2006 Jorc Education

8/4/2019 2006 Jorc Education

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What is new in the

JORC Code?

ASX Perth

February 2006


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February 2006

Outline

The JORC Code Introduction &

Background

Changes in 2004 JORC Code Other Codes and International

Developments

Current Topics of Interest Frequently Asked Questions

Discussion.


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The JORC Code

Introduction & Background


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February 2006

Introduction

Model for other national Mineral Resource

and Ore Reserves Codes

Major strengths

Incorporation of the JORC Code into the ASX

Listing Rules in 1989

Periodic updating of the Code.


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February 2006

The JORC Code

Setsminimum standards for public reporting (in Australia & New

Zealand)of Exploration Results, Mineral Resources and Ore

Reserves

Provides a mandatory system for classification of tonnage/gradeestimates according to geological confidence and

technical/economic considerations

Requires Public Reports to be based on work undertaken by a

Competent Person;describes the qualifications and type of

experience required to be a Competent Person

Provides extensive guidelines on the criteria to be considered when

preparing reports on Exploration Results, Mineral Resources and

Ore Reserves.


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February 2006

The JORC Code Does Not ..

Regulate the procedures used by Competent Persons to

estimate and classify Mineral Resources and Ore

Reserves

Regulate companies internal classification or reporting

systems

Deal with breaches of the Code by

Companies (ASX)

Individuals, these are dealt with under code of ethics of AIG

and AusIMM or the relevant ROPO.


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February 2006

Current JORC Members

Chairman: Mr Peter Stoker (AusIMM)

Deputy Chairs: Mr Mark Adams (AusIMM)

Ms Alice Clark (AusIMM)

Mr Rob Behets (MCA) Mr John Dow (AusIMM)

Mr Damian Dwyer (MCA) Mr Gerry Fahey (AIG)

Mr Peter Forrestal (MCA) Mr Max Fowles (ASX)

Mr Steve Hunt (AIG) Mr Chris Roberts (AIG)

Mr Warren Staude (SIA) Mr Pat Stephenson (AusIMM)

Mr John Vann (AIG) Mr Gavin Yeates (MCA)(co-opted) Mr Tim Goldsmith (AusIMM)

Dr Bill Shaw (AIG)

(ex- officio) Mr Don Larkin (AusIMM)

Secretariat: The AusIMM.


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Changes in the

2004 JORC Code


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February 2006

Recognised Overseas Professional

Organisations

Naming of Competent Person (transfer from

ASX listing rules)

Competent Person required for Exploration

Results

Consolidation of Reporting of ExplorationResults (transfer from ASX listing rules)

Reporting of Exploration Targets.

Changes in 2004 JORC Code


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February 2006


Encouragement to quantify risk/uncertainty

Revised Diamond Reporting

Revised Coal Reporting

Introduction of Industrial Mineral Reporting

guideline

New Appendix 1Generic Terms and

Equivalents Guideline on level of study expected for Ore

Reserves.


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February 2006

Recognised Overseas

Professional Organisations (ROPOs)

1999 Code was unduly restrictive

Competent Persons must belong to AusIMM or AIG

ASX list of ROPOs (currently 21) for overseasCompetent Persons

Referenced in the 2004 Code.


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February 2006

Recognised Overseas

Professional Organisations (ROPOs)

Canada

Similar system

South Africa

Currently implementing a ROPO system

Similar professional standards to AusIMM and AIG Ability to enforce Rules of Conduct or Codes of Ethics

The ROPO convention facilitates international

reciprocity of Competent Persons.


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February 2006

ROPOs are currently accredited in

Europe

Canada

United States

South Africa

Detailed list

http://www.asx.com.au/professionals/pdf/ropo_letternovember_2005standalone.pdf

Current list of ROPOs
http://www.asx.com.au/professionals/pdf/ropo_letternovember_2005standalone.pdfhttp://www.asx.com.au/professionals/pdf/ropo_letternovember_2005standalone.pdfhttp://www.asx.com.au/professionals/pdf/ropo_letternovember_2005standalone.pdfhttp://www.asx.com.au/professionals/pdf/ropo_letternovember_2005standalone.pdf


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February 2006

Reporting of Exploration Results

1999 Code

Public Report on explorationresults did not

require the involvement of a Competent Person 2004 Code

Requirement to involve a Competent Person forExploration Results introduced

This is where it all began!


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February 2006

Reporting of Exploration Targets

1999 Code

No clear distinction between reporting ofexploration results and exploration targets

2004 Code

Clause 18 clarifies the reporting of explorationtargets ( separated from the clause on reporting ofExploration Results)

This approach is designed to facilitateresponsible reporting by all explorers.


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February 2006

Clause 18 - Reporting of

Exploration Targets

It is common practice for a company to comment on and discuss itsexploration in terms of target size and type

Should not be misrepresented or misconstrued as an estimate of

Mineral Resources or Ore ReservesThe terms Resource and Reserve must not be used in this context

Any statement referring to potential quantity and grade of the targetmust be expressed as ranges and must include

(1) a detailed explanation of the basis for the statement, and

(2) a proximate statement that the potential quantity and grade isconceptual in nature, that there has been insufficientexploration to define a Mineral Resource and that it isuncertain if further exploration will result in the determinationof a Mineral Resource.


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February 2006

Resource/Reserve risk and uncertainty

Competent Persons are encouraged to quantify

risk/uncertainty attaching to resource/reserve estimates(see Guidelines to Clauses 24 & 32 and Table 1)

Not a mandatory requirement

Reflecting mining project evaluation and increasingly

common professional practice.



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February 2006

Clause 28 - Level of technical/economic study expectedto have been carried out to convert Mineral Resourcesto Ore Reservesachievable mine plan

Requirements for reporting of Exploration Resultstransferred from ASX listing rules to Code

The diamond and other gemstone reportingrequirements consolidated and revised

Guidelines for the reporting of Industrial Mineralsintroduced

Modification of the coal clauses and recognition of thenew Coal Guidelines.



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February 2006

Consolidation of reporting of Exploration Results

1999 Code

ASX listing rules included additional requirements

for reporting of exploration results

2004 Code

Transferred to the Code and removed from the ASX

Listing Rules to consolidate the requirements forreporting of Exploration Results.



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Other Codes and International

Developments


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February 2006


Developments

Further developments in Resource/Reservereporting issues underway

Driven by international forces, principally overseasregulators

Australia has led the international negotiationsthrough

Success of the JORC Code

Very successful CMMI/CRIRSCO initiative.


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February 2006

USA

SME Reserves Working Group

Recommendations Concerning Estimation and

Reporting of Mineral Resources and MineralReserves

Aimed at resolving differences with SEC

Chile & Peru

New JORC based codes

South Africa

SAMREC update underway.


Developments


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February 2006

IASB

Extractive Industries Accounting Standard

Request to investigate alignment of the mineral and

petroleum reporting codes

UN-ECE

Classification Framework revision recently

completed

CRIRSCO

International reporting template development.


Developments


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Current Topics of Interest


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February 2006

Reporting Issues

Reporting of Inferred Resources

Submissions called from industry Quarter 4 2005

Subcommittee to report end Quarter 1 2006

Lack of (or incorrect) statements regarding theCompetent Person Clause 8 is clear on Public Report requirements

Use of incorrect terminology

Terms such as "Probable Resources", "Geological Resources",

"In situReserves", "Mining Reserves", Mining Inventory,"Possible Reserves" have no meaning under the Code and maynot be used in public reports

Such terms may be used in internal company reports if thecompany so wishes, although care should be taken not to createconfusion since they are inconsistent with Code terminology.


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February 2006

Resource and Reserve

Categorisation

The Code does not allow statements in public reports

which provide only total figures for Mineral Resources

or Ore Reserves

Clause 25 - Mineral Resource estimates must beallocated to the defined categories of Measured,

Indicated and Inferred

Clause 33 - Ore Reserve estimates must be allocated to

the defined categories of Proved and Probable.


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February 2006

Reporting of Only Contained

Metal

Clauses 25 and 33 do not allow the reporting of

contained metal without also reporting Mineral

Resource or Ore Reserve tonnages and grades

It is relevant to the potential investor to know whethera quoted quantity of contained metal is the product of a

large tonnage of low grade material or of a small

tonnage of high grade material

Quoting contained metal without also quoting gradescan, particularly for Mineral Resources, result in a

potential investor inferring a value for the deposit

which is totally at variance with its true realisable

value.


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February 2006

Relationship between Mineral

Resources and Ore Reserves

Clause 34 requires that, where both Mineral Resourcesand Ore Reserves are reported, it is made clearwhether the Mineral Resources are inclusive of, oradditional to the Ore Reserves

Mineral Resources and Ore Reserves, being "apples"and "pears", should not be added together

Large differences between tonnages of MineralResources and Ore Reserves may be an indication thatnot all of the Resources meet the JORC Coderequirement of reasonable prospects for eventualeconomic extraction.


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February 2006

Reference to Assessment

Criteria (Table 1)

Clause 17 - Report of Exploration Results must include

information on sampling of the mineralisation such as

drilling/sampling density, drilling/sampling

methodology, sample and assay quality, and so on

Clauses 26 and 35 - Reports of Mineral Resources

and/or Ore Reserves must make mention of any

assessment criteria for which inadequate or poor

quality data materially affects estimation orclassification of the resource or reserve.


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February 2006

Historical or Overseas

Resources These may seem difficult to report in accordance with the

JORC Code

Continuous disclosure requirements may mean it isdesirable to report information which cannot be reported in

a timely manner in accordance with the JORC Code, e.g. anacquisition in Kazakhstan, or the acquisition of an olderuranium resource.

The ASX Companies Update (05-04, 25 March 2004)requires companies to consult the ASX before making any

announcement, with the common direction being to Clause18

It is also possible to apply for a waiver from the ListingRules to cover specific circumstances, for instance aprospectus.


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February 2006

ASX Monitoring

ASX have increased monitoring of company

reports

Steps are underway to form a review panel to

assist the ASX in this process.


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Frequently Asked Questions


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February 2006

Who polices the JORC Code?

Companies must comply with ASX listing

requirements

Competent Persons must conform to their instituteCode of Ethics

JORC is an advisory body.


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February 2006

Many examples of reports that appear may not be in

accordance with the JORC Code

They should do something is the cry

But who isthey and how do we know if they are doingsomething?

The most importantthey is you.

What should you do? Look on the JORC website for

advice. But dont expect someone else to do it for you.It is our industry and we all must ensure the standards

are kept high.

Who polices the JORC Code?


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February 2006

What is the expected confidence of

Measured, Indicated and Inferred?

It is accepted that publicly stated resources and

reserves are estimates

The JORC Code is not prescriptive. It does not define

the methodology to use, nor does it define the requiredaccuracy or precision of estimates

The Competent Person has sufficient experience to

know what is required, and it is his or her reputation

that is on the line

Some guidance is provided in the definitions.


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February 2006

Conclusions

JORC Code was born following a period

of poor industry reporting standards

JORC Code continues to be the basis forInternational Codes

Reporting standards need to be

maintained and improved Increased monitoring activity is planned.


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Discussion

Documents

2006 Jorc Education