"A Technical Summary Report (TSR) is information concerning a project in the future or in current operation. And in turn, it is developed under three principles: transparency, since it must be clear and unambiguous; materiality, because it must contain relevant information; and competence, since it must be prepared by qualified and experienced professionals", as conceptualized by Raúl Espinoza, Services Manager for South America at M3 Engineering & Technology, during the presentation entitled "New SEC Guidelines for Reporting on Mineral Resource Projects; S-K1300 and what you need to know", which was delivered as part of the Heading to PERUMIN business conferences, under the focus of“ Competitive and Sustainable Proposals for the Development of Peru".
According to the speaker, the preparation of the TSR must be consistent and understandable in the use of standardized terms and definitions, and not induce bias, with the central purpose of demonstrating a level of knowledge of the project or mine, providing a level of confidence for investors and other interest groups, and obtaining financing and social and political support.
"We must be clear that the TSR is not a guarantee of a good job, nor is it a recipe for estimating resources or reserves, and even less is it a confirmation that the project is good. Simply put, this study gives you a vision, at a given moment, of the situation, opportunities and risks of the project", he said.
However, all technical disclosure made by public mining companies registered with the United States Securities and Exchange Commission (SEC) must be governed by the new standard now SK 1300, which replaced the defunct IG 7. This standard must be complied with by each registrant responsible for providing the disclosure note specified in "Subpart 1300" of the SK standard if the mining operation is "material" to its business, as well as to its financial situation.
"SK 1300 replaces the old IG-7 because it aligns SEC mineral property requirements and policies with current industry global regulatory standards (NI 43-101, JORC, etc.); it adopts standards similar to those of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO); and consolidates mineral property reporting requirements by transferring them to a new subpart of the SK regulation (Subpart 1300)", he explained.
Qualified Person Profile
Regarding the requirements of the Qualified Person (QP) for the preparation of the TSR, Raúl Espinoza stated that he or she must be a professional in the mining industry with at least five years of relevant experience in the type of mineralization and type of deposit under consideration, in the specific type of activity that the person is carrying out on behalf of the registrant.
"In addition, they must be an eligible member or valid license holder of a recognized professional organization at the time the technical report is prepared (SME registered, AusIMM (CP) or FAusIMM, Professional Engineer - P. Eng., etc.) “, he said
Feasibility study requirement
Alberto Bennett, president of M3 Engineering & Technology explained that one of the important requirements for the TSR submission is the feasibility study, which will determine what the project will be, based on the technical and economic research of the selected development option, which also includes detailed and realistic assessments of aspects such as mining, process, metallurgy, commercialization, legal, environment, social and governmental.
However, he warned that the use and abuse of feasibility studies, according to Bill Mackenzie and Neil Cusworth’s analysis, are assumed to be much more complete and accurate than they actually are, so they are often not fit for their intended purpose and tend to focus on technical issues at the expense of fundamental business and project delivery issues.
"Prior to SK 1300, the US SEC had Industry Guide 7 (G7), but it was not a requirement for companies to publish their studies. Now with SK 1300, it is a requirement for mining companies listed on the U.S. Stock Exchange to publish their TSRs".