSA.
    \1439\ See infra Section VI.F.
---------------------------------------------------------------------------

C. Small Entities Subject to the Final Rules

    The final rules will affect small entities that have material
mining operations, and which file registration statements under Section
6 of the Securities Act \1440\ or Section 12 of the Exchange Act, and
reports under Section 13(a) or 15(d) of the Exchange Act. For purposes
of the RFA, under our rules, an issuer, other than an investment
company, is a ``small business'' or ``small organization'' if it has
total assets of $5 million or less as of the end of its most recent
fiscal year and is engaged or proposing to engage in an offering of
securities that does not exceed $5 million.\1441\ From staff review of
Securities Act and Exchange Act filings made by registrants with mining
operations from January 2016 through December 2017, we estimate that
there are approximately 114 issuers that may be considered small
entities.\1442\ One of those small entities was a filer of a Form 1-A
offering statement.
---------------------------------------------------------------------------

    \1440\ 15 U.S.C. 77f.
    \1441\ See 17 CFR 230.157 [Securities Act Rule 157]; and 17 CFR
240.0-10(a) [Exchange Act Rule 0-10(a)].
    \1442\ See supra Section IV.A.1. for a discussion of how the
staff estimated the number of registrants, including small entities,
that will be subject to the final rules.
---------------------------------------------------------------------------

D. Reporting, Recordkeeping, and Other Compliance Requirements

    As described in greater detail above, the final rules will enhance
the Securities Act and Exchange Act disclosure requirements of
registrants, including small entities, with material mining operations
by requiring:

     The disclosure of estimates and other information about
determined mineral resources and exploration results that are
material to investors in addition to mineral reserves;
     the disclosure of exploration results, mineral
resources and mineral reserves in Commission filings to be based on
and accurately reflect information and supporting documentation
prepared by a qualified person; and
     the filing of a technical report summary prepared by a
qualified person for each material property for certain Commission
filings.

    The final rules also will codify certain existing disclosure
policies for registrants with material mining operations, including
small entities. The same mining disclosure requirements will apply to
both U.S. and foreign registrants.\1443\ The professional skills

necessary to comply with the final rules include legal, accounting, and
information technology skills. In addition, the final rules require the
involvement of qualified persons with certain specified credentials and
relevant experience.\1444\
---------------------------------------------------------------------------

    \1443\ The final rules are discussed in detail in Section II,
supra. We discuss the economic impact, including the estimated
compliance costs and burdens, of the final rules in Section IV
(Economic Analysis) and Section V (Paperwork Reduction Act), supra.
    \1444\ See supra Section II.C.
---------------------------------------------------------------------------

E. Duplicative, Overlapping or Conflicting Federal Rules

    As noted above, the final rules will generally establish new mining
disclosure requirements that we believe will not duplicate or overlap
with other federal rules. The final rules will consolidate and codify
all of the Commission's mining property disclosure requirements and
policies, which currently exist in Item 102 of Regulation S-K and in
Guide 7, the status and overlapping structure of which has caused some
uncertainty for mining registrants.\1445\ We believe that this
consolidation and codification will help a mining registrant, including
a small entity, comply with its disclosure obligations under the
Securities Act and Exchange Act, which could mitigate its reporting
burden. The final rules also will more closely align our mining
property disclosure requirements with global industry practices and
standards, which should also mitigate a registrant's, including a small
entity's, reporting burden to the extent that it is already subject to
one or more of the CRIRSCO-based codes. We do not believe that the
final rules will conflict with other federal rules.
---------------------------------------------------------------------------

    \1445\ See supra note 28 and accompanying text.
---------------------------------------------------------------------------

F. Agency Action To Minimize Effect on Small Entities

    The Regulatory Flexibility Act directs us to consider significant
alternatives that would accomplish the stated objectives, while
minimizing any significant adverse impact on small entities. In
connection with adopting the final rules, we considered, as
alternatives: Establishing different compliance or reporting
requirements that take into account the resources available to smaller
entities; exempting smaller entities from coverage of the disclosure
requirements, or any part thereof; clarifying, consolidating, or
simplifying the disclosure requirements for small entities; and using
performance standards rather than design standards.
    Neither the current mining disclosure requirements nor the final
rules exempt or treat differently a small entity with material mining
operations. Providing an exemption for, or imposing less extensive
disclosure requirements on, small entities with material mining
operations would likely increase the risk of inaccurate or incomplete
disclosure concerning those entities' mineral resources, mineral
reserves and exploration results, to the detriment of investors.\1446\
Moreover, as noted above, a primary goal of the final rules is
generally to align the Commission's mining disclosure regime with the
standards that have developed under the CRIRSCO-based codes so that
investors will have a more complete understanding of a registrant's
mining operations and be able to make more informed investment
decisions. The CRIRSCO-based codes do not provide an exemption for
small entities or otherwise treat such entities differently. Therefore,
we believe it would be inappropriate for our rules to provide an
exemption for, or otherwise treat differently, small entities with
material mining operations.
---------------------------------------------------------------------------

    \1446\ In this regard, only one commenter directly addressed the
IRFA and whether we should adopt alternatives to the proposed rules,
including exempting or treating differently small entities. That
commenter opposed such alternative treatment for small entities,
stating that such alternative treatment would be a disservice to
investors. See letter from SRK 1.
---------------------------------------------------------------------------

    We also note that, because a significant percentage of mining
registrants (approximately 43% based on the staff's most recent review
of Commission filings) \1447\ are small entities, exempting them from
the final rules will effectively disapply the Commission's mining
disclosure regime to a large segment of the companies for which such
disclosure would be potentially beneficial. By exempting small entities
from the final rules, we would be creating a significant gap in the
transparency of registrants' disclosure concerning their mining
properties, which would defeat one of the primary purposes of the final
rules.
---------------------------------------------------------------------------

    \1447\ See supra Section IV.A.1.
---------------------------------------------------------------------------

    In accordance with the Regulatory Flexibility Act, and in response
to commenters' concerns described above, we have considered and adopted
alternatives to several of the proposed disclosure requirements, which
we believe will limit the compliance burden for registrants, including
small entities. For example, the final rules:

     Clarify that a registrant is not required to disclose
exploration results until they become material to investors;
     do not require the filing of a technical report summary
to support the disclosure of exploration results;
     limit the required filing of a technical report summary
that supports the disclosure of determined mineral resources and
reserves to when the registrant first discloses resource or reserve
estimates, or when it discloses a material change in the previously
disclosed estimates;
     eliminate the proposed requirement to quantify the
level of risk concerning mineral resources, including inferred
mineral resources;
     reduce the number of required tables from seven to two,
and permit most of the required disclosure concerning material
mining properties and mineral resources, mineral reserves, and
exploration results to be disclosed in either narrative or tabular
format;
     permit the use of a pre-feasibility study instead of a
final feasibility study without requiring justification for such
use, and even when used for high-risk situations; and
     align our mining property disclosure requirements with
the CRIRSCO standards in many significant respects, such as by
adopting a reasonable and justifiable price standard for the
determination and disclosure of mineral resources and mineral
reserves, which could include a forward-looking price, instead of
the proposed 24-month trailing average price requirement.

    We believe that all of the above revisions to the proposed rules
will limit the final rules' compliance burden for registrants,
including small entities.\1448\ We also believe that certain of these
changes, in particular those regarding the disclosure of exploration
results, will reduce the final rules' potential for the disclosure of
proprietary, commercially sensitive information for registrants,
including small entities.
---------------------------------------------------------------------------

    \1448\ Under the final rules, the qualified person is not
required to be independent of the registrant. As commenters noted,
this approach should also help to limit the compliance burden for
registrants, including small entities. See supra note 1437 and
accompanying text.
---------------------------------------------------------------------------

    As noted above, the final rules will consolidate and codify the
Commission's mining property disclosure rules and policies and thereby
facilitate compliance for all registrants, including small entities. We
have used design rather than performance standards in connection with
the final rules because, based on our past experience, we believe the
final rules will be more beneficial to investors if there are specific
disclosure requirements that are uniform for all registrants with
material mining operations. Nevertheless, we have made revisions to the
proposed rules to make the disclosure requirements less prescriptive
and provide more flexibility in how the required information is
presented, which should help ease the compliance burden associated with
these requirements.

VII. Statutory Authority

    We are adopting the amendments contained in this document pursuant
to Sections 3(b), 7, 10, 19(a), and 28 of the Securities Act and
Sections 3(b), 12, 13, 15(d), 23(a), and 36(a) of the Exchange Act.

List of Subjects

17 CFR Part 229, 17 CFR Part 230, 17 CFR Part 239

    Reporting and recordkeeping requirements, Securities.

17 CFR Part 249

    Brokers, Reporting and recordkeeping requirements, Securities.

    In accordance with the foregoing, title 17, chapter II of the Code
of Federal Regulations is amended as follows:

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K

0
1. The authority citation for part 229 continues to read as follows:

    Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c),
80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350;
sec. 953(b), Pub. L. 111-203, 124 Stat. 1904 (2010); and sec.
102(c), Pub. L. 112-106, 126 Stat. 310 (2012).

0
2. Amend Sec.  229.102 by:
0
a. Removing ``, mines'' in the introductory text;
0
b. Removing the heading ``Instructions to Item 102:'';
0
c. Redesignating Instructions 1, 2, 3, and 4 as ``Instruction 1 to Item
102:'', ``Instruction 2 to Item 102:'', ``Instruction 3 to Item 102:'',
and ``Instruction 4 to Item 102:'';
0
d. Revising newly redesignated Instruction 3 to Item 102;
0
e. Removing Instructions 5 and 7 to Item 102; and
0
f. Redesignating instruction 6 as ``Instruction 5 to Item 102:'' and
Instructions 8 and 9 as ``Instruction 6 to Item 102:'' and
``Instruction 7 to Item 102:'', respectively.
    The revision reads as follows:

Sec.  229.102 (Item 102)  Description of property.

* * * * *
    Instruction 3 to Item 102: Registrants engaged in mining operations
must refer to and, if required, provide the disclosure under Sec. Sec.
229.1300 through 229.1305 (subpart 1300 of Regulation S-K), in addition
to any disclosure required by this section.
* * * * *

0
3. Amend Sec.  229.601 by:
0
a. In the exhibit table in paragraph (a), adding entry (96) and
footnote 7; and
0
b. Adding paragraph (b)(96).
    The additions read as follows:

Sec.  229.601   (Item 601) Exhibits.

    (a) * * *

                                                                      Exhibit Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                            Securities Act Forms                                                          Exchange Act Forms
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 S-4                                   F-4           8-K
                                 S-1     S-3    SF-1    SF-3     \1\     S-8    S-11     F-1    F-3    \1\     10    \2\    10-D   10-Q   10-K   ABS-EE
--------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                      * * * * * * *
(96) Technical report summary  X       X       ......  ......  X       ......  ......  X       X      X      X      .....  .....  .....  X      ........
 \7\.

                                                                      * * * * * * *
--------------------------------------------------------------------------------------------------------------------------------------------------------
 * * * * * * *
\7\ If required pursuant to Sec.   229.1302 (Item 1302 of Regulation S-K).

    (b) * * *
    (96) Technical report summary. (i) A registrant that, pursuant to
Sec. Sec.  229.1300 through 229.1305 (subpart 229.1300 of Regulation S-
K), discloses information concerning its mineral resources or mineral
reserves must file a technical report summary by one or more qualified
persons that, for each material property, identifies and summarizes the
scientific and technical information and conclusions reached concerning
an initial assessment used to support disclosure of mineral resources,
or concerning a preliminary or final feasibility study used to support
disclosure of mineral reserves. At its election, a registrant may also
file a technical report summary from a qualified person that identifies
and summarizes the information reviewed and conclusions reached by the
qualified person about the registrant's exploration results. Please
refer to Sec.  229.1302(b) (Item 1302(b) of Regulation S-K) for when a
registrant must file the technical report summary as an exhibit to its
Securities Act registration statement or Exchange Act registration
statement or report.
    (ii) The technical report summary must not include large amounts of
technical or other project data, either in the report or as appendices
to the report. The qualified person must draft the summary to conform,
to the extent practicable, with the plain English principles set forth
in Sec.  230.421 or Sec.  240.13a-20 of this chapter.
    (iii)(A) A technical report summary that reports the results of a
preliminary or final feasibility study must provide all of the
information specified in paragraph (b)(96)(iii)(B) of this section. A
technical report summary that reports the results of an initial
assessment must, at a minimum, provide the information specified in
paragraphs (b)(96)(iii)(B)(1) through (11) and (20) through (25) of
this section, and may also include the information specified in
paragraph (b)(96)(iii)(B)(19) of this section. A technical report
summary that reports exploration results must, at a minimum, provide
the information specified in paragraphs (b)(96)(iii)(B)(1) through (9)
and (20) through (25) of this section.
    (B) A qualified person must include the following information in
the technical report summary, as required by paragraph (b)(96)(iii)(A)
of this section, to the extent the information is material.
    (1) Executive summary. Briefly summarize the most significant
information in the technical report

summary, including property description (including mineral rights) and
ownership, geology and mineralization, the status of exploration,
development and operations, mineral resource and mineral reserve
estimates, summary capital and operating cost estimates, permitting
requirements, and the qualified person's conclusions and
recommendations. The executive summary must be brief and should not
contain all of the detailed information in the technical support
summary.
    (2) Introduction. Disclose:
    (i) The registrant for whom the technical report summary was
prepared;
    (ii) The terms of reference and purpose for which the technical
report summary was prepared, including whether the technical report
summary's purpose was to report mineral resources, mineral reserves, or
exploration results;
    (iii) The sources of information and data contained in the
technical report summary or used in its preparation, with citations if
applicable;
    (iv) The details of the personal inspection on the property by each
qualified person or, if applicable, the reason why a personal
inspection has not been completed; and
    (v) That the technical report summary updates a previously filed
technical report summary, identified by name and date, when applicable.
    (3) Property description. (i) Describe the location of the
property, accurate to within one mile, using an easily recognizable
coordinate system. The qualified person must provide appropriate maps,
with proper engineering detail (such as scale, orientation, and titles)
to portray the location of the property. Such maps must be legible on
the page when printed.
    (ii) Disclose the area of the property.
    (iii) Disclose the name or number of each title, claim, mineral
right, lease, or option under which the registrant and its subsidiaries
have or will have the right to hold or operate the property. If held by
leases or options, the registrant must provide the expiration dates of
such leases or options and associated payments.
    (iv) Describe the mineral rights, and how such rights have been
obtained at this location, indicating any conditions that the
registrant must meet in order to obtain or retain the property.
    (v) Describe any significant encumbrances to the property,
including current and future permitting requirements and associated
timelines, permit conditions, and violations and fines.
    (vi) Disclose any other significant factors and risks that may
affect access, title, or the right or ability to perform work on the
property.
    (vii) If the registrant holds a royalty or similar interest in the
property, except as provided under Sec. Sec.  229.1303(a)(3) and
229.1304(a)(2), the information in paragraph (b)(96)(iii)(B)(3) of this
section must be provided for the property that is owned or operated by
a party other than the registrant. In this event, for example, the
report must address the documents under which the owner or operator
holds or operates the property, the mineral rights held by the owner or
operator, conditions required to be met by the owner or operator,
significant encumbrances, and significant factors and risks relating to
the property or work on the property.
    (4) Accessibility, climate, local resources, infrastructure and
physiography. Describe:
    (i) The topography, elevation, and vegetation;
    (ii) The means of access to the property, including highways,
towns, rivers, railroads, and airports;
    (iii) The climate and the length of the operating season, as
applicable; and
    (iv) The availability of and required infrastructure, including
sources of water, electricity, personnel, and supplies.
    (5) History. Describe:
    (i) Previous operations, including the names of previous operators,
insofar as known; and
    (ii) The type, amount, quantity, and general results of exploration
and development work undertaken by any previous owners or operators.
    (6) Geological setting, mineralization, and deposit. (i) Describe
briefly the regional, local, and property geology and the significant
mineralized zones encountered on the property, including a summary of
the surrounding rock types, relevant geological controls, and the
length, width, depth, and continuity of the mineralization, together
with a description of the type, character, and distribution of the
mineralization.
    (ii) Each mineral deposit type that is the subject of investigation
or exploration together with the geological model or concepts being
applied in the investigation or forming the basis of the exploration
program.
    (iii) The qualified person must include at least one stratigraphic
column and one cross-section of the local geology to meet the
requirements of paragraph (b)(96)(iii)(B)(6) of this section.
    (7) Exploration. Describe the nature and extent of all relevant
exploration work, conducted by or on behalf of, the registrant.
    (i) For all exploration work other than drilling, describe: The
procedures and parameters relating to the surveys and investigations;
the sampling methods and sample quality, including whether the samples
are representative, and any factors that may have resulted in sample
biases; the location, number, type, nature, and spacing or density of
samples collected, and the size of the area covered; and the
significant results of and the qualified person's interpretation of the
exploration information.
    (ii) For drilling, describe: The type and extent of drilling
including the procedures followed; any drilling, sampling, or recovery
factors that could materially affect the accuracy and reliability of
the results; and the material results and interpretation of the
drilling results. For a technical report summary to support disclosure
of exploration results, the qualified person must provide information
on all samples or drill holes to meet the requirements of this
paragraph. If some information is excluded, the qualified person must
identify the omitted information and explain why that information is
not material.
    (iii) For characterization of hydrogeology, describe: The nature
and quality of the sampling methods used to acquire data on surface and
groundwater parameters; the type and appropriateness of laboratory
techniques used to test for groundwater flow parameters such as
permeability, and include discussions of the quality control and
quality assurance procedures; results of laboratory testing and the
qualified person's interpretation, including any material assumptions,
which must include descriptions of permeable zones or aquifers, flow
rates, in-situ saturation, recharge rates and water balance; and the
groundwater models used to characterize aquifers, including material
assumptions used in the modeling.
    (iv) For geotechnical data, testing and analysis, describe: The
nature and quality of the sampling methods used to acquire geotechnical
data; the type and appropriateness of laboratory techniques used to
test for soil and rock strength parameters, including discussions of
the quality control and quality assurance procedures; and results of
laboratory testing and the qualified person's interpretation, including
any material assumptions.
    (v) Reports must include a plan view of the property showing
locations of all drill holes and other samples.

    (vi) The technical report summary must include a description of
data concerning drilling, hydrogeology, or geotechnical data only to
the extent such data is relevant and available.
    Instruction 1 to paragraph (b)(96)(iii)(B)(7): The technical report
summary must comply with all disclosure standards for exploration
results under Sec. Sec.  229.1300 through 229.1305 (subpart 229.1300 of
Regulation S-K).
    Instruction 2 to paragraph (b)(96)(iii)(B)(7): For a technical
report summary to support disclosure of mineral resources or mineral
reserves, the qualified person can meet the requirements of paragraph
(b)(96)(iii)(B)(7)(ii) of this section by providing sampling (including
drilling) plans, representative plans, and cross-sections of results.
    Instruction 3 to paragraph (b)(96)(iii)(B)(7): If disclosing an
exploration target, provide such disclosure in a subsection of the
Exploration section of the technical report summary that is clearly
captioned as a discussion of an exploration target. That section must
include all of the disclosure required under Sec.  229.1302(c).
    (8) Sample preparation, analyses, and security. Describe:
    (i) Sample preparation methods and quality control measures
employed prior to sending samples to an analytical or testing
laboratory, sample splitting and reduction methods, and the security
measures taken to ensure the validity and integrity of samples;
    (ii) Sample preparation, assaying and analytical procedures used,
the name and location of the analytical or testing laboratories, the
relationship of the laboratory to the registrant, and whether the
laboratories are certified by any standards association and the
particulars of such certification;
    (iii) The nature, extent, and results of quality control procedures
and quality assurance actions taken or recommended to provide adequate
confidence in the data collection and estimation process;
    (iv) The adequacy of sample preparation, security, and analytical
procedures, in the opinion of the qualified person; and
    (v) If the analytical procedures used are not part of conventional
industry practice, a justification by the qualified person for why he
or she believes the procedure is appropriate in this instance.
    (9) Data verification. Describe the steps taken by the qualified
person to verify the data being reported on or which is the basis of
this technical report summary, including:
    (i) Data verification procedures applied by the qualified person;
    (ii) Any limitations on or failure to conduct such verification,
and the reasons for any such limitations or failure; and
    (iii) The qualified person's opinion on the adequacy of the data
for the purposes used in the technical report summary.
    (10) Mineral processing and metallurgical testing. Describe:
    (i) The nature and extent of the mineral processing or
metallurgical testing and analytical procedures;
    (ii) The degree to which the test samples are representative of the
various types and styles of mineralization and the mineral deposit as a
whole;
    (iii) The name and location of the analytical or testing
laboratories, the relationship of the laboratory to the registrant,
whether the laboratories are certified by any standards association and
the particulars of such certification;
    (iv) The relevant results including the basis for any assumptions
or predictions about recovery estimates. Discuss any processing factors
or deleterious elements that could have a significant effect on
potential economic extraction; and
    (v) The adequacy of the data for the purposes used in the technical
report summary, in the opinion of the qualified person. If the
analytical procedures used in the analysis are not part of conventional
industry practice, the qualified person must state so and provide a
justification for why he or she believes the procedure is appropriate
in this instance.
    (11) Mineral resource estimates. If this item is included, the
technical report summary must:
    (i) Describe the key assumptions, parameters, and methods used to
estimate the mineral resources, in sufficient detail for a reasonably
informed person to understand the basis for and how the qualified
person estimated the mineral resources. The technical report summary
must include mineral resource estimates at a specific point of
reference selected by the qualified person. The selected point of
reference must be disclosed in the technical report summary;
    (ii) Provide the qualified person's estimates of mineral resources
for all commodities, including estimates of quantities, grade or
quality, cut-off grades, and metallurgical or processing recoveries.
Unless otherwise stated, cut-off grades also refer to net smelter
returns, pay limits, and other similar terms. The qualified person
preparing the mineral resource estimates must round off, to appropriate
significant figures chosen to reflect order of accuracy, any estimates
of quantity and grade or quality. If the qualified person chooses to
disclose mineral resources inclusive of mineral reserves, he or she
must also clearly state the mineral resources exclusive of mineral
reserves in the technical report summary;
    (iii) Include the qualified person's estimates of cut-off grades
based on assumed costs for surface or underground operations and
commodity prices that provide a reasonable basis for establishing the
prospects of economic extraction for mineral resources. The qualified
person must disclose the price used for each commodity and explain,
with particularity, his or her reasons for using the selected price,
including the material assumptions underlying the selection. This
explanation must include disclosure of the time frame used to estimate
the commodity price and unit costs for cut-off grade estimation and the
reasons justifying the selection of that time frame. The qualified
person may use a price set by contractual arrangement, provided that
such price is reasonable, and the qualified person discloses that he or
she is using a contractual price when disclosing the price used;
    (iv) Provide the qualified person's classification of mineral
resources into inferred, indicated, and measured mineral resources in
accordance with Sec.  229.1302(d)(1)(iii)(A) (Item 1302(d)(1)(iii)(A)
of Regulation S-K). The qualified person must disclose the criteria
used to classify a resource as inferred, indicated, or measured and
must justify the classification;
    (v) Discuss the uncertainty in the estimates of inferred,
indicated, and measured mineral resources, and explain the sources of
uncertainty and how they were considered in the uncertainty estimates.
The qualified person must consider all sources of uncertainty
associated with each class of mineral resources. Sources of uncertainty
that affect such reporting of uncertainty include sampling or drilling
methods, data processing and handling, geologic modeling, and
estimation. The qualified person must support the disclosure of
uncertainty associated with each class of mineral resources with a list
of all factors considered and explain how those factors contributed to
the final conclusion about the level of uncertainty underlying the
resource estimates. The qualified person is not required to use
estimates of confidence limits derived from geostatistics or other
numerical methods to support the disclosure of uncertainty surrounding

mineral resource classification. If the qualified person chooses to use
confidence limit estimates from geostatistics or other numerical
methods, he or she should consider the limitations of these methods and
adjust the estimates appropriately to reflect sources of uncertainty
that are not accounted for by these methods;
    (vi) When reporting the grade or quality for a multiple commodity
mineral resource as metal or mineral equivalent, disclose the
individual grade of each metal or mineral and the commodity prices,
recoveries, and any other relevant conversion factors used to estimate
the metal or mineral equivalent grade; and
    (vii) Provide the qualified person's opinion on whether all issues
relating to all relevant technical and economic factors likely to
influence the prospect of economic extraction can be resolved with
further work.
    Instruction 1 to paragraph (b)(96)(iii)(B)(11): The technical
report summary must comply with all disclosure standards for mineral
resources under Sec. Sec.  229.1300 through 229.1305 (subpart 229.1300
of Regulation S-K).
    Instruction 2 to paragraph(b)(96)(iii)(B)(11): Sections 229.1303
and 229.1304 (Items 1303 and 1304 of Regulation S-K) notwithstanding,
in this technical report summary, mineral resource estimates may be
inclusive of mineral reserves so long as this is clearly stated with
equal prominence to the rest of the item.
    (12) Mineral reserve estimates. If this item is included, the
technical report summary must:
    (i) Describe the key assumptions, parameters, and methods used to
estimate the mineral reserves, in sufficient detail for a reasonably
informed person to understand the basis for converting, and how the
qualified person converted, indicated and measured mineral resources
into the mineral reserves. The technical report summary must include
mineral reserve estimates at a specific point of reference selected by
the qualified person. The qualified person must disclose the selected
point of reference in the technical report summary;
    (ii) Provide the qualified person's estimates of mineral reserves
for all commodities, including estimates of quantities, grade or
quality, cut-off grades, and metallurgical or processing recoveries.
The qualified person preparing the mineral resource estimates must
round off, to appropriate significant figures chosen to reflect order
of accuracy, any estimates of quantity and grade or quality;
    (iii) Include the qualified person's estimates of cut-off grades
based on detailed cut-off grade analysis that includes a long term
price that provides a reasonable basis for establishing that the
project is economically viable. The qualified person must disclose the
price used for each commodity and explain, with particularity, his or
her reasons for using the selected price, including the material
assumptions underlying the selection. This explanation must include
disclosure of the time frame used to estimate the price and costs and
the reasons justifying the selection of that time frame. The qualified
person may use a price set by contractual arrangement, provided that
such price is reasonable, and the qualified person discloses that he or
she is using a contractual price when disclosing the price used;
    (iv) Provide the qualified person's classification of mineral
reserves into probable and proven mineral reserves in accordance with
Sec.  229.1302(e)(2) (Item 1302(e)(2) of Regulation S-K);
    (v) When reporting the grade or quality for a multiple commodity
mineral reserve as metal or mineral equivalent, disclose the individual
grade of each metal or mineral and the commodity prices, recoveries,
and any other relevant conversion factors used to estimate the metal or
mineral equivalent grade; and
    (vi) Provide the qualified person's opinion on how the mineral
reserve estimates could be materially affected by risk factors
associated with or changes to any aspect of the modifying factors.
    Instruction 1 to paragraph (b)(96)(iii)(B)(12): The technical
report summary must comply with all disclosure standards for mineral
reserves under Sec. Sec.  229.1300 through 1305 (subpart 229.1300 of
Regulation S-K).
    (13) Mining methods. Describe the current or proposed mining
methods and the reasons for selecting these methods as the most
suitable for the mineral reserves under consideration. Include:
    (i) Geotechnical and hydrological models, and other parameters
relevant to mine designs and plans;
    (ii) Production rates, expected mine life, mining unit dimensions,
and mining dilution and recovery factors;
    (iii) Requirements for stripping, underground development, and
backfilling;
    (iv) Required mining equipment fleet and machinery, and personnel;
and
    (v) At least one map of the final mine outline.
    (14) Processing and recovery methods. Describe the current or
proposed mineral processing methods and the reasons for selecting these
methods as the most suitable for extracting the valuable products from
the mineralization under consideration. Include:
    (i) A description or flow sheet of any current or proposed process
plant;
    (ii) Plant throughput and design, equipment characteristics and
specifications;
    (iii) Current or projected requirements for energy, water, process
materials, and personnel; and
    (iv) If the processing method, plant design, or other parameter has
never been used to commercially extract the valuable product from such
mineralization, a justification by the qualified person for why he or
she believes the approach will be successful in this instance.
    Instruction 1 to paragraph (b)(96)(iii)(B)(14): If the processing
method, plant design, or other parameter has never been used to
commercially extract the valuable product from such mineralization and
is still under development, then no mineral resources or reserves can
be disclosed on the basis of that method, design, or other parameter.
    (15) Infrastructure. Describe the required infrastructure for the
project, including roads, rail, port facilities, dams, dumps and leach
pads, tailings disposal, power, water, and pipelines, as applicable.
Include at least one map showing the layout of the infrastructure.
    (16) Market studies. Describe the market for the products of the
mine, including justification for demand or sales over the life of the
mine (or length of cash flow projections). Include:
    (i) Information concerning markets for the property's production,
including the nature and material terms of any agency relationships and
the results of any relevant market studies, commodity price
projections, product valuation, market entry strategies, and product
specification requirements; and
    (ii) Descriptions of all material contracts required for the issuer
to develop the property, including mining, concentrating, smelting,
refining, transportation, handling, hedging arrangements, and forward
sales contracts. State which contracts have been executed and which are
still under negotiation. For all contracts with affiliated parties,
discuss whether the registrant obtained the same terms, rates or
charges as could be obtained had the contract been negotiated at arm's
length with an unaffiliated third party.

    (17) Environmental studies, permitting, and plans, negotiations, or
agreements with local individuals or groups. Describe the factors
pertaining to environmental compliance, permitting, and local
individuals or groups, which are related to the project. Include:
    (i) The results of environmental studies (e.g., environmental
baseline studies or impact assessments);
    (ii) Requirements and plans for waste and tailings disposal, site
monitoring, and water management during operations and after mine
closure;
    (iii) Project permitting requirements, the status of any permit
applications, and any known requirements to post performance or
reclamation bonds;
    (iv) Plans, negotiations, or agreements with local individuals or
groups;
    (v) Mine closure plans, including remediation and reclamation
plans, and the associated costs;
    (vi) The qualified person's opinion on the adequacy of current
plans to address any issues related to environmental compliance,
permitting, and local individuals or groups; and
    (vii) Descriptions of any commitments to ensure local procurement
and hiring.
    (18) Capital and operating costs. (i) Provide estimates of capital
and operating costs, with the major components set out in tabular form.
Explain and justify the basis for the cost estimates including any
contingency budget estimates. State the accuracy level of the capital
and operating cost estimates.
    (ii) To assess the accuracy of the capital and operating cost
estimates, the qualified person must take into account the risks
associated with the specific engineering estimation methods used to
arrive at the estimates. As part of this analysis, the qualified person
must take into consideration the accuracy of the estimation methods in
prior similar environments. The accuracy of capital and operating cost
estimates must comply with Sec.  229.1302 (Item 1302 of Regulation S-
K).
    (19) Economic analysis. (i) Describe the key assumptions,
parameters, and methods used to demonstrate economic viability, and
provide all material assumptions including discount rates, exchange
rates, commodity prices, and taxes, royalties, and other government
levies or interests applicable to the mineral project or to production,
and to revenues or income from the mineral project.
    (ii) Disclose the results of the economic analysis, including
annual cash flow forecasts based on an annual production schedule for
the life of project, and measures of economic viability such as net
present value (NPV), internal rate of return (IRR), and payback period
of capital.
    (iii) Include sensitivity analysis results using variants in
commodity price, grade, capital and operating costs, or other
significant input parameters, as appropriate, and discuss the impact on
the results of the economic analysis.
    (iv) The qualified person may, but is not required to, include an
economic analysis in an initial assessment. If the qualified person
includes an economic analysis in an initial assessment, the qualified
person must also include a statement, of equal prominence to the rest
of this section, that, unlike mineral reserves, mineral resources do
not have demonstrated economic viability. The qualified person may
include inferred mineral resources in the economic analysis only if he
or she satisfies the conditions set forth in Sec.  229.1302(d)(4)(ii)
(Item 1302(d)(4)(ii) of Regulation S-K).
    (20) Adjacent properties. Where applicable, a qualified person may
include relevant information concerning an adjacent property if:
    (i) Such information was publicly disclosed by the owner or
operator of the adjacent property;
    (ii) The source of the information is identified;
    (iii) The qualified person states that he or she has been unable to
verify the information and that the information is not necessarily
indicative of the mineralization on the property that is the subject of
the technical report summary; and
    (iv) The technical report summary clearly distinguishes between the
information from the adjacent property and the information from the
property that is the subject of the technical report summary.
    (21) Other relevant data and information. Include any additional
information or explanation necessary to provide a complete and balanced
presentation of the value of the property to the registrant.
Information included in this item must comply with Sec. Sec.  229.1300
through 229.1305 (subpart 229.1300 of Regulation S-K).
    (22) Interpretation and conclusions. The qualified person must
summarize the interpretations of and conclusions based on the data and
analysis in the technical report summary. He or she must also discuss
any significant risks and uncertainties that could reasonably be
expected to affect the reliability or confidence in the exploration
results, mineral resource or mineral reserve estimates, or projected
economic outcomes.
    (23) Recommendations. If applicable, the qualified person must
describe the recommendations for additional work with associated costs.
If the additional work program is divided into phases, the costs for
each phase must be provided along with decision points at the end of
each phase.
    (24) References. Include a list of all references cited in the
technical report summary in sufficient detail so that a reader can
locate each reference.
    (25) Reliance on information provided by the registrant. If relying
on information provided by the registrant for matters discussed in the
technical report summary, as permitted under Sec.  229.1302(f), provide
the disclosure required pursuant to Sec.  229.1302(f)(2).
* * * * *

Sec.  229.801   [Amended]

0
4. Amend Sec.  229.801 by removing paragraph (g).

Sec.  229.802   [Amended]

0
5. Amend Sec.  229.802 by removing paragraph (g).

0
6. Add subpart 229.1300 to read as follows:
Subpart 229.1300--Disclosure by Registrants Engaged in Mining
Operations
Sec.
229.1300 (Item 1300) Definitions.
229.1301 (Item 1301) General instructions.
229.1302 (Item 1302) Qualified person, technical report summary, and
technical studies.
229.1303 (Item 1303) Summary disclosure.
229.1304 (Item 1304) Individual property disclosure.
229.1305 (Item 1305) Internal controls disclosure.

Subpart 229.1300--Disclosure by Registrants Engaged in Mining
Operations

Sec.  229.1300   (Item 1300) Definitions.

    As used in this subpart, these terms have the following meanings:
    Adequate geological evidence, when used in the context of mineral
resource determination, means evidence that is sufficient to establish
geological and grade or quality continuity with reasonable certainty.
    Conclusive geological evidence, when used in the context of mineral
resource determination, means evidence that is sufficient to test and
confirm geological and grade or quality continuity.
    Cut-off grade is the grade (i.e., the concentration of metal or
mineral in rock) that determines the destination of the material during
mining. For purposes of establishing ``prospects of economic
extraction,'' the cut-off grade is the grade that distinguishes
material

deemed to have no economic value (it will not be mined in underground
mining or if mined in surface mining, its destination will be the waste
dump) from material deemed to have economic value (its ultimate
destination during mining will be a processing facility). Other terms
used in similar fashion as cut-off grade include net smelter return,
pay limit, and break-even stripping ratio.
    Development stage issuer is an issuer that is engaged in the
preparation of mineral reserves for extraction on at least one material
property.
    Development stage property is a property that has mineral reserves
disclosed, pursuant to this subpart, but no material extraction.
    Economically viable, when used in the context of mineral reserve
determination, means that the qualified person has determined, using a
discounted cash flow analysis, or has otherwise analytically
determined, that extraction of the mineral reserve is economically
viable under reasonable investment and market assumptions.
    Exploration results are data and information generated by mineral
exploration programs (i.e., programs consisting of sampling, drilling,
trenching, analytical testing, assaying, and other similar activities
undertaken to locate, investigate, define or delineate a mineral
prospect or mineral deposit) that are not part of a disclosure of
mineral resources or reserves. A registrant must not use exploration
results alone to derive estimates of tonnage, grade, and production
rates, or in an assessment of economic viability.
    Exploration stage issuer is an issuer that has no material property
with mineral reserves disclosed.
    Exploration stage property is a property that has no mineral
reserves disclosed.
    Exploration target is a statement or estimate of the exploration
potential of a mineral deposit in a defined geological setting where
the statement or estimate, quoted as a range of tonnage and a range of
grade (or quality), relates to mineralization for which there has been
insufficient exploration to estimate a mineral resource.
    Feasibility study is a comprehensive technical and economic study
of the selected development option for a mineral project, which
includes detailed assessments of all applicable modifying factors, as
defined by this section, together with any other relevant operational
factors, and detailed financial analysis that are necessary to
demonstrate, at the time of reporting, that extraction is economically
viable. The results of the study may serve as the basis for a final
decision by a proponent or financial institution to proceed with, or
finance, the development of the project.
    (1) A feasibility study is more comprehensive, and with a higher
degree of accuracy, than a pre-feasibility study. It must contain
mining, infrastructure, and process designs completed with sufficient
rigor to serve as the basis for an investment decision or to support
project financing.
    (2) The confidence level in the results of a feasibility study is
higher than the confidence level in the results of a pre-feasibility
study. Terms such as full, final, comprehensive, bankable, or
definitive feasibility study are equivalent to a feasibility study.
    Final market study is a comprehensive study to determine and
support the existence of a readily accessible market for the mineral.
It must, at a minimum, include product specifications based on final
geologic and metallurgical testing, supply and demand forecasts,
historical prices for the preceding five or more years, estimated long
term prices, evaluation of competitors (including products and
estimates of production volumes, sales, and prices), customer
evaluation of product specifications, and market entry strategies or
sales contracts. The study must provide justification for all
assumptions, which must include assumptions concerning the material
contracts required to develop and sell the mineral reserves.
    Indicated mineral resource is that part of a mineral resource for
which quantity and grade or quality are estimated on the basis of
adequate geological evidence and sampling. The level of geological
certainty associated with an indicated mineral resource is sufficient
to allow a qualified person to apply modifying factors in sufficient
detail to support mine planning and evaluation of the economic
viability of the deposit. Because an indicated mineral resource has a
lower level of confidence than the level of confidence of a measured
mineral resource, an indicated mineral resource may only be converted
to a probable mineral reserve.
    Inferred mineral resource is that part of a mineral resource for
which quantity and grade or quality are estimated on the basis of
limited geological evidence and sampling. The level of geological
uncertainty associated with an inferred mineral resource is too high to
apply relevant technical and economic factors likely to influence the
prospects of economic extraction in a manner useful for evaluation of
economic viability. Because an inferred mineral resource has the lowest
level of geological confidence of all mineral resources, which prevents
the application of the modifying factors in a manner useful for
evaluation of economic viability, an inferred mineral resource may not
be considered when assessing the economic viability of a mining
project, and may not be converted to a mineral reserve.
    Initial assessment is a preliminary technical and economic study of
the economic potential of all or parts of mineralization to support the
disclosure of mineral resources. The initial assessment must be
prepared by a qualified person and must include appropriate assessments
of reasonably assumed technical and economic factors, together with any
other relevant operational factors, that are necessary to demonstrate
at the time of reporting that there are reasonable prospects for
economic extraction. An initial assessment is required for disclosure
of mineral resources but cannot be used as the basis for disclosure of
mineral reserves.
    Investment and market assumptions, when used in the context of
mineral reserve determination, includes all assumptions made about the
prices, exchange rates, interest and discount rates, sales volumes, and
costs that are necessary to determine the economic viability of the
mineral reserves. The qualified person must use a price for each
commodity that provides a reasonable basis for establishing that the
project is economically viable.
    Limited geological evidence, when used in the context of mineral
resource determination, means evidence that is only sufficient to
establish that geological and grade or quality continuity are more
likely than not.
    Material has the same meaning as under Sec.  230.405 or Sec.
240.12b-2 of this chapter.
    Material of economic interest, when used in the context of mineral
resource determination, includes mineralization, including dumps and
tailings, mineral brines, and other resources extracted on or within
the earth's crust. It does not include oil and gas resources resulting
from oil and gas producing activities, as defined in Sec.  210.4-
10(a)(16)(i) of this chapter, gases (e.g., helium and carbon dioxide),
geothermal fields, and water.
    Measured mineral resource is that part of a mineral resource for
which quantity and grade or quality are estimated on the basis of
conclusive geological evidence and sampling. The level of geological
certainty associated with a measured mineral resource is sufficient to
allow a qualified person to apply modifying factors, as defined in this
section, in sufficient detail to

support detailed mine planning and final evaluation of the economic
viability of the deposit. Because a measured mineral resource has a
higher level of confidence than the level of confidence of either an
indicated mineral resource or an inferred mineral resource, a measured
mineral resource may be converted to a proven mineral reserve or to a
probable mineral reserve.
    Mineral reserve is an estimate of tonnage and grade or quality of
indicated and measured mineral resources that, in the opinion of the
qualified person, can be the basis of an economically viable project.
More specifically, it is the economically mineable part of a measured
or indicated mineral resource, which includes diluting materials and
allowances for losses that may occur when the material is mined or
extracted.
    Mineral resource is a concentration or occurrence of material of
economic interest in or on the Earth's crust in such form, grade or
quality, and quantity that there are reasonable prospects for economic
extraction. A mineral resource is a reasonable estimate of
mineralization, taking into account relevant factors such as cut-off
grade, likely mining dimensions, location or continuity, that, with the
assumed and justifiable technical and economic conditions, is likely
to, in whole or in part, become economically extractable. It is not
merely an inventory of all mineralization drilled or sampled.
    Modifying factors are the factors that a qualified person must
apply to indicated and measured mineral resources and then evaluate in
order to establish the economic viability of mineral reserves. A
qualified person must apply and evaluate modifying factors to convert
measured and indicated mineral resources to proven and probable mineral
reserves. These factors include, but are not restricted to: Mining;
processing; metallurgical; infrastructure; economic; marketing; legal;
environmental compliance; plans, negotiations, or agreements with local
individuals or groups; and governmental factors. The number, type and
specific characteristics of the modifying factors applied will
necessarily be a function of and depend upon the mineral, mine,
property, or project.
    Preliminary feasibility study (or pre-feasibility study) is a
comprehensive study of a range of options for the technical and
economic viability of a mineral project that has advanced to a stage
where a qualified person has determined (in the case of underground
mining) a preferred mining method, or (in the case of surface mining) a
pit configuration, and in all cases has determined an effective method
of mineral processing and an effective plan to sell the product.
    (1) A pre-feasibility study includes a financial analysis based on
reasonable assumptions, based on appropriate testing, about the
modifying factors and the evaluation of any other relevant factors that
are sufficient for a qualified person to determine if all or part of
the indicated and measured mineral resources may be converted to
mineral reserves at the time of reporting. The financial analysis must
have the level of detail necessary to demonstrate, at the time of
reporting, that extraction is economically viable.
    (2) A pre-feasibility study is less comprehensive and results in a
lower confidence level than a feasibility study. A pre-feasibility
study is more comprehensive and results in a higher confidence level
than an initial assessment.
    Preliminary market study is a study that is sufficiently rigorous
and comprehensive to determine and support the existence of a readily
accessible market for the mineral. It must, at a minimum, include
product specifications based on preliminary geologic and metallurgical
testing, supply and demand forecasts, historical prices for the
preceding five or more years, estimated long term prices, evaluation of
competitors (including products and estimates of production volumes,
sales, and prices), customer evaluation of product specifications, and
market entry strategies. The study must provide justification for all
assumptions. It can, however, be less rigorous and comprehensive than a
final market study, which is required for a full feasibility study.
    Probable mineral reserve is the economically mineable part of an
indicated and, in some cases, a measured mineral resource.
    Production stage issuer is an issuer that is engaged in material
extraction of mineral reserves on at least one material property.
    Production stage property is a property with material extraction of
mineral reserves.
    Proven mineral reserve is the economically mineable part of a
measured mineral resource and can only result from conversion of a
measured mineral resource.
    Qualified person is an individual who is:
    (1) A mineral industry professional with at least five years of
relevant experience in the type of mineralization and type of deposit
under consideration and in the specific type of activity that person is
undertaking on behalf of the registrant; and
    (2) An eligible member or licensee in good standing of a recognized
professional organization at the time the technical report is prepared.
For an organization to be a recognized professional organization, it
must:
    (i) Be either:
    (A) An organization recognized within the mining industry as a
reputable professional association; or
    (B) A board authorized by U.S. federal, state or foreign statute to
regulate professionals in the mining, geoscience or related field;
    (ii) Admit eligible members primarily on the basis of their
academic qualifications and experience;
    (iii) Establish and require compliance with professional standards
of competence and ethics;
    (iv) Require or encourage continuing professional development;
    (v) Have and apply disciplinary powers, including the power to
suspend or expel a member regardless of where the member practices or
resides; and
    (vi) Provide a public list of members in good standing.
    Relevant experience means, for purposes of determining whether a
party is a qualified person, that the party has experience in the
specific type of activity that the person is undertaking on behalf of
the registrant. If the qualified person is preparing or supervising the
preparation of a technical report concerning exploration results, the
relevant experience must be in exploration. If the qualified person is
estimating, or supervising the estimation of mineral resources, the
relevant experience must be in the estimation, assessment and
evaluation of mineral resources and associated technical and economic
factors likely to influence the prospect of economic extraction. If the
qualified person is estimating, or supervising the estimation of
mineral reserves, the relevant experience must be in engineering and
other disciplines required for the estimation, assessment, evaluation
and economic extraction of mineral reserves.
    (1) Relevant experience also means, for purposes of determining
whether a party is a qualified person, that the party has experience
evaluating the specific type of mineral deposit under consideration
(e.g., coal, metal, base metal, industrial mineral, or mineral brine).
The type of experience necessary to qualify as relevant is a facts and
circumstances determination. For example, experience in a high-nugget,
vein-type mineralization such as tin or tungsten would likely be
relevant

experience for estimating mineral resources for vein-gold
mineralization, whereas experience in a low grade disseminated gold
deposit likely would not be relevant.
    Note 1 to paragraph (1) of the definition of relevant experience:
It is not always necessary for a person to have five years' experience
in each and every type of deposit in order to be an eligible qualified
person if that person has relevant experience in similar deposit types.
For example, a person with 20 years' experience in estimating mineral
resources for a variety of metalliferous hard-rock deposit types may
not require as much as five years of specific experience in porphyry-
copper deposits to act as a qualified person. Relevant experience in
the other deposit types could count towards the experience in relation
to porphyry-copper deposits.
    (2) For a qualified person providing a technical report for
exploration results or mineral resource estimates, relevant experience
also requires, in addition to experience in the type of mineralization,
sufficient experience with the sampling and analytical techniques, as
well as extraction and processing techniques, relevant to the mineral
deposit under consideration. Sufficient experience means that level of
experience necessary to be able to identify, with substantial
confidence, problems that could affect the reliability of data and
issues associated with processing.
    (3) For a qualified person applying the modifying factors, as
defined by this section, to convert mineral resources to mineral
reserves, relevant experience also requires:
    (i) Sufficient knowledge and experience in the application of these
factors to the mineral deposit under consideration; and
    (ii) Experience with the geology, geostatistics, mining, extraction
and processing that is applicable to the type of mineral and mining
under consideration.

Sec.  229.1301   (Item 1301) General instructions.

    (a) As used in this section, the term mining operations includes
operations on all mining properties that a registrant:
    (1) Owns or in which it has, or it is probable that it will have, a
direct or indirect economic interest;
    (2) Operates, or it is probable that it will operate, under a lease
or other legal agreement that grants the registrant ownership or
similar rights that authorize it, as principal, to sell or otherwise
dispose of the mineral; or
    (3) Has, or it is probable that it will have, an associated royalty
or similar right.
    (b) A registrant must provide the disclosure specified in this
subpart if its mining operations are material to its business or
financial condition.
    (c) When determining whether its mining operations are material, a
registrant must:
    (1) Consider both quantitative and qualitative factors, assessed in
the context of the registrant's overall business and financial
condition;
    (2) Aggregate mining operations on all of its mining properties,
regardless of the stage of the mining property, and size or type of
commodity produced, including coal, metalliferous minerals, industrial
materials, and mineral brines; and
    (3) Include, for each property, as applicable, all related
activities from exploration through extraction to the first point of
material external sale, including processing, transportation, and
warehousing.
    (d) Upon a determination that its mining operations are material, a
registrant must provide summary disclosure concerning all of its mining
activities, as specified in Sec.  229.1303, as well as individual
property disclosure concerning each of its mining properties that is
material to its business or financial condition, as specified in Sec.
229.1304. When providing either summary or individual property
disclosure, the registrant:
    (1) Should provide an appropriate glossary if the disclosure
requires the use of technical terms relating to geology, mining or
related matters, which cannot readily be found in conventional
dictionaries;
    (2) Should not include detailed illustrations and technical
reports, full feasibility studies or other highly technical data. The
registrant shall, however, furnish such reports and other material
supplementally to the staff upon request; and
    (3) Should use plain English principles, to the extent practicable,
such as those provided in Sec. Sec.  230.421 and 240.13a-20 of this
chapter, to enhance the readability of the disclosure for investors.

Sec.  229.1302   (Item 1302) Qualified person, technical report
summary, and technical studies.

    (a)(1) A registrant's disclosure of exploration results, mineral
resources, or mineral reserves, as required by Sec. Sec.  229.1303 and
229.1304, must be based on and accurately reflect information and
supporting documentation prepared by a qualified person, as defined in
Sec.  229.1300. As used in this section, the term information includes
the findings and conclusions of a qualified person relating to
exploration results or estimates of mineral resources or mineral
reserves.
    (2) The registrant is responsible for determining that the person
meets the qualifications specified under the definition of qualified
person in Sec.  229.1300, and that the disclosure in the registrant's
filing accurately reflects the information provided by the qualified
person.
    (3) If a registrant has relied on more than one qualified person to
prepare the information and documentation supporting its disclosure of
exploration results, mineral resources, or mineral reserves, the
registrant's responsibilities as specified in this paragraph (a)
pertain to each qualified person.
    (b)(1) The registrant must obtain a dated and signed technical
report summary from the qualified person that, pursuant to Sec.
229.601(b)(96), identifies and summarizes the information reviewed and
conclusions reached by the qualified person about the registrant's
mineral resources or mineral reserves determined to be on each material
property. At its election, the registrant may also obtain a dated and
signed technical report summary from the qualified person that,
pursuant to Sec.  229.601(b)(96), identifies and summarizes the
information reviewed and conclusions reached by the qualified person
about the registrant's exploration results.
    (i) Except as provided in paragraph (b)(1)(ii) of this section, if
more than one qualified person has prepared the technical report
summary, each qualified person must date and sign the technical report
summary. The qualified person's signature must comply with Sec.
230.402(e) or Sec.  240.12b-11(d) of this chapter. The technical report
summary must also clearly delineate the section or sections of the
summary prepared by each qualified person.
    (ii) A third-party firm comprising mining experts, such as
professional geologists or mining engineers, may date and sign the
technical report summary instead of, and without naming, its employee,
member or other affiliated person who prepared the technical report
summary.
    (2)(i) The registrant must file the technical report summary as an
exhibit to the relevant registration statement or other Commission
filing when disclosing for the first time mineral reserves or mineral
resources or when there is a material change in the mineral reserves or
mineral resources from the

last technical report summary filed for the property.
    (ii) If a registrant files a technical report summary to support
the disclosure of exploration results, it must also file a technical
report summary when there is a material change in the exploration
results from the last technical report summary filed for the property.
In each instance, the registrant must file the technical report summary
as an exhibit to the relevant Commission filing.
    (3)(i) A registrant that has a royalty, streaming, or other similar
right is not required to submit a separate technical report summary for
a property that is covered by a current technical report summary filed
by the producing mining registrant. In that situation, the registrant
holding the royalty, streaming, or other similar right should refer to
the producing registrant's previously filed technical report summary in
its filing with the Commission. Such a reference will not be deemed to
incorporate by reference, pursuant to Sec.  230.411 or Sec.  240.12b-23
of this chapter, the previously filed technical report summary into the
royalty company's or other similar company's filing absent an express
statement to so incorporate by reference the previously filed technical
report summary.
    (ii) A registrant that has a royalty, streaming, or other similar
right is not required to file a technical report summary for an
underlying property if the registrant lacks access to the technical
report summary because:
    (A) Obtaining the information would result in an unreasonable
burden or expense; or
    (B) It requested the technical report summary from the owner,
operator, or other person possessing the technical report summary, who
is not affiliated with the registrant, and who denied the request.
    (4)(i) The registrant must obtain the written consent of the
qualified person to the use of the qualified person's name, or any
quotation from, or summarization of, the technical report summary in
the relevant registration statement or report, and to the filing of the
technical report summary as an exhibit to the registration statement or
report.
    (ii) Except as provided in paragraph (b)(4)(iii) of this section,
if more than one qualified person has prepared the technical report
summary, the registrant must obtain the written consent required by
this section from each qualified person pertaining to the particular
section or sections of the technical report summary prepared by each
qualified person.
    (iii) If, pursuant to paragraph (b)(1)(ii) of this section, a
third-party firm has signed the technical report summary, the third-
party firm must provide the written consent. If a qualified person is
an employee or person affiliated with the registrant, the qualified
person must provide the written consent on an individual basis.
    (iv) For Securities Act filings, the registrant must file the
written consent as an exhibit to the registration statement pursuant to
Sec. Sec.  230.436 and 230.601(b)(23) of this chapter. For Exchange Act
reports, the registrant is not required to file the written consent
obtained from the qualified person, but should retain the written
consent for as long as it is relying on the qualified person's
information and supporting documentation for its current estimates
regarding mineral resources, mineral reserves, or exploration results.
    (5) The registrant must state in the filed registration statement
or report whether each qualified person who prepared the technical
report summary is an employee of the registrant. If the qualified
person is not an employee of the registrant, the registrant must name
the qualified person's employer, disclose whether the qualified person
or the qualified person's employer is affiliated with the registrant or
another entity that has an ownership, royalty, or other interest in the
property that is the subject of the technical report summary, and if
affiliated, describe the nature of the affiliation. As used in this
section, affiliate or affiliated has the same meaning as in Sec.
230.405 or Sec.  240.12b-2 of this chapter.
    (6)(i) A qualified person may include in the technical report
summary information and documentation provided by a third-party
specialist who is not a qualified person, as defined in Sec.  229.1300,
such as an attorney, appraiser, and economic or environmental
consultant, upon which the qualified person has relied in preparing the
technical report summary.
    (ii) The qualified person may not disclaim responsibility for any
information or documentation prepared by a third-party specialist upon
which the qualified person has relied, or any part of the technical
report summary based upon or related to that information and
documentation.
    (iii) A registrant is not required to file a written consent of any
third-party specialist upon which a qualified person has relied
pursuant to paragraph (b)(6)(i) of this section.
    (c)(1) A registrant may disclose an exploration target, as defined
in Sec.  229.1300, for one or more of its properties that is based upon
and accurately reflects information and supporting documentation of a
qualified person. The qualified person may include a discussion of an
exploration target in a technical report summary.
    (2) Any disclosure of an exploration target must appear in a
separate section of the Commission filing or technical report summary
that is clearly captioned as a discussion of an exploration target.
That section must include a clear and prominent statement that:
    (i) The ranges of potential tonnage and grade (or quality) of the
exploration target are conceptual in nature;
    (ii) There has been insufficient exploration of the relevant
property or properties to estimate a mineral resource;
    (iii) It is uncertain if further exploration will result in the
estimation of a mineral resource; and
    (iv) The exploration target therefore does not represent, and
should not be construed to be, an estimate of a mineral resource or
mineral reserve.
    (3) Any disclosure of an exploration target must also include:
    (i) A detailed explanation of the basis for the exploration target,
such as the conceptual geological model used to develop the target;
    (ii) An explanation of the process used to determine the ranges of
tonnage and grade, which must be expressed as approximations;
    (iii) A statement clarifying whether the exploration target is
based on actual exploration results or on one or more proposed
exploration programs, which should include a description of the level
of exploration activity already completed, the proposed exploration
activities designed to test the validity of the exploration target, and
the time frame in which those activities are expected to be completed;
and
    (iv) A statement that the ranges of tonnage and grade (or quality)
of the exploration target could change as the proposed exploration
activities are completed.
    (d)(1) A registrant's disclosure of mineral resources under this
subpart must be based upon a qualified person's initial assessment, as
defined in Sec.  229.1300, which includes and supports the qualified
person's determination of mineral resources.
    (i) When determining the existence of a mineral resource, a
qualified person must:
    (A) Be able to estimate or interpret the location, quantity, grade
or quality continuity, and other geological characteristics of the
mineral resource

from specific geological evidence and knowledge, including sampling;
and
    (B) Conclude that there are reasonable prospects for economic
extraction of the mineral resource based on his or her initial
assessment. At a minimum, the initial assessment must include the
qualified person's qualitative evaluation of relevant technical and
economic factors likely to influence the prospect of economic
extraction to establish the economic potential of the mining property
or project.
    (ii) For a material property, the technical report summary
submitted by the qualified person to support a determination of mineral
resources must describe the procedures, findings and conclusions
reached for the initial assessment, as required by Sec.
229.601(b)(96).
    (iii)(A) When determining mineral resources, a qualified person
must subdivide mineral resources, in order of increasing geological
confidence, into inferred, indicated, and measured mineral resources.
    (B) For inferred mineral resources, a qualified person:
    (1) Must have a reasonable expectation that the majority of
inferred mineral resources could be upgraded to indicated or measured
mineral resources with continued exploration; and
    (2) Should be able to defend the basis of this expectation before
his or her peers.
    (iv) The qualified person should refer to Table 1 to paragraph (d)
of this section for the assumptions permitted to be made when preparing
the initial assessment.
    (2) A qualified person must include cut-off grade estimation, based
on assumed unit costs for surface or underground operations and
estimated mineral prices, in the initial assessment. To estimate
mineral prices, the qualified person must use a price for each
commodity that provides a reasonable basis for establishing the
prospects of economic extraction for mineral resources. The qualified
person must disclose the price used and explain, with particularity,
his or her reasons for using the selected price, including the material
assumptions underlying the selection. This explanation must include
disclosure of the time frame used to estimate the commodity price and
unit costs for cut-off grade estimation and the reasons justifying the
selection of that time frame. The qualified person may use a price set
by contractual arrangement, provided that such price is reasonable, and
the qualified person discloses that he or she is using a contractual
price when disclosing the price used. The selected price required by
this section and all material assumptions underlying it must be current
as of the end of the registrant's most recently completed fiscal year.
    (3) The qualified person must provide a qualitative assessment of
all relevant technical and economic factors likely to influence the
prospect of economic extraction to establish economic potential and
justify why he or she believes that all issues can be resolved with
further exploration and analysis. As provided by Table 1 to paragraph
(d) of this section, those factors include, but are not limited to, to
the extent material:
    (i) Site infrastructure (e.g., whether access to power and site is
possible);
    (ii) Mine design and planning (e.g., what is the broadly defined
mining method);
    (iii) Processing plant (e.g., whether all products used in
assessing prospects of economic extraction can be processed with
methods consistent with each other);
    (iv) Environmental compliance and permitting (e.g., what are the
required permits and corresponding agencies and whether significant
obstacles exist to obtaining those permits); and
    (v) Any other reasonably assumed technical and economic factors,
including plans, negotiations, or agreements with local individuals or
groups, which are necessary to demonstrate reasonable prospects for
economic extraction.
    (4)(i) A qualified person may include cash flow analysis in an
initial assessment to demonstrate economic potential. If the qualified
person includes cash flow analysis in the initial assessment, then
operating and capital cost estimates must have an accuracy level of at
least approximately 50% and a contingency level of no
greater than 25%, as provided by Table 1 to paragraph (d) of this
section. The qualified person must state the accuracy and contingency
levels in the initial assessment.
    (ii) If providing an economic analysis in the initial assessment, a
qualified person may include inferred mineral resources in the economic
analysis, provided that the qualified person:
    (A) States with equal prominence to the disclosure of mineral
resource estimates that the assessment is preliminary in nature, it
includes inferred mineral resources that are considered too speculative
geologically to have modifying factors applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that this economic assessment will be realized;
    (B) Discloses the percentage of the mineral resources used in the
cash flow analysis that was classified as inferred mineral resources;
and
    (C) Discloses, with equal prominence, the results of the economic
analysis excluding inferred mineral resources in addition to the
results that include inferred mineral resources.

        Table 1 to Paragraph (d)--Summary Description of Relevant Factors Evaluated in Technical Studies
----------------------------------------------------------------------------------------------------------------
                                                               Preliminary feasibility
           Factors \1\                 Initial assessment               study               Feasibility study
----------------------------------------------------------------------------------------------------------------
Site infrastructure..............  Establish whether or not   Required access roads,    Required access roads,
                                    access to power and site   infrastructure location   infrastructure location
                                    is possible. Assume        and plant area defined.   and plant area
                                    infrastructure location,   Source of all utilities   finalized. Source of
                                    plant area required,       (power, water, etc.)      all required utilities
                                    type of power supply,      required for              (power, water, etc.)
                                    site access roads, and     development and           for development and
                                    camp/town site, if         production defined with   production finalized.
                                    required.                  initial designs           Camp/Town site
                                                               suitable for cost         finalized.
                                                               estimates. Camp/Town
                                                               site finalized.
Mine design & planning...........  Mining method defined      Preferred underground     Mining method finalized.
                                    broadly as surface or      mining method or the      Detailed mine layouts
                                    underground. Production    pit configuration for     finalized for preferred
                                    rates assumed.             surface mine defined.     alternative.
                                                               Detailed mine layouts     Development and
                                                               drawn for each            production plan
                                                               alternative.              finalized for preferred
                                                               Development and           alternative with
                                                               production plan defined   required equipment
                                                               for each alternative      fleet specified.
                                                               with required equipment
                                                               fleet specified.

Processing plant.................  Establish that all         Detailed bench lab tests  Detailed bench lab tests
                                    products used in           conducted. Detailed       conducted. Pilot plant
                                    assessing prospects of     process flow sheet,       test completed, if
                                    economic extraction can    equipment sizes, and      required, based on
                                    be processed with          general arrangement       risk. Process flow
                                    methods consistent with    completed. Detailed       sheet, equipment sizes,
                                    each other. Processing     plant throughput          and general arrangement
                                    method and plant           specified.                finalized. Final plant
                                    throughput assumed.                                  throughput specified.
Environmental compliance &         List of required permits   Identification and        Identification and
 permitting.                        & agencies drawn.          detailed analysis of      detailed analysis of
                                    Determine if significant   environmental             environmental
                                    obstacles exist to         compliance and            compliance and
                                    obtaining permits.         permitting                permitting requirements
                                    Identify pre-mining land   requirements. Detailed    finalized. Completed
                                    uses. Assess               baseline studies with     baseline studies with
                                    requirements for           preliminary impact        final impact assessment
                                    baseline studies. Assume   assessment (internal).    (internal). Tailings
                                    post-mining land uses.     Detailed tailings         disposal, reclamation,
                                    Assume tailings            disposal, reclamation,    and mitigation plans
                                    disposal, reclamation,     and mitigation plans.     finalized.
                                    and mitigation plans.
Other relevant factors \2\.......  Appropriate assessments    Reasonable assumptions,   Detailed assessments of
                                    of other reasonably        based on appropriate      modifying factors
                                    assumed technical and      testing, on the           necessary to
                                    economic factors           modifying factors         demonstrate that
                                    necessary to demonstrate   sufficient to             extraction is
                                    reasonable prospects for   demonstrate that          economically viable.
                                    economic extraction.       extraction is
                                                               economically viable.
Capital costs....................  Optional.\3\ If included:  Accuracy: 25%.                minus>15%.
                                    minus>50%..               Contingency: <=15%......  Contingency: <=10%.
                                   Contingency: <=25%.......
Operating costs..................  Optional.\3\ If included:  Accuracy: 25%.                minus>15%.
                                    minus>50%..               Contingency: <=15%......  Contingency: <=10%.
                                   Contingency: <=25%.......
Economic analysis \4\............  Optional. If included:     Taxes described in        Taxes described in
                                    Taxes and revenues are     detail; revenues are      detail; revenues are
                                    assumed. Discounted cash   estimated based on at     estimated based on at
                                    flow analysis based on     least a preliminary       least a final market
                                    assumed production rates   market study; economic    study or possible
                                    and revenues from          viability assessed by     letters of intent to
                                    available measured and     detailed discounted       purchase; economic
                                    indicated mineral          cash flow analysis.       viability assessed by
                                    resources.                                           detailed discounted
                                                                                cash flow analysis.
----------------------------------------------------------------------------------------------------------------
\1\ When applied in an initial assessment, these factors pertain to the relevant technical and economic factors
  likely to influence the prospect of economic extraction. When applied in a preliminary or final feasibility
  study, these factors pertain to the modifying factors, as defined in this subpart.
\2\ The relevant technical and economic factors to be applied in an initial assessment, and the modifying
  factors to be applied in a pre-feasibility or final feasibility study, include, but are not limited to, the
  factors listed in this table. The number, type, and specific characteristics of the applicable factors will be
  a function of and depend upon the particular mineral, mine, property, or project.
\3\ Initial assessment, as defined in this subpart, does not require a cash flow analysis or operating and
  capital cost estimates. The qualified person may include a cash flow analysis at his or her discretion.
\4\ An initial assessment does not require capital and operating cost estimates or economic analysis, although
  it requires unit cost assumptions based on an assumption that the resource will be exploited with surface or
  underground mining methods. An economic analysis, if included, may be based only on measured and indicated
  mineral resources, or also may include inferred resources if additional conditions are met.

    (e)(1) A registrant's disclosure of mineral reserves under this
subpart must be based upon a qualified person's preliminary feasibility
(pre-feasibility) study or feasibility study, each as defined in Sec.
229.1300, which includes and supports the qualified person's
determination of mineral reserves. The pre-feasibility or feasibility
study must include the qualified person's detailed evaluation of all
applicable modifying factors to demonstrate the economic viability of
the mining property or project. For a material property, the technical
report summary submitted by the qualified person to support a
determination of mineral reserves must describe the procedures,
findings and conclusions reached for the pre-feasibility or feasibility
study, as required by Sec.  229.601(b)(96).
    (2) When determining mineral reserves, a qualified person must
subdivide mineral reserves, in order of increasing confidence, into
probable mineral reserves and proven mineral reserves, as defined in
Sec.  229.1300. The determination of probable or proven mineral
reserves must be based on a qualified person's application of the
modifying factors to indicated or measured mineral resources, which
results in the qualified person's determination that part of the
indicated or measured mineral resource is economically mineable.
    (i) For a probable mineral reserve, the qualified person's
confidence in the results obtained from the application of the
modifying factors and in the estimates of tonnage and grade or quality
is lower than what is sufficient for a classification as a proven
mineral reserve, but is still sufficient to demonstrate that, at the
time of reporting, extraction of the mineral reserve is economically
viable under reasonable investment and market assumptions. The lower
level of confidence is due to higher geologic uncertainty when the
qualified person converts an indicated mineral resource to a probable
reserve or higher risk in the results of the application of modifying
factors at the time when the qualified person converts a measured
mineral resource to a probable mineral reserve. A qualified person must
classify a measured mineral resource as a probable mineral reserve when
his or her confidence in the results obtained from the application of
the modifying factors to the measured mineral resource is lower than
what is sufficient for a proven mineral reserve.
    (ii) For a proven mineral reserve, the qualified person must have a
high degree of confidence in the results obtained from the application
of the modifying factors and in the estimates of tonnage and grade or
quality.

    (3) The pre-feasibility study or feasibility study, which supports
the qualified person's determination of mineral reserves, must
demonstrate that, at the time of reporting, extraction of the mineral
reserve is economically viable under reasonable investment and market
assumptions. The study must establish a life of mine plan that is
technically achievable and economically viable, which will be the basis
of determining the mineral reserve.
    (i) The term mineral reserves does not necessarily require that
extraction facilities are in place or operational, that the company has
obtained all necessary permits or that the company has entered into
sales contracts for the sale of mined products. It does require,
however, that the qualified person has, after reasonable investigation,
not identified any obstacles to obtaining permits and entering into the
necessary sales contracts, and reasonably believes that the chances of
obtaining such approvals and contracts in a timely manner are highly
likely.
    (ii) In certain circumstances, the determination of mineral
reserves may require the completion of at least a preliminary market
study, as defined in Sec.  229.1300, in the context of a pre-
feasibility study, or a final market study, as defined in Sec.
229.1300, in the context of a feasibility study, to support the
qualified person's conclusions about the chances of obtaining revenues
from sales. For example, a preliminary or final market study would be
required where the mine's product cannot be traded on an exchange,
there is no other established market for the product, and no sales
contract exists. When assessing mineral reserves, the qualified person
must take into account the potential adverse impacts, if any, from any
unresolved material matter on which extraction is contingent and which
is dependent on a third party.
    (4) For both a pre-feasibility and feasibility study, a qualified
person must use a price for each commodity that provides a reasonable
basis for establishing that the project is economically viable. The
qualified person must disclose the price used and explain, with
particularity, his or her reasons for using the selected price,
including the material assumptions underlying the selection. This
explanation must include disclosure of the time frame used to estimate
the price and costs and the reasons justifying the selection of that
time frame. The qualified person may use a price set by contractual
arrangement, provided that such price is reasonable, and the qualified
person discloses that he or she is using a contractual price when
disclosing the price used. The selected price required by this section
and all material assumptions underlying it must be current as of the
end of the registrant's most recently completed fiscal year.
    (5) A pre-feasibility study must include an economic analysis that
supports the property's economic viability as assessed by a detailed
discounted cash flow analysis or other similar financial analysis. The
economic analysis must describe in detail applicable taxes and provide
an estimate of revenues. The qualified person must use a price for each
commodity in the economic analysis that meets the requirements of
paragraph (e)(4) of this section. As discussed in paragraph (e)(3) of
this section, in certain situations, estimates of revenues must be
based on at least a preliminary market study.
    (6) The qualified person must exclude inferred mineral resources
from the pre-feasibility study's demonstration of economic viability in
support of a disclosure of a mineral reserve.
    (7) Factors to be considered in a pre-feasibility study are
typically the same as those required for a final feasibility study, but
considered at a lower level of detail or at an earlier stage of
development. The list of factors is not exclusive. For example, as
provided in Table 1 to paragraph (d) of this section, a pre-feasibility
study must define, analyze or otherwise address in detail, to the
extent material:
    (i) The required access roads, infrastructure location and plant
area, and the source of all utilities (e.g., power and water) required
for development and production;
    (ii) The preferred underground mining method or surface mine pit
configuration, with detailed mine layouts drawn for each alternative;
    (iii) The bench lab tests that have been conducted, the process
flow sheet, equipment sizes, and general arrangement that have been
completed, and the plant throughput;
    (iv) The environmental compliance and permitting requirements, the
baseline studies, and the plans for tailings disposal, reclamation, and
mitigation, together with an analysis establishing that permitting is
possible; and
    (v) Any other reasonable assumptions, based on appropriate testing,
on the modifying factors sufficient to demonstrate that extraction is
economically viable.
    (8) A pre-feasibility study must also identify sources of
uncertainty that require further refinement in a final feasibility
study.
    (9) Operating and capital cost estimates in a pre-feasibility study
must, at a minimum, have an accuracy level of approximately 25% and a contingency range not exceeding 15%, as provided in
Table 1 of this section. The qualified person must state the accuracy
level and contingency range in the pre-feasibility study.
    (10) A feasibility study must contain the application and
description of all relevant modifying factors in a more detailed form
and with more certainty than a pre-feasibility study. The list of
factors is not exclusive. For example, as provided in Table 1 to
paragraph (d) of this section, a feasibility study must define,
analyze, or otherwise address in detail, to the extent material:
    (i) Final requirements for site infrastructure, including well-
defined access roads, finalized plans for infrastructure location,
plant area, and camp or town site, and the established source of all
required utilities (e.g., power and water) for development and
production;
    (ii) Finalized mining method, including detailed mine layouts and
final development and production plan for the preferred alternative
with the required equipment fleet specified. The feasibility study must
address detailed mining schedules, construction and production ramp up,
and project execution plans;
    (iii) Completed detailed bench lab tests and a pilot plant test, if
required, based on risk. The feasibility study must further address
final requirements for process flow sheet, equipment sizes, and general
arrangement and specify the final plant throughput;
    (iv) The final identification and detailed analysis of
environmental compliance and permitting requirements, and the
completion of baseline studies and finalized plans for tailings
disposal, reclamation, and mitigation; and
    (v) The final assessments of other modifying factors necessary to
demonstrate that extraction is economically viable.
    (11) A feasibility study must also include an economic analysis
that describes taxes in detail, estimates revenues, and assesses
economic viability by a detailed discounted cash flow analysis. The
qualified person must use a price for each commodity in the economic
analysis that meets the requirements of paragraph (e)(4) of this
section. As discussed in paragraph (e)(3) of this section, in certain
situations, estimates of revenues must be based on

a final market study or letters of intent to purchase.
    (12) Operating and capital cost estimates in a feasibility study
must, at a minimum, have an accuracy level of approximately 15% and a contingency range not exceeding 10%, as provided by
Table 1 of this section. The qualified person must state the accuracy
level and contingency range in the feasibility study.
    (13) If the uncertainties in the results obtained from the
application of the modifying factors that prevented a measured mineral
resource from being converted to a proven mineral reserve no longer
exist, then the qualified person may convert the measured mineral
resource to a proven mineral reserve.
    (14) The qualified person cannot convert an indicated mineral
resource to a proven mineral reserve unless new evidence first
justifies conversion to a measured mineral resource.
    (15) The qualified person cannot convert an inferred mineral
resource to a mineral reserve without first obtaining new evidence that
justifies converting it to an indicated or measured mineral resource.
    (f)(1) The qualified person may indicate in the technical report
summary that the qualified person has relied on information provided by
the registrant in preparing its findings and conclusions regarding the
following aspects of modifying factors:
    (i) Macroeconomic trends, data, and assumptions, and interest
rates;
    (ii) Marketing information and plans within the control of the
registrant;
    (iii) Legal matters outside the expertise of the qualified person,
such as statutory and regulatory interpretations affecting the mine
plan;
    (iv) Environmental matters outside the expertise of the qualified
person;
    (v) Accommodations the registrant commits or plans to provide to
local individuals or groups in connection with its mine plans; and
    (vi) Governmental factors outside the expertise of the qualified
person.
    (2) In a separately captioned section of the technical report
summary entitled ``Reliance on Information Provided by the
Registrant,'' the qualified person must:
    (i) Identify the categories of information provided by the
registrant;
    (ii) Identify the particular portions of the technical report
summary that were prepared in reliance on information provided by the
registrant pursuant to paragraph (f)(1) of this section, and the extent
of that reliance; and
    (iii) Disclose why the qualified person considers it reasonable to
rely upon the registrant for any of the information specified in
paragraph (f)(1) of this section.
    (3) Notwithstanding the provisions of Sec.  230.436(a) and (b) of
this chapter, any description in the technical report summary or other
part of the registration statement of the procedures, findings, and
conclusions reached about matters identified by the qualified person as
having been based on information provided by the registrant pursuant to
this section shall not be considered a part of the registration
statement prepared or certified by the qualified person within the
meaning of Sections 7 and 11 of the Securities Act.

Sec.  229.1303   (Item 1303) Summary disclosure.

    (a)(1) A registrant that has material mining operations, as
determined pursuant to Sec.  229.1301, and two or more mining
properties, must provide the information specified in paragraph (b) of
this section for all properties that the registrant:
    (i) Owns or in which it has, or it is probable that it will have, a
direct or indirect economic interest;
    (ii) Operates, or it is probable that it will operate, under a
lease or other legal agreement that grants the registrant ownership or
similar rights that authorize it, as principal, to sell or otherwise
dispose of the mineral; or
    (iii) Has, or it is probable that it will have, an associated
royalty or similar right.
    (2) A registrant that has material mining operations but only one
mining property is not required to provide the information specified in
paragraph (b) of this section. That registrant need only provide the
disclosure required by Sec.  229.1304 for the mining property that is
material to its business.
    (3) A registrant that has a royalty, streaming or other similar
right, but which lacks access to any of the information specified in
paragraph (b) of this section about the underlying properties, may omit
such information, provided that the registrant:
    (i) Specifies the information to which it lacks access;
    (ii) Explains that it does not have access to the required
information because:
    (A) Obtaining the information would result in an unreasonable
burden or expense; or
    (B) It requested the information from a person possessing knowledge
of the information, who is not affiliated with the royalty company or
similar registrant, and who denied the request; and
    (iii) Provides all required information that it does possess or
which it can acquire without incurring an unreasonable burden or
expense.
    (b) Disclose the following information for all properties specified
in paragraph (a) of this section:
    (1) A map or maps, of appropriate scale, showing the locations of
all properties. Such maps should be legible on the page when printed.
    (2) An overview of the registrant's mining properties and
operations. This overview may be presented in narrative or tabular
format.
    (i) The overview must include aggregate annual production for the
properties during each of the three most recently completed fiscal
years preceding the filing.
    (ii) The overview should include, as relevant, the following items
of information for the mining properties considered in the aggregate:
    (A) The location of the properties;
    (B) The type and amount of ownership interests;
    (C) The identity of the operator or operators;
    (D) Titles, mineral rights, leases or options and acreage involved;
    (E) The stages of the properties (exploration, development or
production);
    (F) Key permit conditions;
    (G) Mine types and mineralization styles; and
    (H) Processing plants and other available facilities.
    (iii) When presenting the overview, the registrant should include
the amount and type of disclosure concerning its mining properties that
is material to an investor's understanding of the registrant's
properties and mining operations in the aggregate. This disclosure will
depend upon a registrant's specific facts and circumstances and may
vary from registrant to registrant. A registrant should refer to,
rather than duplicate, any disclosure concerning individually material
properties provided in response to Sec.  229.1304.
    (iv) A registrant with only a royalty or similar economic interest
should provide only the portion of the production that led to royalty
or other incomes for each of the three most recently completed fiscal
years.
    (3) A summary of all mineral resources and mineral reserves, as
determined by the qualified person, at the end of the most recently
completed fiscal year by commodity and geographic area and for each
property containing 10% or more of the registrant's combined measured
and indicated mineral resources or containing 10% or more of the
registrant's mineral reserves. This

summary must be provided for each class of mineral resources (inferred,
indicated, and measured), together with total measured and indicated
mineral resources, and each class of mineral reserves (probable and
proven), together with total mineral reserves, using the format in
Table 1 to paragraph (b) of this section for mineral resources, and the
format in Table 2 to paragraph (b) of this section for mineral
reserves.
    (i) The term by geographic area means by individual country,
regions of a country, state, groups of states, mining district, or
other political units, to the extent material to and necessary for an
investor's understanding of a registrant's mining operations.
    (ii) All disclosure of mineral resources by the registrant must be
exclusive of mineral reserves.
    (iii) All disclosure of mineral resources and reserves must be only
for the portion of the resources or reserves attributable to the
registrant's interest in the property.
    (iv) Each mineral resource and reserve estimate must be based on a
reasonable and justifiable price selected by a qualified person
pursuant to Sec.  229.1302(d) or (e), which provides a reasonable basis
for establishing the prospects of economic extraction for mineral
resources, and is the expected price for mineral reserves.
    (v) Each mineral resource and reserve estimate called for in Tables
1 and 2 to paragraph (b) of this section must be based on a specific
point of reference selected by a qualified person. The registrant must
disclose the selected point of reference for each of Tables 1 and 2 to
paragraph (b) of this section.
    (vi) The registrant may modify the tabular formats in Tables 1 and
2 to paragraph (b) of this section for ease of presentation or to add
information.
    (vii) All material assumptions and information pertaining to the
summary disclosure of a registrant's mineral resources and mineral
reserves required by this section, including material assumptions
related to price estimates, must be current as of the end of the
registrant's most recently completed fiscal year.

                                         Table 1 to Paragraph (b)--Summary Mineral Resources at End of the Fiscal Year Ended [Date] Based on [Price] \1\
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Measured mineral  resources            Indicated mineral  resources       Measured + indicated mineral resources        Inferred mineral  resources
                                 ---------------------------------------------------------------------------------------------------------------------------------------------------------------
                                        Amount         Grades/qualities         Amount         Grades/qualities         Amount         Grades/qualities         Amount         Grades/qualities
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity A:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area B
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property B
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Other mines/properties
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Other geographic areas
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity B:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area B
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property A
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property B
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Other mines/properties
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Other geographic areas
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
        Total
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\The registrant must use a reasonable and justifiable price for each commodity, which it must disclose, together with the time frame and point of reference used, when estimating mineral
  resources for this Table 1.

                     Table 2 to Paragraph (b)--Summary Mineral Reserves at End of the Fiscal Year Ended [Date] Based on [Price] \1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Proven mineral  reserves               Probable mineral  reserves                Total mineral  reserves
                                 -----------------------------------------------------------------------------------------------------------------------
                                        Amount         Grades/qualities         Amount         Grades/qualities         Amount         Grades/qualities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity A:
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Geographic area A
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property A
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Other mines/properties
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Other geographic areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------------------------------------
Commodity B:
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area A
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Geographic area B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property A
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Mine/Property B
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Other mines/properties
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Other geographic areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
        Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The registrant must use a reasonable and justifiable price for each commodity, which it must disclose, together with the time frame and point of
  reference used, when estimating mineral reserves for this Table 2.

Sec.  229.1304   (Item 1304) Individual property disclosure.

    (a)(1) A registrant must disclose the information specified in this
section for each property that is material to its business or financial
condition. When determining the materiality of a property relative to
its business or financial condition, a registrant must apply the
standards and other considerations specified in Sec.  229.1301(c) to
each individual property that it:
    (i) Owns or in which it has, or it is probable that it will have, a
direct or indirect economic interest;
    (ii) Operates, or it is probable that it will operate, under a
lease or other legal agreement that grants the registrant ownership or
similar rights that authorize it, as principal, to sell or otherwise
dispose of the mineral; or
    (iii) Has, or it is probable that it will have, an associated
royalty or similar right.
    (2) A registrant that has a royalty, streaming or other similar
right, but which lacks access to any of the information specified in
this section about the underlying property or properties, may omit such
information, provided that the registrant:
    (i) Specifies the information to which it lacks access;
    (ii) Explains that it does not have access to the required
information because:
    (A) Obtaining the information would result in an unreasonable
burden or expense; or
    (B) It requested the information from a person possessing knowledge
of the information, who is not affiliated with the with the royalty
company or similar registrant, and who denied the request; and
    (iii) Provides all required information that it does possess or
which it can acquire without incurring an unreasonable burden or
expense.
    (b) Disclose the following information for each material property
specified in paragraph (a) of this section:
    (1) A brief description of the property including:
    (i) The location, accurate to within one mile, using an easily
recognizable coordinate system. The registrant must provide appropriate
maps, with proper engineering detail (such as scale, orientation, and
titles). Such maps must be legible on the page when printed;
    (ii) Existing infrastructure including roads, railroads, airports,
towns, ports, sources of water, electricity, and personnel; and
    (iii) A brief description, including the name or number and size
(acreage), of the titles, claims, concessions, mineral rights, leases
or options under which the registrant and its subsidiaries have or will
have the right to hold or operate the property, and how such rights are
obtained at this location, indicating any conditions that the
registrant must meet in order to obtain or retain the property. If held
by leases or options or if the mineral rights otherwise have
termination provisions, the registrant must provide the expiration
dates of such leases, options or mineral rights and associated
payments.
    (iv) Except as provided in paragraph (a)(2) of this section, if the
registrant holds a royalty or similar interest or will have an
associated royalty or similar right, the disclosure must describe all
of the information in paragraph (b)(1) of this section, including, for
example, the documents under which the owner or operator holds or
operates the property,

the mineral rights held by the owner or operator, conditions required
to be met by the owner or operator, and the expiration dates of leases,
options and mineral rights. The registrant must also briefly describe
the agreement under which the registrant and its subsidiaries have or
will have the right to a royalty or similar interest in the property,
indicating any conditions that the registrant must meet in order to
obtain or retain the royalty or similar interest, and indicating the
expiration date.
    (2) The following information, as relevant to the particular
property:
    (i) A brief description of the present condition of the property,
the work completed by the registrant on the property, the registrant's
proposed program of exploration or development, the current stage of
the property as exploration, development or production, the current
state of exploration or development of the property, and the current
production activities. Mines should be identified as either surface or
underground, with a brief description of the mining method and
processing operations. If the property is without known reserves and
the proposed program is exploratory in nature or the registrant has
started extraction without determining mineral reserves, the registrant
must provide a statement to that effect;