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About the NI 43-101…

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stervc Member Level  Sunday, 12/19/10 03:40:42 PM
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About the NI 43-101…

For inquiring minds, the completion of a National Instrument (NI) 43-101 is absolutely huge. I’ll try to explain more below for all to have a better understanding for those who are not familiar with the importance.

The National Instrument (NI) 43-101 is a Technical Report that is an indebt valuation report of the minerals in the ground of a property that’s completed from a qualified professional independent geologist about the property or land for an area. Information confirmed and coming from a qualified professional independent geologist is a big difference than anything coming from you, me, or any other investor posting within these forums. Coming from anyone of us saying that a company has property or land in an area with a certain valuation would be considered speculation or simply us stating a potential. However, coming from a completed NI 43-101 is a much greater and legit confirmation where the value from the property would be considered ”proven” from a NI 43-101.

The valuation is listed under three different classifications of confidence:

The lowest-confidence category, based on just enough drilling to outline the mineralization.

Measured & Indicated (M&I)
These higher-confidence categories have been drilled enough to establish their geometry and continuity reasonably well.

Proven & Probable (P&P)
These are bankable mining reserves – basically Measure and Indicated resources with established value.

A NI 43-101 is used to evaluate and valuate the property/land for a particular area… not the company. The gold is going to “directly” come from the property/land in that area… not the company. The gold will be coming indirectly from the company to reach us as shareholders and investors of the company, but the gold will be coming directly from the property.

So what’s important about having this NI 43-101 is that it comes from qualified independent professional sources which are these qualified geologists that are independent from the company to complete the NI 43-101 or any other forms of Technical Reports to confirm the valuation in the ground.

A company having a NI 43-101 for the area of their property is something that is very important in my opinion because it brings credibility to the company’s gold project from qualified professional independent geologists. Although it is not a mandatory requirement to have a NI 43-101, it is usually used to validate a Canadian standard requirement enforced by Canadian securities regulators to trade on the Canadian exchanges. This was implemented to protect investors from being scammed as to what happened with the Bre-X mining scandal years ago. All mineral properties trading on the Canadian Exchanges are evaluated by an independent third party to validate the property in a feasibility study into a NI 43-101.

Although many other companies obtain a NI 43-101 that do not trade on any Canadian exchange, it reflects a technical report of the minerals on the property of topic completed by qualified Geologists that substantiates the valuation. A NI 43-101 is still not the gospel as the mining operations will still need to be done to capture the amount of value considered, but it is the next best thing in my opinion.

A NI 43-101 converts investor ”speculation” about the valuation of a property into ”actual” or ”confirmed” valuation from the mining experts/geologists about a property. This will confirm the company’s property for truly being legit which is important to have done before any major drill program is ever executed.

So again, the importance of the National Instrument (NI) 43-101 here with a mining stock is that it adds legitimacy to the properties in the eyes of the investors because it graduates the property to be considered held at a higher standard. So obtaining a NI 43-101 is not just for Canadian based reasons, but are for instilling significantly greater confidence into the hearts and minds of your investors here in the US. It is also important to make sure that there is a seal or some kind of a stamp/signature that is within the viewed NI 43-101 for authentication purposes.

Here is a more formal definition of the NI 43-101 for a better understanding of its importance:

National Instrument 43-101 (NI 43-101) is a rule developed by the Canadian Securities Administrators (CSA) and administered by the provincial securities commissions that governs how issuers disclose scientific and technical information about their mineral projects to the public. It covers oral statements as well as written documents and websites. It requires that all disclosure be based on advice by a "qualified person" and in some circumstances that the person be independent of the issuer and the property.

A qualified person (QP) as defined in NI 43-101 as an individual who:

a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these;
b) has experience relevant to the subject matter of the mineral project and the technical report; and
c) is a member in good standing of a professional association.

A more and in-depth report of what a NI 43-101 is can be viewed below:


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