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Gold mine feasibility study disclosure in Australia: Determinants and implications

Author

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  • Ferguson, Andrew
  • Feigin, Alexey
  • Kean, Stephen

Abstract

This study investigates disclosure practices for gold development companies in their feasibility studies. The information environment around feasibility studies released by developmental stage enterprises in the Australian gold mining industry is characterised by little in the way of disclosure guidance or rules. This contrasts with Canadian disclosure requirements which are highly prescriptive. Using a sample of 85 Australian gold feasibility studies, we develop a new voluntary disclosure index and consider three problems. First, we examine the association between levels of voluntary disclosure in the feasibility study and external involvement. Second, we consider whether levels of voluntary disclosure are associated with successful debt financing. Third, we analyse the relationship between levels of voluntary disclosure and a successful project outcome. Voluntary disclosure is found to be driven by the presence of an external feasibility manager and the number of external consultants named in the feasibility release. Our evidence also finds that voluntary disclosure levels are positively related to debt financing availability and project success, suggesting voluntary disclosure levels are a useful signal of project quality.

Suggested Citation

  • Ferguson, Andrew & Feigin, Alexey & Kean, Stephen, 2013. "Gold mine feasibility study disclosure in Australia: Determinants and implications," Resources Policy, Elsevier, vol. 38(1), pages 8-17.
    • Handle: RePEc:eee:jrpoli:v:38:y:2013:i:1:p:8-17
    DOI: 10.1016/j.resourpol.2012.06.015
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    References listed on IDEAS

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    1. Kenneth Clements & Liang Li, 2017. "Understanding resource investments," Applied Economics, Taylor & Francis Journals, vol. 49(20), pages 1950-1962, April.
    2. Kenneth W. Clements & Liang Li, 2014. "Valuing Resource Investments," Economics Discussion / Working Papers 14-27, The University of Western Australia, Department of Economics.
    3. Dean Katselas & Baljit K. Sidhu & Tom Smith & Chuan Yu, 2019. "Independently Certified Industry‐specific Disclosures to the Capital Market: The JORC Code in the Australian Mining Industry," Abacus, Accounting Foundation, University of Sydney, vol. 55(1), pages 128-179, March.
    4. Fox, Kenneth A., 2017. "The usefulness of NI 43-101 technical reports for financial analysts," Resources Policy, Elsevier, vol. 51(C), pages 225-233.
    5. Kowalewski, Oskar & Śpiewanowski, Piotr, 2020. "Stock market response to potash mine disasters," Journal of Commodity Markets, Elsevier, vol. 20(C).
    6. Cox, Benjamin & Innis, Sally & Mortaza, Adnan & Kunz, Nadja C. & Steen, John, 2022. "A unified metric for costing tailings dams and the consequences for tailings management," Resources Policy, Elsevier, vol. 78(C).

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    More about this item

    Keywords

    Voluntary disclosure; Debt financing; Feasibility study; Gold; Development stage enterprises;
    All these keywords.

    JEL classification:

    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

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