Why discussing public drill hole data can only be done in private

Dr Alistair Reed
May 19, 2013

This is a third in a series of posts that are written by a guest.  The following post was written by Dr Alistair Reed (Schoer, Reed & Associates), and I provide a background to this topic below.

One of the things that I do is to show geologists how to model deposits from publicly available 'significant intercepts' drill hole data and assess the geological upside of any deposit.   I can even come up with a rough resource estimate before resources are announced by the owner of the deposit.  Any investor is interested in extra information that can be assessed from public data and I have shown many large companies how to do this effectively and rapidly. 

In late 2012, I had built a 3D model of a deposit everyone was talking about in Australia.  As the significant intercept data was excellent in quality, I thought it might be a good discussion point for our website.   For one thing, the model of the deposit provided alternative interpretations and insights in contrast to those presented by the listed company to the public.  With a help of a student assistant who tabulated the data, I am able to regenerate the 3D model of the deposit within hours of the market announcement, and I continue to update the model in 2013.

I thought naively that since companies disclose the significant intercepts to the market, I would be able to model the data and freely discuss the results publicly on this website.  After all, the market announcements are there to benefit the investors, right?  So any extra information that is derived from this data, surely this would be considered something that would help the investors, and we would be able to freely discuss this issue publicly.

As it turns out, there are laws to prevent this from actually happening, at least in Australia.

Surprised?  I was certainly surprised!

Today's guest blog post is a copied from a post by Dr Alistair Reed of Schoer, Reed & Associates who has studied this very issue.  You can read his original contribution at www.mineralresource.info.

- Jun Cowan

What I thought would be a simple matter of getting online and writing articles about mineral exploration and mining has turned into a bit of a bureaucratic nightmare. Ever heard of ASIC’s Regulatory Guide 162? In essence, it’s what governs the qualifications necessary to publish online about a listed security. 

Under RG162 (and accompanying Consultation Paper 104) this blog is considered a publication. Not surprising, perhaps.

What is more surprising is that under RG162 this blog might also be considered as a securities report!  

This blog is about mineral exploration. Exploration is normally conducted by listed companies, and under Corporations Law any article discussing aspects of a listed security can be considered a securities report. It’s not, of course, but these are the dictates of the regulations and the regulations say that to publish a securities report requires a licence (sigh, unless you include all the fine print that you can read by clicking on the Important Stuff page accessed from the main menu).

It gets worse.

It seems that if you write anything online about any aspect of any listed security on any website (and it doesn't have to be your own website) then it seems that you could fall afoul of ASIC.

To be fair to ASIC, they do not want to stifle discussion where it does not impact upon the integrity of the securities market. For the moment, ASIC tolerate blogs and internet discussion sites, albeit with conditions. Even then, it all seems a bit unclear.

It’s worth reading all that fine print the next time you log into a forum……
……..as well as the fine print that I have included on this website.

Al Reed


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