Do "Spectacular" Infill Drill Results Require Disclosure?

A British Columbia Securities Commission ("BCSC") decision earlier this year should be of interest to junior mining issuers, though we suggest that the decision should be followed with extreme caution. We note that this decision relied on specific facts and circumstances and should not be taken as standing for the proposition that infill drill results are not, per se, material.

In April, 2012, the executive director of BCSC alleged that Canaco Resources Inc. ("Canaco"), a TSX Venture Exchange ("TSXV") listed company, together with its President and three other directors, failed to promptly disclose assay results from eight drill holes, that these results constituted a "material change", and that the failure to make prompt disclosure violated Section 85 of the Securities Act (British Columbia). The executive director also alleged that the directors of Canaco failed to act in the company's best interest when they issued stock options to officers, directors and