Ensuring compliance with NI 43-101 data verification standards is critical for mineral exploration companies. The Canadian Securities Administrators (CSA) regularly issue comments on technical reports that do not meet regulatory expectations, particularly regarding data verification. A common concern raised is the misunderstanding that database validation alone is sufficient for data verification under NI 43-101. In the following section, we will examine the key compliance pitfalls observed at Central Iron Ore Limited and discuss how companies can enhance their technical reports to meet CSA standards.
1 – Database Validation Is Not Data Verification
Many reports conflate database validation with data verification. While database validation checks ensure data consistency (e.g., collar elevations, drill depths, downhole surveys), they do not meet the definition of “data verification” under NI 43-101, which requires confirming that:
- Data was generated using proper procedures;
- Data was accurately transcribed from its original source; and
- Data is suitable for use in mineral resource estimation.
To meet NI 43-101 compliance, a Qualified Person (QP) must perform independent verification procedures beyond database validation.
2 – Lack of Independent Verification Sampling
A key CSA concern is the absence of independent check sampling by the QP. This would be considered standard industry practice for the British King Gold mineral project at this stage of development and an important verification initiative on behalf of potential investors. Best practices include:
- Collecting independent verification samples (e.g., drill core, surface grab samples, or rejects).
- Submitting samples to an accredited third-party laboratory for re-assay.
- Comparing historical assay results to new independent results to assess accuracy.
If no independent sampling is conducted, the report must clearly justify why it was omitted and provide alternative verification methods.
3- Insufficient Details in Site Visit Descriptions
The CSA expects detailed site visit documentation in technical reports. The site visit section should include the following:
- The date and duration of the visit.
- The areas reviewed, such as drill core storage, trenching locations, or processing facilities.
- Physical inspections conducted, including drill collars, sampling locations, and QAQC workflows.
- Any verification sampling performed and its outcomes.
A vague statement such as “the QP conducted a site visit to review the project” is not sufficient for compliance.
4. Weak Conclusions on Data Reliability
NI 43-101 reports should conclude whether the historical data is reliable for resource estimation. The CSA expects:
- A summary of the data verification methods applied.
- A comparison of historical and independent verification results.
- A clear conclusion on data reliability and its suitability for resource modeling.
A compliance-friendly statement might read:
“Based on independent check sampling, historical data review, and QAQC procedures, the QP considers the drilling data for the British King Gold Project to be sufficiently reliable for use in resource estimation at this stage of development.”
5. Best Practices to Ensure NI 43-101 Compliance
To align with CSA expectations, mining companies and QPs should:
- Implement independent verification sampling and provide clear documentation.
- Distinguish database validation from data verification in reports.
- Provide detailed descriptions of site visit with explicit verification steps.
- Conclude with a well-supported statement on data reliability.
By addressing these key data verification issues, companies can enhance investor confidence, avoid regulatory delays, and strengthen the credibility of their NI 43-101 technical reports.
6. Additional Compliance Concerns
The British King Gold Project technical report was identified as having deficiencies in Section 26, which does not comply with the requirements of Item 26 of the NI 43-101 Form. The CSA anticipates that technical reports will include the following:
- Particulars of recommended work programs
- Meaningful recommendations for further work
- Breakdown of costs for each phase
- Decision point if appropriate
To avoid misleading disclosure, technical reports must provide sufficient detail for a reasonably knowledgeable person to understand the nature and significance of the results, interpretations, conclusions, and recommendations. This requirement is explicitly stated in Section 6.1 of the Companion Policy 43-101 CP.
By ensuring that Item 26 is fully addressed, companies can strengthen their project planning transparency and align with CSA expectations, ultimately improving investor confidence and regulatory compliance.
Conclusion
The British King Gold Project technical report highlights several key areas where NI 43-101 compliance could be strengthened. Specifically, the data verification section lacks details on independent sampling and does not clearly demonstrate that the QP has confirmed the accuracy of historical data beyond database validation. Additionally, Section 26 fails to include the required particulars of recommended work programs, a breakdown of costs, and clear decision points, as mandated by the NI 43-101 Form.
To meet CSA expectations and avoid compliance issues, reports must provide:
- Clear independent verification sampling results and QAQC documentation.
- A detailed site visit description with explicit verification steps is also necessary.
- A transparent breakdown of recommended work programs and costs in Section 26 is also necessary.
- A well-supported conclusion on data reliability is also essential.
By implementing these improvements, companies can enhance transparency, strengthen investor confidence, and avoid regulatory delays.
For expert guidance on NI 43-101 technical report compliance, contact NI43 Compliant today. Our team qualified persons and reporting specialists will ensure that your disclosures meet CSA regulatory standards and industry best practices.
