Liberal MP John McKay’s Sunshine Bill – What Resource Developers Should Know

Photo: John McKayOn Feb. 26 2013, Liberal MP John McKay sponsored the first reading of Bill C-474 in parliament; also known as “The Sunshine Bill”. An Act respecting the promotion of financial transparency, improved accountability and long-term economic sustainability through the public reporting of payments made by mining, oil and gas corporations to foreign governments.

 In the Honorable Mr. McKay’s own words the purpose of the Bill is “…intended to shine a light on the whole business of murky payments that go on in some transactions with respect to the obtaining and retaining of mining licenses.” In more general terms the bill would require Canadian resource companies (Mining, Oil or Gas) provide annual transparency reports disclosing payments made by the company to foreign governments. These reports would be submitted to the Minister of Foreign Affairs and the Minister of Natural Resources, as well as being made publicly available.

Related: Fired Chadian ambassador defends ‘done in the daylight’ Griffiths deal | Globe and Mail

This reporting procedure would differ from standard Security and Exchange Commission rules in that:

1) It applies to the payment of Consumption Taxes;
2) It applies to social payments, transfers and service fees of a contractual or employment agreement;
3) And reports must be independently audited prior to submission. (which can be anticipated to prove quite costly)

Many will recall John McKay of the now infamous Bill C-300, which received a unanimous show of opposition from the mining industry and was narrowly thrown out during its third reading in 2010.

It is Important to note that C-474 is a “Private Members Bill”, meaning it was not proposed by a member of cabinet, but rather a “back bencher”. These bills rarely make it through all three readings to become law. That being said, Bill C-300 was also a private members bill and was only narrowly thrown out in the final reading, with a final vote of 140-134 (against). But as the Conservatives hold a majority in the house it seems unlikely C-474 will make it past its second reading. Regardless, one can anticipate that many resource companies, and their lobbyists, will have taken notice of Mr. McKay’s renewed effort to increase government oversight within the industry.

Kaminak Gold Corp. (KAM: TSX-V)

KAMHere is a stock that has seen some attention this week. Kaminak gold owns the Coffee project in the Yukon. Details of the project can be found here. Kaminak has been trading down significantly since an October high of $2.40, to $1 in December. This was not based on any press releases, so our speculation is that tax loss selling is the culprit.

On December 13th, Kaminak Continue reading

Goldquest Corp. (GQC: TSX-V)

On May 23rd, 2012, after trading had ceased for the day in a capital market climate that seemed gloomier than ever, GoldQuest released a drill hole that sent an awakening ripple through a dormant junior market. An IP anomaly to the north of their Las Tres Palmas property in the Dominican Republic was the motivation that led to the discovery of the Romero zone and the promising discovery hole LTP-90. At 231m grading 2.4 g/t Gold, including 160m grading 2.9 g/t gold and 0.62% copper, the discovery was enough to send the $0.07 stock to $0.61 in 3 days. Without hesitation, Goldquest announced a $5m bought private placement at $0.45 per share, increased it to $5.7m, and finally closed it in June at $6.6m. This financed the rest of an exciting summer drill program on Romero. Initial concerns about the drilling Continue reading

Clearing Up MRMR (Mineral Resources and Mineral Reserves)

I recently had a discussion with a friend of mine who is just getting into resource investing. She was rather confused about how companies report the size of their mineral deposits (i.e. the resource and reserve categories) and asked me to explain what it all means. I realized that some of our readers may benefit from a brief explanation as well, so here goes: Continue reading

Sierra Mojada, Silver Bull Resources

For over a hundred years, the area has been artisanally mined and now contains more than 50 shafts. Silver Bull Resources has recently completed a NI 43-101 compliant report on this relatively low grade silver/zinc property, which demonstrates some serious economic potential for this open pit and heap leach project. Continue reading