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The mining capital markets are experiencing a genuine re-awakening. In the first eight months of 2025, mining companies completed 837 financings raising C$6.4 billion on TSX and TSXV—a 25% increase over the same period in 2023.1 The combined TSX/TSXV market capitalization hit an all-time record of C$6 trillion in Q4 2025, with the mining sector alone exceeding C$1 trillion.2 Canadian exchanges maintain their global leadership position, accounting for 47% of global public mining financings over the past five years.3
However, capital availability does not equal regulatory latitude. History demonstrates that bull markets breed compliance complacency. Financing structures that appear routine are adopted without critical examination of their regulatory foundation. In the current environment, this approach carries significant risk. Regulators and exchanges have become more sophisticated in their review of financing transactions, and what passed without comment in previous cycles now attracts scrutiny.
This article examines five critical areas where regulatory risk is most acute for mining issuers in 2026: the accredited investor exemption, finder's fees and registration requirements, disclosure obligations under NI 43-101, cross-border financings involving U.S. investors, and pre-IPO bridge financings.
1. The Accredited Investor Exemption: Substance Over Form
The accredited investor exemption under Section 2.3 of National Instrument 45-106 remains the most commonly relied-upon exemption in mining financings. However, regulatory expectations have quietly but materially escalated since the 2015 amendments introduced mandatory risk acknowledgement requirements.
Issuers must now obtain a signed risk acknowledgement in Form 45-106F9 from individual investors qualifying under the C$1 million financial assets test, the C$200,000/$300,000 income test, or the C$5 million net assets test.4 This form must be obtained before, or at the same time as, the individual signs the subscription agreement. The requirement does not apply to individuals qualifying under the C$5 million financial assets test (paragraph j.1), reflecting regulatory judgment that such investors require less protection. The signed form must be retained for eight years. Failure to obtain the form where required results in loss of the exemption for that particular distribution.
More fundamentally, Companion Policy 45-106CP confirms that the exemption belongs to the transaction, not to the investor.5 While issuers may rely on investor self-certification, this creates only a rebuttable presumption. Where circumstances would put a reasonable issuer on inquiry as to whether an investor actually qualifies, self-certification alone is insufficient. Enhanced diligence becomes necessary where red flags exist about investor status (for example, a recent graduate claiming C$1 million in financial assets), in promotional contexts involving broad marketing campaigns or repeated financings, or where related parties such as family members of management are participating.
Issuers should document their verification procedures. Where enhanced diligence is warranted, consider requiring supporting evidence such as recent brokerage statements, tax returns or Notices of Assessment, net worth statements, or third-party confirmation letters from registered broker-dealers, investment advisers, licensed attorneys, or CPAs (which must be dated within 90 days of the investment). Creating an audit trail documenting who verified investor status, what information was reviewed, the conclusion reached, and when verification was completed is essential for demonstrating compliance years after a financing closes.
2. Finder's Fees: The Registration Minefield
Until 2017, mining issuers in Western Canada frequently engaged unregistered finders to assist with private placements under the "Northwest Exemption." That environment no longer exists. In 2017, the BC Securities Commission effectively ended the Northwest Exemption's application in most financing contexts. The default regulatory position is now clear: finders must be registered under National Instrument 31-103 or confined to extremely limited activities.
The 2017 BC Court of Appeal decision in Birch v. GWR Resources Inc.6 illustrates the commercial and legal risks of informal finder arrangements. Ron Birch, a former registered investment adviser who was no longer registered, was approached by GWR Resources' president with the informal promise: "Find us some money and we'll look after you." Birch arranged meetings between GWR and potential investors. After several unsuccessful meetings, one of his introductions resulted in a C$1.8 million investment. When Birch requested payment of a finder's fee, GWR refused on the basis that Birch was not registered under securities laws and that TSXV Policy 5.1 prohibited payment of finder's fees to employees (Birch had become a part-time employee during the relevant period).
GWR faced a legal catch-22: paying Birch would constitute compensating unregistered trading activity (a potential breach of securities law), while not paying would expose GWR to civil liability for unjust enrichment. The courts held that GWR must pay the finder's fee despite the securities law concerns, noting that the TSXV had discretion to waive its policy restrictions and GWR should have sought that waiver. The case demonstrates that verbal promises create enforceable obligations even where performance may violate securities law, and that written agreements do not cure underlying registration violations.
An unregistered person may, in very limited circumstances, make an introduction and be compensated for that introduction. However, the scope of permissible activity is extremely narrow: making an initial introduction (providing name and contact information only), providing a term sheet (characterized by regulators as a "skeletal outline" without extensive business discussion), and referring prospective investors to publicly available information. Not permitted: negotiating terms or pricing, discussing investment merits, providing advice, describing company prospects, handling subscription documents, conducting due diligence discussions, or following up with investors.
Issuers sometimes attempt to structure finder compensation through advisory agreements, consulting arrangements, or success fees nominally tied to "business development." Regulators apply substance-over-form analysis. If the economic reality is that compensation is tied to financing success and the person introduced investors, the arrangement will be characterized as finder activity regardless of labeling. For cross-border financings, the rule is absolute: any person receiving compensation on U.S. sales must be a U.S. registered broker-dealer.7 Canadian EMD registration does not satisfy U.S. requirements.
3. Disclosure Obligations Under NI 43-101: When Enthusiasm Becomes Liability
National Instrument 43-101 governs all public disclosure about mineral projects, including written documents, oral statements, websites, investor presentations, and social media. The BCSC, which regulates 65% of Canadian mining reporting issuers, has signaled that promotional enthusiasm does not override disclosure obligations.8
Proposed 2025 amendments to NI 43-101 reflect regulatory awareness of actual investor behavior. Survey data revealed that 36-37% of retail investors actually read technical reports when making investment decisions—substantially higher than the 10-15% regulators had assumed.9 This evidence-based understanding of investor engagement is shaping regulatory expectations around disclosure quality.
Common violations identified in CSA Staff Notice 43-309 and OSC Staff Notice 51-722 include: unbalanced disclosure that emphasizes upside without equal prominence to risks; insufficient basis for forward-looking statements such as production targets without economic studies or timeline projections without realistic assessment; Qualified Person issues including disclosure not prepared or approved by a QP or QP not being independent when required; and social media discipline failures such as director tweets about discoveries before proper disclosure or management podcast appearances with premature guidance.10
Issuers should establish a disclosure committee comprising senior management, legal counsel, and the Qualified Person to review all material disclosure before release. Implement written procedures specifying who can speak publicly, what topics require pre-approval, and how social media posts are cleared. Document the basis for all forward-looking statements at the time they are made, including what assumptions were relied upon and what technical data supports the statement.
4. Cross-Border Financings: U.S. Investor Participation
Approximately 40% of TSX/TSXV mining trading originates outside Canada, with U.S. institutional investors and high-net-worth individuals representing a significant capital source.11 However, U.S. securities laws apply to U.S. persons, creating layered compliance obligations that issuers must navigate carefully.
Canadian private placements typically rely on NI 45-106 prospectus exemptions with generally acceptable self-certification and 4-month hold periods. U.S. private placements require compliance with the Securities Act of 1933 registration requirement or exemptions under Regulation D, state registration or exemptions, and Form D filing requirements. Critically, issuers must comply with both jurisdictions simultaneously for the same investor.
Regulation D, Rule 506(b) is the primary U.S. exemption for Canadian mining financings. Key features include unlimited capital raising, accredited investors plus up to 35 "sophisticated" non-accredited investors (rarely used in practice), no general solicitation or advertising, Form D filing within 15 days of first sale, and state law preemption except for notice filing and fees.12 The U.S. accredited investor definition parallels the Canadian definition but verification requirements differ: while Canadian regulations generally accept self-certification, Rule 506(b) requires issuers to have a reasonable belief that investors are accredited, placing a greater burden on issuers to verify investor qualifications through consideration of employment, financial sophistication, and supporting documentation.
U.S. Private Placement Memoranda must be more detailed than Canadian Offering Memoranda, requiring detailed business model analysis, comprehensive risk factors, competitive landscape assessment, extensive management compensation details, and dilution analysis. Additional U.S. requirements include detailed investor questionnaires establishing sophistication and accredited status, investment representation letters confirming investment intent and resale restrictions, and subscription agreements with U.S.-specific representations and warranties.
Form D must be filed with the SEC within 15 days of first sale and in each state where sales occurred. Common failures include filing too late or never, incorrect information, forgetting state filings, and filing after sales are completed rather than during the 15-day window. Consequences can include loss of exemption in some states, state enforcement actions, SEC inquiries, and potential rescission offers. Best practice: calendar the deadline, pre-draft Form D, file within 5 days as a buffer, and confirm state requirements.
5. Pre-IPO and Bridge Financings: When Private Becomes Quasi-Public
Mining issuers typically progress through multiple financing rounds before going public. The regulatory concern arises when an issuer conducting private placements begins to function as a quasi-public entity without corresponding disclosure obligations. By the third or fourth financing round, issuers often use professional investor materials, financial models and projections, market analyses, and valuation memos. Promotional activity escalates through conference presentations, media coverage, and social media. Liquidity discussions emerge including expected listing timelines, anticipated IPO valuations, and exit strategies.
The disclosure trap occurs when early investor materials conflict with later prospectus disclosure. Consider a common scenario: in 2024, the issuer's investor deck states "We believe mineralization extends 500m along strike." In 2025, the technical report for IPO states "Drilling to date suggests potential for 200-300m strike length." Early investors claim misleading disclosure and demand rescission. This happens because of bull market enthusiasm, competitive pressure to attract investors, management optimism bias, insufficient technical basis for early statements, and no Qualified Person review of early materials.
Specific risk areas include valuation discussions (avoid stating "target valuation of $100M at IPO" or "expected listing price"), resource and production projections (avoid "we expect to define 2M ounce resource" without supporting technical work), timeline representations (avoid "listing confirmed for Q2 2026" without acknowledging contingencies), and secondary market expectations (avoid "stock will be liquid post-listing" without disclaimers).
Best practices for maintaining disclosure consistency include: treating every financing as if prospectus-level scrutiny will apply because materials could be produced in litigation or enforcement years later; requiring Qualified Person review of all investor materials including decks, presentations, and website content; documenting the basis for every forward-looking statement at the time it is made; maintaining a disclosure binder containing all investor materials used in each round with contemporaneous notes; and escalating legal review appropriately, with bridge and pre-IPO rounds involving the same counsel who will handle the listing.
Exchange and regulatory review of listing applications examines all prior financings, not just the last 12 months. Common reasons for delays include disclosure inconsistencies between rounds, undisclosed related party transactions, finder fee issues involving unregistered dealers, and valuation concerns suggesting artificial pricing. Remedy timelines run a minimum of 30-60 days and can extend to six months or more, potentially requiring amended disclosure, rescission offers, restated financials, or new technical reports.
Conclusion
The mining capital markets offer genuine opportunity in 2026. The C$6.4 billion raised in the first eight months of 2025, the 67% surge in TSXV financings, and the C$6 trillion combined market capitalization confirm that risk capital has returned to the sector. Critical minerals demand projections showing 3× to 90× growth by 2050 and multi-billion dollar government support through the Critical Minerals Strategy provide a favorable long-term backdrop.
However, the regulatory environment has fundamentally changed. National security scrutiny of foreign investment in critical minerals, individual accountability for directors and officers in enforcement proceedings, enhanced disclosure expectations informed by investor engagement data, and cross-border compliance complexity have all escalated. "Market practice" is no longer a defense, informal arrangements create liability, and speed without discipline equals risk.
Issuers should implement immediate action items: review current finder arrangements for registration compliance, audit recent financings for Form 45-106F1 and risk acknowledgement compliance, document accredited investor verification procedures, engage securities counsel early in financing planning (not after term sheets are signed), and for issuers with critical minerals assets, assess foreign investment implications before engaging non-Canadian investors.
In a market where capital is again available, competitive advantage belongs to the best-prepared issuers, not the fastest. Financing structures that prioritize regulatory compliance alongside commercial efficiency will enhance credibility with investors, exchanges, and future strategic partners. The regulatory environment in 2026 rewards preparation, transparency, and professionalism. Mining issuers have a choice: lead with compliance, or be led to remediation.
Footnotes
1. Junior Mining Network, "The Mining Money Trail: Junior Mining Financing Heats Up in 2025" (November 26, 2025), online: https://markets.financialcontent.com/stocks/article/marketminute-2025-11-26-the-mining-money-trail-junior-mining-financing-heats-up-in-2025.
2. The Logic, "The TSX is competing for global mining capital like never before" (December 8, 2025), online: https://thelogic.co/news/analysis/tsx-mining-capital/.
3. TMX Group, "~40% of the World's Public Mining Companies are Listed on TSX and TSXV" (2025), online: https://www.tsx.com/en/listings/listing-with-us/sector-and-product-profiles/mining.
4. National Instrument 45-106 Prospectus and Registration Exemptions, s. 2.3(6)-(7).
5. Companion Policy 45-106CP Prospectus Exemptions, s. 3.4.
6. Birch v. GWR Resources Inc., 2017 BCCA 184.
7. Securities Exchange Act of 1934, 15 U.S.C. § 78o(a)(1).
8. BC Securities Commission, "Mining" (2025), online: https://www.bcsc.bc.ca/industry/issuer-regulation/guidance-by-sector/mining.
9. Discovery Alert, "Understanding NI 43-101 Changes for Mining Professionals in 2025" (September 1, 2025), online: https://discoveryalert.com.au/national-instrument-43-101-changes-2025/.
10. CSA Staff Notice 43-309 Review of Website Investor Presentations by Mining Issuers; OSC Staff Notice 51-722 Report on a Review of Mining Issuers' Management's Discussion and Analysis and Guidance.
11. TMX Group, supra note 3.
12. Securities Act of 1933, 17 C.F.R. § 230.506(b).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
