SEC S-K 1300

SEC S-K 1300 is the rulebook from the U.S. Securities and Exchange Commission (SEC) that tells mining companies how they must report information about their mineral assets. Think of it as the ultimate “show your work” requirement for any company wanting to tell investors about the treasure in their ground. Implemented in 2021, it replaced the dusty, old Industry Guide 7, bringing U.S. disclosure standards into the 21st century. The main goal of S-K 1300 is to boost transparency and reliability, helping investors make more informed decisions. It achieves this by standardizing the way companies talk about their mineral discoveries, forcing them to use consistent definitions and back up their claims with detailed technical evidence. For investors, this means less corporate storytelling and more hard, comparable data.

At its heart, value investing is about understanding what a business is truly worth. For a mining company, its worth is buried in the ground. S-K 1300 is the shovel that helps you dig up the facts. Before this rule, comparing the mineral assets of a U.S.-listed company to, say, a Canadian or Australian one was like comparing apples to oranges—the rules were just too different. S-K 1300 aligns U.S. standards more closely with international best practices like Canada's NI 43-101 and Australia's JORC Code. This harmonization makes your life as an investor easier, allowing for more meaningful comparisons across the global mining sector. It mandates that a Qualified Person (QP)—an accredited industry expert—must sign off on the technical reports, adding a crucial layer of independent verification. This helps you filter out hype and focus on assets with genuine, professionally vetted potential.

This is perhaps the most important distinction S-K 1300 clarifies for investors. Getting this wrong is like confusing a recipe with a finished meal.

• Mineral Resources: This is a concentration of rock or mineral that has reasonable prospects for eventual economic extraction. It's an estimate of what's potentially there and valuable. Resources are broken down by confidence level:
  • Inferred: The lowest confidence level. It's like saying, “Based on some initial drilling and geological clues, we think there's something valuable over there.” It's an educated guess.
  • Indicated: More confidence. “We've done more drilling and sampling, and we're pretty sure about the quantity and quality of what's here.”
  • Measured: The highest confidence level. “We've drilled and sampled this area so extensively, we can estimate the quantity, grade, and geology with a high degree of certainty.”
• Mineral Reserves: This is the portion of an Indicated or Measured Mineral Resource that is actually economically mineable. To declare a reserve, a company must have completed at least a Pre-Feasibility Study that proves the project makes financial sense with current technology and metal prices. Reserves are also broken down by confidence:
  • Probable Reserves: The economically mineable part of an Indicated Resource. Good confidence.
  • Proven Reserves: The economically mineable part of a Measured Resource. The highest level of confidence.

The investor's takeaway: Reserves are money in the bank (or at least, ore in the mine cart); resources are promising lottery tickets. A company with vast resources but no reserves may have potential, but it carries far more risk than a company with established, proven reserves.

The QP is the independent umpire in the mining disclosure game. Under S-K 1300, a QP is a mineral industry professional (like a geologist or mining engineer) who meets specific criteria for experience and professional affiliation. Their job is to prepare or supervise the preparation of the technical information and reports a company discloses. When a QP signs their name to a report, they are putting their professional reputation on the line, attesting that the estimates and plans are based on sound scientific and engineering principles. For an investor, the QP's involvement is a seal of quality, providing assurance that the company's claims aren't just wishful thinking.

When a company first discloses its resources or reserves, or makes a significant change to them, S-K 1300 requires it to file a detailed Technical Report Summary. This document is a goldmine for diligent investors. It's not a glossy marketing brochure; it's a comprehensive report authored by a QP that lays out all the critical details:

• The geology of the deposit.
• Exploration methods and results.
• Sampling and data analysis procedures.
• The assumptions used in a Feasibility Study, including mining costs, processing costs, and commodity price forecasts.

Reading these reports is essential due diligence for anyone serious about investing in a mining stock.

S-K 1300 wasn't just a fresh coat of paint; it was a complete renovation of U.S. mining disclosure. Here are the key upgrades from the old Industry Guide 7 (IG 7):

• Disclosure of Resources: IG 7 strictly forbade companies from disclosing mineral resources, allowing only proven and probable reserves. S-K 1300 permits the disclosure of all categories of resources, giving investors a much earlier and more complete view of a company's asset pipeline.
• Higher Bar for Reserves: S-K 1300 requires a comprehensive study (at least a Pre-Feasibility Study) to be completed before a company can classify a resource as a reserve. This raises the standard significantly, ensuring reserves are backed by rigorous economic and technical analysis.
• The Qualified Person Mandate: IG 7 had no requirement for an independent, qualified expert to sign off on disclosures. S-K 1300's introduction of the QP is a game-changer for data reliability.
• Global Harmony: S-K 1300's definitions and structure are closely aligned with international standards. This makes it far easier for investors to evaluate and compare mining companies listed on different global exchanges.