ASIC has consolidated its guidance on forward-looking statements in the mining and resources industry (Information Sheet 214) and introduced new controversial requirements.
- Information Sheet 214 sets out ASIC’s guidance regarding the ‘reasonable grounds’ that must exist for an entity to make forward-looking statements about its mining and resources production targets and financial forecasts.
- ASIC’s guidance indicates that a project at the development stage or for which secured funding is not in place is unlikely to have ‘reasonable grounds’ for forward-looking statements.
- ASIC’s guidance may have the effect that mining companies who have not declared an ore reserve will be unable to disclose production targets or discounted cash flow valuations unless they have firm funding commitments.
- ASIC suggests that instead of disclosing a production target a company can make ‘aspirational statements’, announce exploration targets or disclose parts of a preliminary study that do not contain forward-looking statements.
- Guidance has attracted controversy with industry bodies calling for changes.
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