Glossary: ADRs, Foreign Taxes & Mining Terms

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A

ADR (American depositary receipt): A U.S. security, issued by a depositary bank, that represents a set number of shares of a foreign company held in custody abroad. ADRs trade and pay dividends in U.S. dollars. Learn more →
ADR ratio: The number of underlying foreign shares one ADR represents. It can be one share, several shares or a fraction of a share, and it is needed to compare the ADR price with the home-market price. Learn more →
ADS (American depositary share): The actual unit of ownership that an ADR certificate evidences. In everyday use, ADR and ADS mean the same thing. Learn more →
Assay: A laboratory analysis that measures how much metal is in a rock or drill-core sample. Assay results are the raw data behind drill-result press releases. Learn more →

C

CSE (Canadian Securities Exchange): A Canadian stock exchange that lists many early-stage companies, including mining explorers. It is separate from the TSX and TSX Venture Exchange. Learn more →
Currency hedging: Using forward contracts or similar tools to offset changes in exchange rates, so a foreign investment's return comes closer to its local-currency return. Hedging has costs and gives up gains when the foreign currency rises. Learn more →
Custodian: The bank in the foreign company's home country that holds the underlying shares on behalf of the depositary bank while the ADRs are outstanding. Learn more →
Cut-off grade: The minimum grade at which mineralized material is counted in a resource or reserve estimate. Lowering the cut-off usually adds tonnes while reducing the average grade. Learn more →

D

Depositary bank: The U.S. bank that creates and cancels ADRs, keeps the register of holders, converts and distributes dividends, and charges the program's fees. Learn more →

E

Expert Market: An OTC Markets tier for securities that lack current public information. Quotes are not shown to the public and are visible only to broker-dealers and professional or sophisticated investors. Learn more →

F

FBAR (FinCEN Form 114): An annual report a U.S. person files with FinCEN when the combined value of foreign financial accounts exceeds $10,000 at any time during the calendar year. It is filed separately from the tax return. Learn more →
Feasibility study: The most detailed and highest-confidence engineering and economic study of a mining project. It cannot use inferred resources and is the basis for major financing and construction decisions. Learn more →
Flow-through shares: Newly issued Canadian shares that let a resource company pass certain exploration expenses through to investors, who can deduct them on their Canadian taxes. The tax benefit is designed for Canadian taxpayers. Learn more →
Foreign ordinary share: The actual home-market share of a foreign company, quoted in the U.S. over the counter in dollars rather than through an ADR. OTC symbols for these often end in F. Learn more →
Foreign tax credit: A U.S. tax credit that offsets, dollar for dollar, income tax paid to a foreign country, such as dividend withholding. Limits apply. Learn more →
Form 1116: The IRS form used to calculate the foreign tax credit. Investors whose only foreign income is passive income reported on 1099s, with creditable foreign tax of $300 or less ($600 joint), can elect to skip it. Learn more →
Form 20-F: The annual report a foreign private issuer files with the SEC, roughly the counterpart of a U.S. 10-K. It is due within four months of fiscal year-end. Learn more →
Form 40-F: The annual report eligible Canadian companies file with the SEC under the Multijurisdictional Disclosure System, largely built from their Canadian disclosure documents. Learn more →
Form 6-K: The form a foreign private issuer uses to furnish information it makes public at home, files with an exchange, or sends to shareholders, such as interim results and press releases. Learn more →
Form 8621: The IRS form a U.S. shareholder of a passive foreign investment company (PFIC) uses to report the investment and any QEF or mark-to-market election. Learn more →
Form 8938: The IRS form for reporting specified foreign financial assets under FATCA. For unmarried taxpayers living in the U.S., the threshold is more than $50,000 at year-end or more than $75,000 at any time during the year. Learn more →
Fully diluted shares: The share count assuming all outstanding warrants, options and convertible securities are exercised or converted. It shows how far existing ownership could be spread. Learn more →
FX spread: The gap between the exchange rate a broker or bank gives you and the market rate, which acts as a hidden currency conversion cost. Learn more →

G

Gram-metre: A drill-result shorthand equal to grade in grams per tonne multiplied by intercept length in metres. It allows rough comparison of short high-grade and long low-grade intervals. Learn more →

I

IFRS (International Financial Reporting Standards): Accounting standards set by the International Accounting Standards Board and used by listed companies in the EU, U.K., Canada, Australia and many other markets. The SEC accepts IFRS statements from foreign private issuers without reconciliation to U.S. GAAP. Learn more →
Indicated mineral resource: The middle confidence category of mineral resource. Geological evidence is sufficient to support mine planning and economic evaluation in a pre-feasibility study. Learn more →
Inferred mineral resource: The lowest confidence category of mineral resource, estimated from limited sampling. It cannot be converted to a reserve, and a PEA that uses it must carry cautionary language. Learn more →

L

Lassonde curve: An informal model of how a mining company's share price tends to rise on discovery, sag during studies and permitting, and rise again into production. It is a pattern, not a prediction. Learn more →
Level I ADR: An ADR program that trades only over the counter and cannot raise capital. It is the only level that may be unsponsored, and the company does not file annual reports with the SEC. Learn more →
Level II ADR: An ADR program listed on a U.S. national exchange that does not raise capital. The company files annual reports with the SEC on Form 20-F. Learn more →
Level III ADR: An ADR program listed on a U.S. exchange and used to raise capital through a registered public offering. It carries the fullest SEC reporting obligations. Learn more →

M

Mark-to-market election: A PFIC election available for regularly traded stock. Each year the shareholder reports any rise in value as ordinary income, with losses deductible only up to prior inclusions. Learn more →
Measured mineral resource: The highest confidence category of mineral resource, based on detailed and closely spaced sampling. Learn more →
Mineral reserve: The economically mineable part of a measured or indicated resource, shown by at least a pre-feasibility study. Reserves are classed as probable or proven. Learn more →
MJDS (Multijurisdictional Disclosure System): An SEC system, adopted in 1991, that lets eligible Canadian companies meet many U.S. registration and reporting requirements largely with Canadian disclosure documents. Learn more →

N

NI 43-101: Canada's National Instrument governing how companies disclose scientific and technical information about mineral projects, including the requirement for a qualified person and technical reports. Learn more →

O

OTCID Basic Market: An OTC Markets tier launched July 1, 2025, replacing Pink Current. Companies must provide timely financial disclosure and an annual management certification. Learn more →
OTCQB: OTC Markets' Venture Market tier for early-stage and developing companies, including many Canadian juniors. It requires current reporting. Learn more →
OTCQX: OTC Markets' highest tier, with qualification standards and ongoing disclosure requirements. Many large foreign companies quote here. Learn more →

P

PEA (preliminary economic assessment): An early-stage economic study of a mineral project. It may include inferred resources but cannot show that a project is economically viable. Learn more →
PFIC (passive foreign investment company): A foreign corporation with 75% or more of gross income from passive sources, or at least 50% of its assets producing passive income. U.S. holders face punitive default tax rules unless they make an election. Learn more →
PFS (pre-feasibility study): A mid-stage mining study that selects a preferred mining and processing method with a financial analysis. It cannot rely on inferred resources and is the minimum study needed to declare reserves. Learn more →
Pink market: OTC Markets' group of tiers below OTCQX and OTCQB. As of 2026 it includes Pink Limited, a warning tier for securities with limited or stale disclosure, while the Expert Market holds securities whose quotes the public cannot see. Learn more →
Private placement: A sale of new shares, often with warrants, directly to selected investors rather than through a public offering. Common in junior mining, it adds to the share count and resale may be restricted for a hold period. Learn more →

Q

QEF election (qualified electing fund): A PFIC election under which the shareholder reports a share of the company's ordinary earnings and net capital gain each year, whether or not it is distributed. It requires annual information from the company. Learn more →
Qualified dividend: A dividend taxed at the lower long-term capital gains rates. Foreign dividends can qualify if the company is a qualified foreign corporation and you meet the holding period of more than 60 days in the 121-day window around the ex-dividend date. A treaty-eligible company, or one whose stock or ADRs list on a U.S. exchange, can count as qualified. Learn more →
Qualified person: Under NI 43-101, an engineer or geoscientist with relevant experience and professional standing who is responsible for a mineral project's technical disclosure. Learn more →

R

Rule 12g3-2(b): An SEC exemption that lets a foreign company with a primary listing abroad avoid SEC registration if it publishes English-language versions of key documents electronically. Many unsponsored ADRs and OTC ordinaries rely on it. Learn more →
Rule 15c2-11: The SEC rule governing when broker-dealers may quote OTC securities. Amendments effective in 2021 require current, publicly available issuer information before quotes can be published. Learn more →

S

Section 17(b): The anti-touting provision of the Securities Act of 1933. Anyone promoting a security for compensation must disclose the payment, including its amount and who paid it. Learn more →
SEDAR+: The Canadian Securities Administrators' system for filing and searching public company documents, launched in July 2023 to replace SEDAR. Learn more →
SEDI: The System for Electronic Disclosure by Insiders, where Canadian company insiders report their trades. Future phases of SEDAR+ are planned to replace it. Learn more →
Share consolidation: A reverse split that combines existing shares into fewer shares, for example one new share for every ten old ones. It changes the count and price per share, not the company's value. Learn more →
Sponsored ADR: An ADR program set up under an agreement between the foreign company and a depositary bank, which handles recordkeeping, dividends and shareholder communications. Learn more →

T

Tax treaty: An agreement between the U.S. and another country that, among other things, can reduce the dividend withholding tax rate for U.S. residents. Learn more →
True width: The actual thickness of a mineralized zone, as opposed to the length of the drill intercept, which can be longer when the hole crosses the zone at an angle. Learn more →
TSX Venture Exchange: Canada's exchange for early-stage companies, home to many junior mining explorers. It is operated by TMX Group alongside the senior Toronto Stock Exchange. Learn more →

U

Unsponsored ADR: An ADR program created by a depositary bank without the foreign company's formal involvement. It trades only over the counter, and more than one bank may run competing programs on the same stock. Learn more →

W

Warrant: A security giving the holder the right to buy shares at a set price before an expiry date. Junior miners often issue warrants with private placements, adding potential dilution. Learn more →
Withholding tax: Tax a foreign country deducts from dividends before they reach you. The rate depends on the country's law and any tax treaty. Learn more →

Educational content only, not investment, tax or legal advice. The Stateside Report does not recommend buying or selling any security. Tax rules depend on your situation; confirm with a qualified tax professional. Full disclosures.