» NI 43-101 Technical Reports: What They Are, and What They’re Not Page 1 of 11

NI 43-101 Technical Reports: What

They Are, and What They’re Not
by William (Bill) Lewis | Nov 1, 2016 | 33 comments

The purpose of an NI 43-101 Technical Report, as stated in the

Form 43-101F1 Instructions, is “to provide a summary of material
scientific and technical information concerning mineral
exploration, development, and production activities on a mineral
property that is material to an issuer” and the instructions to
authors further states: “The Qualified Person preparing the
Technical Report should keep in mind that the intended
audience is the investing public and their advisors who, in most
cases, will not be mining experts. Therefore, to the extent
possible, technical reports should be simplified and
understandable to a reasonable investor. However, the technical
report should include sufficient context and cautionary language to allow a reasonable investor to
understand the nature, importance, and limitations of the data, interpretations, and conclusions
summarized in the technical report.”

Unfortunately, there appears to be a trend towards the inclusion in Technical Reports of

overwhelming amounts of data and levels of detail that only experts in the field can hope to
understand. In this paper, I aim to outline what should, and should not, be included.

An NI 43-101 Technical Report can be any of the following:

• A first time report on a mineral property (exploration or operating).

• A summary of the exploration activities with inherent Quality Control/Quality Assurance (QA/QC)
on a project.
• A summary of the mineral resource estimate for a property.

• A report outlining ownership of a non-operating interest in a property (Royalty or otherwise).

• A report containing the results of a Preliminary Economic Assessment.

• A report or summary of the results of a Pre-Feasibility Study, depending on the complexity of the

project.

• A summary of the results of a Feasibility Study on a mineral property.

• A summary of work conducted on an operating project possibly containing updated resource and

reserve estimates.

• Any variation of the above.

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Since the inception of the NI 43-101 reporting format, Micon has seen and examined the gamut of
Technical Reports from examples containing barely any useful information on the property to those
that run in excess of 500 pages (generally describing pre-feasibility and feasibility studies) that
make little attempt to summarize the extensive work conducted on a property.

The Technical Report is not intended as a data dump at the end of an exploration program, nor does
it replace the documentation of a complete or preliminary feasibility study on a property with all its
subordinate studies, technical designs and engineering drawings. In general, an NI 43-101 Technical
Report should be a good summary of the scientific and technical material concerning exploration,
development and production on an issuer’s material property (or properties) whether it be an initial
report on a property or a summary of the feasibility study. In most cases, the details of that work
should be documented in detail for the company’s internal records, but not for public disclosure. It
should be noted that “Since a technical report is a summary document the inclusion and filing of
comprehensive appendices is not generally necessary to comply with the requirements of the
Form.”

The need for separate all-encompassing reports is especially important in the case of pre-feasibility
and feasibility studies. In these reports, there are generally secondary investigations dealing with
economic trade-off studies, environmental baseline studies, major metallurgical studies,
geotechnical and hydrological investigations, equipment supply quotes, detailed mine planning
and scheduling, process flowsheets and diagrams, equipment layouts, tailings storage facility
designs and cost estimates. In some cases, entire volumes are devoted to these separate, stand-
alone studies.

Unfortunately, in the period since the introduction of the NI 43-101 reporting format, the Technical
Report has become a catch-all. Ideally, companies would have their Qualified Person/s conduct and
document their detailed work and then summarize it into a Technical Report for public disclosure.
This can be done by either an in-house or independent QP, depending on the company’s reporting
status.

However, it appears some industry executives, promoters and companies have come to believe that
the Technical Report, prepared for filing purposes, should attempt to describe in detail all the work
done and contain all the data generated in that process.

For many exploration projects, that results in superfluous details cluttering the report, often to the
detriment of clarity. Far better that companies should continue to have their staff or consultants
write internal reports on their exploration or operating properties which can be then used as the
basis for a publicly-filed NI 43-101 report. After all, the investor does not necessarily need to know
every nuance of a major exploration program, or have the entire data dump for the project, but a
summary of the significant intersections and the key findings of a program or operation based upon
information collected in a reliable manner using best practices.

With advanced projects, in an effort to trim costs, corners are getting cut. Some companies try to
force major studies into a one volume NI-43-101 report with a multitude of appendices. Too often,
the problem then becomes one of inadequate or poorly-organized back-up data being available
when the project reaches the stage of seeking construction finance and due diligence is underway.

Micon recommends that its clients undertake properly documented pre-feasibility and feasibility
studies. Once the separate components of the study are nearing completion or completed, then the
results can be summarized into an NI 43-101 for the purposes of regulatory filing. In this way, if
financing is sought for the project, the company has all of the inherent studies and technical
information in one place for the purposes of conducting a due diligence review of the information.
While review of a Technical Report allows non-technical investors to form an opinion regarding a
project’s value, a full review of the underlying data, estimates and assumptions by an Independent
Engineer is a necessary step in most project financing situations.

It is time for everyone in the industry to recognize that NI 43-101 reporting was – and is – intended to
summarize a company’s exploration work or technical studies related to its mineral properties for
the express purposes of relaying this information succinctly to its investors and their advisors. An NI
43-101 report is neither a compendium of every available scrap of information, nor is it a substitute
for well-documented pre-feasibility and feasibility studies.
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33 Comments
Nigel Fung on January 25, 2017 at 1:30 pm
Well summarized, agree 100%
Reply

Al Workman on January 26, 2017 at 8:29 pm

Your comments are right on the mark, and we at WGM share your
Reply
views. A NI 43-101 compliant technical report should not be a PhD
thesis. That said, it is not always easy for geologists to simplify the
terminology, and the reader should be expected to be sufficiently
informed to understand the basic technical language. Most
important, the report should contain a discussion of each subject
area in terms of its relevancy to an investor making an informed
assessment of the merits of a project. Flooding the reader with
minutiae covering each and every dollar spent is not helpful, yet too
often little is said of the economic or other benchmarks that a
project needs to clear to be viable, with the inevitable result that
projects having no realistic hope for development are billed as ‘the
next best thing’. The challenge may be grade or the quality of the
mineral resource, or it may be the market itself. Realism should
trump ambition, but too often it does not. Yes, there is room for
optimism – industry pundits have a less than sterling record in
forecasting short-term commodity trends, so we must always be
cognizant of the limits of our knowledge if we are dismissing a
project. The technical report should be factual, and the writer
should not be an advocate for the project owners, yet too often that
is precisely what they become. Facts must be checked. We at WGM
have a firm belief in check sampling. Had I or others at WGM been
involved, Busang, Boka and a slew of other speedbumps that have
shaken our industry might have been avoided completely. There is
no substitute for check sampling yet for reasons I will never
understand, it was never firmly mandated in NI 43-101.

Claudia Naranjo on February 1, 2017 at 12:54

pm Reply
I agree, it needs to be very simple. If you can’t
simplify it, then you don’t understand it well
enough.

https://www.micon-international.com/ni-43-101-technical-reports-theyre-not/ 6/10/2020