Disclosure Documents Of Junior Mining Companies Are Being Scrutinized

In the late nineties, the Bre‐X scandal caused the worldwide reputation of Canada's mining industry to suffer a huge blow as information disclosed in press releases by Bre‐X Minerals Ltd. ("Bre‐X"), a Calgary‐based company, regarding its discovery in Indonesia of the world's largest gold deposit was revealed to be untrue. It is said that investors lost an estimated six billion dollars in this scheme. Nevertheless, investors continued to invest in Canadian mining companies and more interest was recently generated when the Quebec government unveiled its Plan Nord.

Although the Canadian Securities Administrators (the "CSA") created a new set of rules for mining disclosure and looked more closely at the disclosure documents filed by mining companies after the Bre‐X scandal, the review process has never been as rigorous as it has been in the last few months for mineral exploration companies.