Show pageOld revisionsBacklinksBack to top This page is read only. You can view the source, but not change it. Ask your administrator if you think this is wrong. ======National Instrument 43-101====== National Instrument 43-101 (often shortened to //NI 43-101//) is a set of rules and standards for how mining and exploration companies must report scientific and technical information about their mineral projects to the public. It’s a Canadian law, but its influence is global. Developed by the [[Canadian Securities Administrators (CSA)]], its primary goal is to protect investors from being misled by overly optimistic or fraudulent claims. The rule was born from the ashes of the infamous [[Bre-X scandal]] in the 1990s, where a company’s claims of a massive gold deposit in Borneo turned out to be a complete fabrication, costing investors billions. Today, any mining company listed on a Canadian stock exchange, like the [[Toronto Stock Exchange (TSX)]] or the [[TSX Venture Exchange]], must follow NI 43-101. Because of its rigor, the NI 43-101 report has become the gold standard for project disclosure worldwide, providing a trusted framework that helps investors make more informed decisions. ===== Why NI 43-101 Matters to You ===== For investors, especially value investors, wading into the mining sector can feel like navigating a minefield of hype and speculation. NI 43-101 is your best geological map and compass. It forces companies to ground their exciting press releases in scientific fact and standardized reporting. ==== The "Qualified Person" – Your Independent Expert ==== The heart of NI 43-101 is the requirement for a technical report to be prepared by or under the supervision of a [[Qualified Person (QP)]]. A QP is an independent geoscientist or engineer with specific professional credentials and relevant experience. They are legally and professionally accountable for the information presented. Think of a QP as a certified public accountant for rocks; their sign-off gives the data a crucial layer of credibility. If a company makes a big announcement about a new discovery but can’t produce a report signed by a QP, a massive red flag should go up. ==== A Standardized Yardstick for Comparison ==== Before NI 43-101, companies could use all sorts of creative and inconsistent language to describe their deposits, making it impossible to compare one project to another. This regulation establishes a common vocabulary, defining specific categories for mineral resources and reserves. This allows you, the investor, to compare projects on an apples-to-apples basis, cutting through the marketing jargon to assess the real substance of a company's assets. ===== De-Mystifying an NI 43-101 Report ===== An NI 43-101 technical report can be long and dense, but you don't need to be a geologist to pull out the most important information. Knowing where to look and what the key terms mean is half the battle. ==== Key Sections to Look For ==== * Property Description and Location: Does the company actually have the legal rights to mine the land? This is a fundamental check. * Accessibility, Climate, and Infrastructure: Can they even get to the minerals? Is there water, power, and a nearby town? A fantastic deposit in an impossibly remote location is worthless. * Geological Setting and Exploration: This section explains //why// the company believes valuable minerals are there. It details the history of exploration and the results of things like geophysical surveys. * Drilling and Sampling: This is the hard evidence. It describes how the company collected its physical samples (e.g., [[drill cores]]) and the procedures used to ensure they are high-quality and unbiased. * Mineral Resource and Mineral Reserve Estimates: This is the most critical section for investors. It quantifies the potential size and quality of the mineral deposit. ==== Resources vs. Reserves: The Most Important Distinction ==== Understanding the difference between a "resource" and a "reserve" is non-negotiable for any serious mining investor. They are //not// the same thing. * **[[Mineral Resource]]**: This is a concentration of material in or on the Earth’s crust in such form and quantity that there are reasonable prospects for //eventual// economic extraction. It's an estimate of what might be there, categorized by confidence level: * //Inferred Resource//: The lowest level of confidence. It's a preliminary estimate based on limited geological evidence. Think of it as seeing smoke in the distance—there’s probably a fire, but you don’t know how big it is. * //Indicated Resource//: A higher level of confidence. More drilling and sampling has been done to give a better idea of the deposit's size and grade. You can now see the flames. * //Measured Resource//: The highest level of confidence. The deposit has been drilled and sampled so thoroughly that its dimensions, grade, and tonnage are well-established. You’ve measured the fire's heat and dimensions. * **[[Mineral Reserve]]**: This is the economically mineable part of a //Measured// or //Indicated// Mineral Resource. A reserve is what you get when you apply real-world modifying factors—like the price of the metal, the cost to mine and process it, and legal permits—to a resource. A reserve is what can actually make money. * //Probable Reserve//: The economically mineable part of an Indicated Resource. Lower confidence. * //Proven Reserve//: The economically mineable part of a Measured Resource. The highest level of confidence and the closest thing to money in the bank. A company with 10 million ounces of //Proven Reserves// is in a vastly different—and much stronger—position than a company with 10 million ounces of //Inferred Resources//. ===== Capipedia’s Bottom Line ===== An NI 43-101 report is not a guarantee that a mine will be profitable or that an investment will succeed. However, it is an indispensable tool for [[due diligence]]. It transforms mining investment from a wild gamble into a calculated risk. Never, ever invest in a junior mining company based on a flashy presentation or a hyped-up press release. Your first question should always be: "Where is the NI 43-101 report?" Reading that report, and specifically understanding the difference between its resource and reserve estimates, is your first and most important step in separating geological potential from a hole in the ground that will just swallow your money. For a value investor, the report is the blueprint that shows whether a company has a realistic plan to turn rocks into revenue.