Subject: File No. S7-41-10
From: John H Estess
Affiliation: Retired

January 12, 2011

33-9164 COMMENTS

I am an investor. I do not currently own directly any shares of stock in any mining company or related industries. I have never worked in the mining industries. My interests are solely from an investor stand point. The mining industries must be held to a higher reporting standard than other industries due to the associated risks. In a non-mining industry if a single product gets recalled the company stock may decrease in value. Unless this is a one product company the other products should continue to earn revenue. If there is a major incident in a mine it could stop all revenue from coming in and the operation could show negative cash flow. This higher degree of risk should be clearly stated in the required reports along with the indicators of possible problems.


1.) Has any mine been shutdown with out going through the court system?

2.) Why is it that when the public hears about a mine incident we also hear about a number of past violations or citations?

3.) What are the responsibilities of the lessee, owners and operators if there is an incident?


A. Required disclosure in periodic reports.

1. Scope

I agree that disclosures should apply only to the mines located in the United States. Full disclosure of mines outside of the United States would place the operators at a financial disadvantage

I agree that smaller reporting companies and foreign private issuers should be included in the disclosure requirements. Some of the smaller operators may not be able to cost wise compete with the larger operators. Consideration should be given to assist the smalleroperators but not at the risk omitting important facts.

All disclosures for any citations, orders or violations should be listed separately for each mine and totaled for every owner and operator. The volume of information may increase but when you use investors monies we expect full disclosure as you would for a non-mining industry.


(1) Subsidiary and any other words in question should be defined to minimize any erroneous interpretations. I agree with the proposed definition of subsidiary.

(2) The disclosure should be expanded to cover mines in all jurisdictions. The disclosure requirements regulations should be changed to have clear mine safety regulations.

(3) Consideration should be given to smaller reporting companies. However, if investor funds are being used a simpler but full disclosure system must be in place. If a smaller reporting company has a history of violations then the reporting requirements should be enhanced.

(4) Foreign private issuers should be exempt from full disclosures as this is not the area controlled by the SEC. However, foreign private issuers should meet all United States safety requirements. This would be similar to United States operators not reporting on foreign mine activities.

(5) If you are using investor funds you should have full and fair disclosure at each mine. The results should not be combined for a group of mines. If the results were combined the results could possible hide a bad performer. Each mine should stand alone. Investors and not interested in an average performance alone. We want to see the details.
If it is not consistent with section 1503(A) of the act then that should be changed also.

(6) Neither of the special provisions should be allowed. Only full disclosures should be included in all required reports.


(7) Mine safety disclosures should be in each and every report filled with the commission. If the act states that disclosures must be in each periodic report, then investors would expect to find them there.

(8) A specific presentation in a tabular form is preferred. This way it is a lot easier for an investor to compare results from different owners or operators and individual mines. I would encourage owners and operators to add additional information as appropriate.

(9) The information would be best presented in an exhibit to periodic reports. If the information is included in the base report it just adds to the volume of the information. I would change Mine Safety Matters. This makes it sound like every mine has issues. I would suggest Mine Safety Summary.

(10) The information should have an as of date and this should be inclued in the registration statements. Again, full and fair disclosures.

(11) The disclosure should not be provided in an interactive data format. This would make the data reporting more complex and add unnecessary cost to the reporting system. I suggest a report (attachment) with an as of date and a clear link to where to find the latest information.


(12) Form 10-K should include disclosures for orders, citations, violations and assessments by quarter and aggregate for the whole year. If this is not clear and consistent in section 1503(A) then it should be revised to indicate such.

(13) All orders, violations and citations received during any reporting period should be shown with that report and accumulated annually as well. I suggest a matrix of how many of each type were received and an indication if the orders, violations and citations are open or closed. Further, the report should also show if the issue was dismissed or reduced. Again. Full and fair disclosures so there are no surprises at a later date. I would also provide an area for short replies by owners or operators.


(14) Every violation under the section 104 of the mine act should be disclosed. Full Disclosure.

(15) The proposal is appropriate.

(16) Issuers should not be permitted to exclude proposed assessments that are being contested. If this was permitted an operator could contest everything to make the reporting look better. Issuers should be permitted to note contested amounts separately. Further, a summary of past proposed assessments should be included. Also, a summary of how old the assessments are and the status of action should be presented.

(17) The disclosure of mining related fatalities should be limited to the United States mines. The quality of the information on disclosures of mining related activities outside of the United States could very greatly and distort the overall performance.

(18) The disclosure should not include fatalities not chargeable to the mining industry. An instruction to the rule specifying this interpretation should be added. Guidance should be provided for reporting timing of fatalities. Along with the fatalities reporting I would like to see a report on lost man hours due to accidents.

(19) If disclosure of mining related fatalities is required regardless of location of the mine then the MSHA framework should be used. Again, the quality of the information would be in question.

(20) The proposal is appropriate. Information about pending legal actions should be disclosed periodically along with updates in subsequent reports.

(21) The required information in the proposal should be included for each pending legal action.

(22) A brief description of each category of violations, orders and citations should be reported to investors along with a link to where a detailed report can be found.

(23) The proposal should be revised to minimize duplicate disclosures. It would be consistent with the act. The proposed disclosure approach would be unduly burdensome for issuers and possibly cause confusion to investors.

(24) The proposed changes should be sufficient for now. The proposed information should be very useful to investors.

(25) The filing period for a form 8-K should be no longer than 4 days. If additional information becomes available then a revised form should be submitted.

(26) Foreign private investors should have the same reporting requirements. In order to minimize paperwork a Form 8-K should be submitted if only to reference that the information can be found in the Form 6-K. The reporting requirements should be as equal as possible for all. United States issuers should not be put at a disadvantage. This should be address in the rules. Foreign investors may have additional burdens or costs associated with reporting in the United States. This could be some what the same as the United States would have in a foreign country.


(27) The general Instruction I.A. 3(b) of Form S-3 should be amended as proposed. Failure to file a required report on time should be reported to investors immediately. This could be a Red Flag for larger problems.

(28) The loss of Form S-3 eligibility is serious. The failure to disclose all filing failures can be even more serious. Failure to file a report on time may be an indication of larger problems. I agree with the proposal that a failure should not be considered an immediate violation but excess or repeatedly missing filing dates should be.