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What is new in the
JORC Code?
ASX Perth
February 2006
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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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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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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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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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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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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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Changes in 2004 JORC Code
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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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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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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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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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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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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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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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.
Changes in 2004 JORC Code
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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.
Changes in 2004 JORC Code
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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.
Changes in 2004 JORC Code
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Other Codes and International
Developments
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Other Codes and International
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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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.
Other Codes and International
Developments
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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.
Other Codes and International
Developments
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Current Topics of Interest
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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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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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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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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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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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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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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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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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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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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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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