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Best Practices in Reserve and Resource Estimate Reporting For Dual-Listed Canadian Mining and Oil and Gas Companies

Kevin D. Cramer, Marc A. Kushner, Frank Turner, Andrea Whyte, Eden M. Oliver, Proceedings of 56th Annual Rocky Mountain Mineral Law Institute (2010)

Canadian issuers are increasingly turning to the U.S. capital markets for both financing needs and strategic considerations. A public offering of securities in the United States provides an opportunity to reach a broader and deeper range of institutional and retail investors than is available in the Canadian capital markets. Further, a listing on a U.S. stock exchange enhances the potential for coverage of the company by research analysts, which in turn may result in a higher valuation of the company. Finally, many Canadian companies are expanding their businesses through acquisitions in the United States. Having securities that are publicly traded in the United States can be a valuable acquisition currency and can facilitate equity-based compensation plans for U.S. employees.
Canadian mining and oil and gas companies contemplating a U.S. listing need to know what reserve and resource estimate reporting requirements would govern their disclosure obligations in the United States given the material differences that exist between U.S. and Canadian requirements. This chapter discusses the market practices generally utilized by Canadian mining and oil and gas companies that are eligible to rely on the Multi-Jurisdictional Disclosure System (MJDS)3 between Canada and the United [6-4] States, and that have dual-listed their securities for trading on stock exchanges in Canada and