CIM seeks comments on valuation code

An outgrowth of the 1999 report of the Mining Standards Task Force, which tightened reporting requirements for mineral exploration companies listed on Canadian exchanges, is a greater concern over the valuation of mineral properties.

The Canadian Institute of Mining and Metallurgy’s special committee on valuation of mineral properties is working on a code for valuation work, on the pattern of the Australasian Institute of Mining and Metallurgy’s VALMIN code. The committee, formed by the CIM in May 1999, includes representatives form across the mineral industry and is chaired by Keith Spence of the CIM’s Mineral Economics Society and William Roscoe of consulting firm Roscoe Postle Associates.

The Australian code, developed in 1995 and revised in 1998, outlines best practices for determining the value of mineral properties, for inclusion in independent reports required by Australian securities law. The Australian regulators and professionals have studiously avoided a “cookbook”-style code, emphasizing instead the need for transparent and well-documented methodology, and all-round competence, in the valuer’s report.

While the VALMIN code has been an inspiration for the proposed Canadian code, it will not necessarily be the model for the code finally developed for use here. It may or may not become part of the regulatory apparatus, as a National Instrument adopted by the provincial securities commissions.

Some of the questions facing the Canadian committee are whether valuation work should be regulated by government bodies or by the professionals themselves, what valuation methods should be recommended or permitted by the code, whether valuers should be subject to a rule similar to the Qualified Person rule in mineral resource estimation, and how “independence” of a valuer might be defined.

The committee is inviting comments on the code. A request for comments can be viewed at the CIM’s web site, www.cim.org, or questions can be directed to co-chair William Roscoe at Roscoe Postle Associates, Suite 1210, 55 University Ave., Toronto, Ont. M5J 2H7. Fax: (416) 947-0395. E-mail: wroscoe@rpacan.com.

Comments can be addressed to Michael Bourassa at Aird & Berlis, Box 754, BCE Place, 181 Bay St., Toronto, Ont. M5J 2T9. Fax: (416) 863-1515. E-mail: mbourassa@airdberlis.com