Companies urged to improve communications — Recommendations intended to strengthen market

Gold mining companies need adapt to a market in which confidence has been weakened and must be willing to improve communications in order to attract investor interest and confidence, according to a report released by Toronto-based communications consulting firm Wertheim & Co.

The report concedes that mining and exploration companies are having a difficult time attracting investors in the wake of the Bre-X Minerals debacle but maintains that few are doing anything to improve the market.

It notes that poor communication is the chief reason many junior companies fail to attract interest, citing badly written, overpromotional press releases as an example.

Major companies are generally more adept at communication than smaller firms, though the report insists that mining companies at both levels need to re-evaluate their policies regarding the dissemination of information.

Included in the report are recommendations by analysts, including a proposal that provincial regulatory commissions and exchanges set up guidelines demanding that mining companies improve their disclosure of prospectuses and clarify what constitutes a “resource” and what constitutes “proven” and “probable” reserves. Analysts also recommend that mining companies provide independent, third-party verification of discoveries and test results.

Other recommendations included in the report are as follows: * formulation of a policy regarding investor relations and disclosure, outlining what type of data will be released, how and when they will be released, and who, within the company, will be responsible for media and investor relations;

* keeping investors informed about quality-Control procedures, assaying methods and the names of organizations responsible for property and sample evaluation;

* the distribution of clearly written press releases;

* the appointment of reputable but largely independent directors; * tailoring the language of company releases to the audience (for example, technical information should generally be made available only to those who can understand it, whereas plain language should be used for lay investors).