Dust flux, Vostok ice core

Dust flux, Vostok ice core
Two dimensional phase space reconstruction of dust flux from the Vostok core over the period 186-4 ka using the time derivative method. Dust flux on the x-axis, rate of change is on the y-axis. From Gipp (2001).

Tuesday, March 1, 2011

Regulatory creep(s) in the Canadian mining sector?

I use the term regulatory creep to describe the process by which regulations in an industry are expanded through time to increase the level and scope of control through casual application rather than by formal change. Apparently there is debate over whether this process is inevitable (it is in our current "everyone must be safe" regime). I intend this to describe a process, not the individuals responsible.

Last year I wrote an NI 43-101 qualifying report for some properties held by a client. The report went to the securities commission for approval. The client wished to float another company with the goal of exploring the properties described in the report. The report was reviewed by the commission, and came back with a deficiency--the client had not spent the requisite amount ($100,000) on the property.

This was a surprise, because according to the budget filed with the commission, the client had spent considerably more than $100,000 on the property. However the commission had disallowed a number of expenses without explanation leaving a final amount of approximately $90,000 spent on the properties. Good grief!

This result was so perverse that I had the urge to laugh when I saw it, despite the immediate impact on my livelihood.

The intent of that rule was not to exclude properties that had fallen $200 short of the $100,000 limit. The intent of that rule was to prevent people from digging a couple of holes in their backyards, spending $200 on assays, and then bringing that property to market. It was not meant to exclude properties which have previously been the subject of extensive soil and trench geochemical surveys coupled with significant drilling program which admittedly failed to define a resource--but evidently the properties were good enough that public companies had attempted to define a resource in the past.

It's possible that this would have been nothing but an annoyance had not the government of Sierra Leone subsequently cancelled the licences without explanation. The full story is not pieced together but it appears that there is another large company involved which somehow received technical details of the properties from an unknown source (the regulators, perhaps?)

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