jorc code – background, operation, and the competent person · jorc code – background,...

JORC Code – Background, operation, and the Competent Person AMC Consultants Pty Ltd

Peter Stoker, Principal Geologist Mark Berry, Principal Geologist

Outline of first presentation: the JORC Code

• Part 1 Overview • Part 2 Basic elements of the JORC Code • Part 3 General JORC Code reporting framework • Part 4 Specific JORC Code reporting requirements • Part 5 Competent Person requirements • Part 6 Some frequently asked questions

Use and reproduction of the 2004 and 2012 JORC Codes by AMC has been authorised by the Joint Ore Reserves Committee (JORC). AMC acknowledges JORC as the copyright owner of the Codes. © ASX Limited ABN 98 008 624 691 (ASX) 2011. All rights reserved. Chapter 5 of the ASX Listing Rules and Guidance Note 31 are reproduced with the permission of ASX. This material should not be reproduced, stored in a retrieval system or transmitted in any form whether in whole or in part without the prior written permission of ASX. The views expressed in this workshop are the authors’, and do not necessarily reflect the views of JORC.

PART 1: Overview

• The JORC Code – Background – What it is and isn’t

• Australian Securities Exchange (ASX) Listing Rules and relevance to minerals reporting

• Background to the implementation of the 2012 JORC Code and new ASX Listing Rules

• The continuing transition provisions

The 2012 JORC Code

READ THE CODE!!!! JORC, 2012. Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code) [online]. Available from: <http://www.jorc.org> (The Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia).

Effective 20 December 2012 and mandatory from 1 December 2013.

About the JORC Code

• The JORC Code is a professional code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources, and Ore Reserves.

• It provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources, and Ore Reserves according to the levels of confidence in geological knowledge and technical/economic considerations in Public Reports.

• Public Reports prepared in accordance with the JORC Code are reports prepared for the purpose of informing investors or potential investors and their advisors. They include, but are not limited to, annual and quarterly company reports, press releases, information memoranda, technical papers, website postings, and public presentations of Exploration Results, Mineral Resources, and Ore Reserves estimates.

About the JORC Code (2)

• First released in 1989 and included in ASX Listing Rules. Latest revision released in 2012.

• Mandatory reporting standard for companies reporting in Australia to ASX, APX (Australia Pacific Exchange), and NSX (National Stock Exchange), and in New Zealand to the NZX (New Zealand Stock Exchange ).

• Mandatory reporting standard for members of the Australasian Institute of Mining and Metallurgy (AusIMM) and the Australian Institute of Geoscientists (AIG). Regarded as best practice by the Minerals Council of Australia (MCA) and Financial Services Institute of Australasia (FinSIA).

• Australian Securities and Investments Commission (ASIC) requires adherence in public reports, initial public offerings (IPOs), take-over documents, etc.

• Highly influential in developing international reporting standards.

The JORC Code: principles based, not prescriptive (Clause 4)

Transparency clear unambiguous

presentation

Materiality all reasonable

information expected

Competence based on work

by Competent Person

JORC-compliant

reports

Discussed in more detail later

The JORC Code: what it does

• Sets minimum standards for public reporting (in Australia and New Zealand) of Exploration Results, Mineral Resources, and Ore Reserves.

• Provides a mandatory system for classification of tonnage/grade estimates 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.

The JORC Code: does not

• Regulate the procedures used by Competent Persons to estimate and classify Mineral Resources and Ore Reserves: – It is a Code for reporting, for the benefit of investors.

• Regulate companies’ internal classification or reporting systems. • JORC does not deal with breaches of the Code:

– In Australia, breaches by companies are dealt with by ASX. – Breaches by individuals are dealt with under the code of ethics of AIG,

AusIMM, or the Recognised Professional Organisation (RPO).

ASX Listing Rules and relevance to minerals reporting Companies listed on the ASX are required to report on their activities according to the ASX Listing Rules. In particular:

• Chapter 3 “Continuous disclosure”, particularly Listing Rule (LR) 3.1. • Chapter 5 “Additional reporting on mining and oil and gas production and

exploration activities”, particularly from LR 5.6 onwards and, importantly, LR 5.45 “Terms of a mining tenement and petroleum tenement joint venture”.

• Chapter 19 “Interpretation and definitions”.

Listed entities are not only contractually bound to comply with the Listing Rules, the rules are enforceable against the listed entities and their associates under the Corporations Act (Sections 793C and 1101B).

ASX Listing Rules and relevance to minerals reporting (2) The ASX Listing Rules (Rule 5.6) require adherence to the JORC Code when reporting Exploration Results, Mineral Resources, and Ore Reserves. In Clause 9, the JORC Code requires identification of the Competent Person who "signs off" on resource and reserve disclosures.

In Australia, regulatory responsibility for disclosure to shareholders and investors in connection with fundraisings, takeovers, and other corporate activities arises in connection with the broader corporations law requirements. This requires proper disclosure of Exploration Results, Mineral Resources, and Ore Reserves under the JORC Code (on a reasonable basis) and also under the Trade Practices Act 1974.

Further details available in an article by Phillips on the JORC website.

Securities Exchange reporting requirements

• Public reports made to the ASX or other stock exchange need to consider the rules of the exchange as well as the JORC Code.

+ Listing Rules (for example, in Australia

refer to ASX Listing Rules and Guidance Note 31)

= Public Reporting that meets all

requirements

Background to the introduction of the 2012 JORC Code • A number of ASX Companies Updates had been issued related to JORC

Code matters. • 114 responses to the JORC Issues Paper on improvement of the JORC

Code in October 2011. • Comments on the Issues Paper confirmed strong support for the JORC

Code to remain a principles-based code. Comments also highlighted there was a need for improved disclosure standards, and a greater balance between the core principles of Transparency, Materiality, and Competence in Public Reporting.

• JORC received 82 written submissions in response to an Exposure Draft. • In parallel, the ASX reviewed the listing rules related to minerals industry

reporting requirements.

Background to the introduction of the 2012 JORC Code (2) A common distortion of Principles from Clause 4 in the 2004 JORC Code had been noticed resulting in:

Transparency

unclear unambiguous presentation

Materiality selected

reasonable information

expected

Competence Based on work by Competent Person

JORC Compliant Reports?

Continuing transition provisions

The JORC Code 2012 Edition and the new ASX Listing Rules relating to the disclosure of reserves and resources by ASX-listed mining and oil and gas exploration and production companies came into effect on 1 December 2013, after a 12 month transition period from the previous reporting requirements.

From 1 December 2013, all Public Reports must comply with the JORC Code 2012 Edition and the new ASX Listing Rules.

There is an exception for the requirement for studies at Pre-Feasibility or Feasibility level to define an Ore Reserve for public reporting; this requirement is not mandatory until 1 December 2014. See the answer to FAQ 9* at:

http://www.asx.com.au/regulation/compliance/asx-mining-reporting-faqs.htm#pre-feasibility-study

*ASX mining reporting – frequently asked questions

http://www.asx.com.au/regulation/compliance/asx-mining-reporting-faqs.htm#pre-feasibility-study

PART 2: Basic elements of the JORC Code

• Principles: Transparency, Materiality, and Competence • Key defined terms • The importance of resource and reserve classification • Relationship between Exploration Results, Mineral Resources, and

Ore Reserves

Principles of the JORC Code

• Transparency – Transparency requires that the reader of a Public Report is provided

with sufficient information, the presentation of which is clear and unambiguous, to understand the report and not be misled by this information or by omission of material information that is known to the Competent Person. i.e. clear and unambiguous.

This slide contains extracts only of Clause 4, 2012 JORC Code

Principles of the JORC Code (2)

• Materiality – Materiality requires that a Public Report contains all the relevant

information that investors and their professional advisers would reasonably require, and reasonably expect to find in the report, for the purpose of making a reasoned and balanced judgement regarding the Exploration Results, Mineral Resources, or Ore Reserves being reported. Where relevant information is not supplied an explanation must be provided to justify its exclusion. i.e. all the information reasonably required and expected.


Principles of the JORC Code (3)

• Competence – Competence requires that the Public Report be based on work that is

the responsibility of suitably qualified and experienced persons who are subject to an enforceable professional code of ethics (the Competent Person). i.e. based on work undertaken by Competent Persons.


Defined terms

The JORC Code provides an explicit set of terms to be used in Public Reports, together with specific definitions, including:

• Exploration Target • Exploration Results • Mineral Resources, subdivided into:

– Inferred, Indicated, and Measured Mineral Resources

• Ore Reserves, subdivided into: – Probable and Proved Ore Reserves

• Technical Studies: – Scoping Study – Pre-Feasibility Study – Feasibility Study

• Significant project • Material change • “if not, why not”

Definition: Exploration Target (Clause 17) • “An Exploration Target is a statement or estimate of the exploration

potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade (or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource.”

• “All disclosures of an Exploration Target must clarify whether the target is based on actual Exploration Results or on proposed exploration programmes. Where the Exploration Target statement includes information relating to ranges of tonnages and grades these must be represented as approximations. The explanatory text must include a description of the process used to determine the grade and tonnage ranges used to describe the Exploration Target.”


Definition: Exploration Results (Clause 18)

• “Exploration Results include data and information generated by mineral exploration programmes that might be of use to investors but which do not form part of a declaration of Mineral Resources or Ore Reserves.

• The reporting of such information is common in the early stages of exploration when the quantity of data available is generally not sufficient to allow any reasonable estimates of Mineral Resources”.

• Examples include: results of outcrop sampling, assays of drillhole intercepts, geochemical results, and geophysical survey results.


Definition: Mineral Resources (Clause 20)

• “A ‘Mineral Resource’ is a concentration or occurrence of solid material of economic interest in or on the Earth’s crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), continuity and other geological characteristics of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.

• All reports of Mineral Resources must satisfy the requirement that there are reasonable prospects for eventual economic extraction (ie more likely than not), regardless of the classification of the resource.”


Definition: Ore Reserves (Clause 29)

• “An ‘Ore Reserve’ is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.

• The reference point at which Reserves are defined, usually the point where the ore is delivered to the processing plant, must be stated. It is important that, in all situations where the reference point is different, such as for a saleable product, a clarifying statement is included to ensure that the reader is fully informed as to what is being reported.”


Definitions: Technical Studies (Clauses 37 to 40) • Clauses 37 to 40 provide definitions of Scoping Study, Preliminary

Feasibility Study (Pre-Feasibility Study), and a Feasibility Study. • These definitions are the internationally agreed definitions included

in all CRIRSCO (Committee for Mineral Reserves International Reporting Standards) Codes and Standards.

• These definitions are output-based rather than input-based.

Definition: Significant project (Appendix 1)

• “An exploration or mineral development project that has or could have a significant influence on the market value or operations of the listed company, and/or has specific prominence in Public Reports and announcements.”

• This is also similar to the definition of a “material mining project” in the ASX Listing Rules.

This slide contains an extracts from Appendix 1, 2012 JORC Code

Definition: Material change (Clause 5)

• “A material change could be a change in the estimated tonnage or grade or in the classification of the Mineral Resources or Ore Reserves. Whether there has been a material change in relation to a significant project must be considered by taking into account all of the relevant circumstances, including the style of mineralisation. This includes considering whether the change in estimates is likely to have a material effect on the price or value of the company’s securities.”


“If not, why not” (Clause 5)

• “For the purposes of the JORC Code the phrase ‘if not, why not’ means that each item listed in the relevant section of Table 1 must be discussed and if it is not discussed then the Competent Person must explain why it has been omitted from the documentation.”


Classification: one of the key aspects of reporting under the JORC Code • The JORC Code provides a mandatory system for classification of

tonnage/grade estimates according to geological confidence and technical/economic considerations.

• Using this classification system allows the Competent Person to communicate their confidence in the estimate to the multiple users of the information.

General relationship between Exploration Results, Mineral Resources, and Ore Reserves (Figure 1, 2012 JORC Code)

PART 3: General JORC Code reporting framework • New public reporting triggers • Importance of materiality and transparency • Instructions introducing Table 1 • Additional guidance on reporting requirements for Competent

Persons in Table 1 • Some key mandatory requirements for reporting in compliance with

the JORC Code

New triggers for Public Reporting

To comply with both the 2012 JORC Code and the ASX Listing Rules for significant projects (defined as material mining projects in ASX Listing Rules) when reporting initial results or estimates, or reporting results or estimates which have materially changed from when they were last reported, the following information needs to be prepared:

• Competent Person’s internal documentation (always required for any report but normally not publicly released).

• Public Report addressing all those points identified as requiring prominent reporting in the JORC Code and in ASX Listing Rules 5.7, 5.8, and 5.9, in the body of the Public Report.

• As an appendix to the Public Report, a completed Table 1 (from the JORC Code) for the relevant sections of the table as identified in the ASX Listing Rules on an “if not, why not” basis.

When do we need to follow this enhanced reporting?

Yes No Yes No Yes NoSIGNIFICANT PROJECT √ √ √First Time Report X √Material Change since last reported X √

ASXListing Rules 5.8 & 5.9 Mandatory List

X X √

Table 1 "if not,why not" appendix X X √

Material information in a transparent manner √ √

New triggers for Public Reporting (2)

If companies are not publicly reporting initial results or estimates for significant projects, or reporting results or estimates that have not materially changed from when they were last reported, the additional information specified in the previous slide is not required.

However, as addressed in the answer to FAQ 2: “To avoid misleading readers, an entity that reports results or estimates post-transition for a significant/material mining project that were originally reported under the 2004 JORC Code and have not been updated since to comply with the new disclosure rules, should make it clear that the information has been prepared in accordance with the 2004 Code rather than the new disclosure rules. A statement along the following lines should suffice:

‘This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported’.”

This slide contains extracts only of FAQ 2, ASX website

Additional explanation of principles (Clause 4) “Transparency and Materiality are guiding principles of the Code, and the Competent Person must provide explanatory commentary on the material assumptions underlying the declaration of Exploration Results, Mineral Resources or Ore Reserves.

In particular, they must consider that the benchmark of Materiality is that which includes all aspects relating to the Exploration Results, Mineral Resources or Ore Reserves that an investor or their advisers would reasonably expect to see explicit comment on from the Competent Person. The Competent Person must not remain silent on any material aspect for which the presence or absence of comment could affect the public perception or value of the mineral occurrence.”


Expansion of reporting principles (Clause 5 and introduction to Table 1) “Table 1 provides a checklist or reference of criteria to be considered by the Competent Person in developing their documentation and in preparing the Public Report.

In the context of complying with the principles of the Code, comments relating to the items in the relevant sections of Table 1 should be provided on an ‘if not, why not’ basis within the Competent Person’s documentation. Additionally comments related to the relevant sections of Table 1 must be complied with on an ‘if not, why not’ basis within Public Reporting for significant projects (see Appendix 1 Generic Terms and Equivalents) when reporting Exploration Results, Mineral Resources or Ore Reserves for the first time. Table 1 also applies in instances where these items have materially changed from when they were last Publicly Reported. Reporting on an ‘if not, why not’ basis is to ensure that it is clear to an investor whether items have been considered and deemed of low consequence or are not yet addressed or resolved.”

Similar guidance is included in the introduction to Table 1. This slide contains extracts only of Clause 5, 2012 JORC Code

Key mandatory reporting requirements

• When reporting Exploration Results, Mineral Resources, and Ore Reserves, use only the terms set out in Figure 1. Terms such as “geological ore reserves”, “mineable resources”, “exploration resources”, “mining inventory” etc., are not permitted in Public Reports;

• When reporting both Mineral Resources and Ore Reserves, include a clarifying statement that clearly indicates whether the Resources are inclusive of, or additional to the Reserves;

• Mineral Resources must not be aggregated with Ore Reserves; • Report the categories of Mineral Resources (Measured, Indicated, and

Inferred) and Ore Reserves (Proved and Probable) separately, not only as total Mineral Resources and total Ore Reserves;

Key mandatory reporting requirements (2)

• Do not report Mineral Resources and Ore Reserves in terms of contained metal or mineral content unless the corresponding tonnages (volume) and grades (quality) are also presented;

• Do not assign estimates of tonnage and average grade to mineralisation not classified as a Mineral Resource or an Ore Reserve (i.e. at the Exploration Results stage), unless done so in compliance with Clause 17 (2012) with respect to Exploration Targets;

• Clearly express any descriptions of Exploration Targets or exploration potential in reports so that they are not capable of being misinterpreted as an estimate of Mineral Resources or Ore Reserves;

• Note the special requirements for reporting of diamonds and gemstones with respect to quality (as opposed to grade);

PART 4: Specific JORC Code reporting requirements • Exploration Targets and Exploration Results • Pre-Feasibility level required for an Ore Reserve declaration • Mineral Resources • Ore Reserves • Metal equivalents • In situ or ‘in ground’ values

Reporting of Exploration Targets

• In the 2012 JORC Code, Clause 17 now defines an Exploration Target and clarifies the reporting of Exploration Targets. The term is defined as it is used extensively in the ASX Listing Rules.

• It is included under the heading Reporting General instead of the Reporting of Exploration Results heading, to make it clear that it is separated from the “main stream” reporting of Exploration Results and Mineral Resources.

• Previously placed between Exploration Results and Mineral Resources sections, exploration targets (2004 Code) were viewed by many in the same light as “pre-resource mineralisation”, which was removed in 1992.

Exploration Target (Clause 17)

Clause 17 of the 2012 JORC Code also explains how that terminology may be used within a Public Report. The clause emphasises the importance of ensuring that a reported Exploration Target cannot be misconstrued or misrepresented as a Mineral Resource or Ore Reserve, and that all disclosures of an Exploration Target must clarify whether the target is based on actual results or a proposed exploration programme.

Clause 17 of the 2012 JORC Code is a significant expansion and further development of Clause 18 of the 2004 JORC Code. The definition of Exploration Target is now identical to the CRIRSCO definition.

Additional requirements for Exploration Results (Clause 19) “Clear diagrams and maps designed to represent the geological context must be included in the report. These must include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.”

“As required under Clause 4 and 5, the Competent Person must not ‘remain silent on any issue for which the presence or absence of comment could impact the public perception or value of the mineral occurrence’. For significant projects the reporting of all criteria in sections 1 and 2 of Table 1 on an ‘if not, why not basis’ is required, preferably as an appendix to the Public Report. Additional disclosure is particularly important where inadequate or uncertain data affect the reliability of, or confidence in, a statement of Exploration Results; for example, poor sample recovery, poor repeatability of assay or laboratory results, etc.”


Additional requirements for Mineral Resources (Clause 27) “In a Public Report of a Mineral Resource for a significant project for the first time, or when those estimates have materially changed from when they were last reported, a brief summary of the information in relevant sections of Table 1 must be provided or, if a particular criterion is not relevant or material, a disclosure that it is not relevant or material and a brief explanation of why this is the case must be provided.”


Additional requirements for Mineral Resources (Clause 27) (2) “For a significant project, when Mineral Resource estimates are first Publicly Reported or when a material change occurs (including classification changes), there is an increased need for transparent discussion of the basis for the new Mineral Resource estimate in order that investors are appropriately informed of the basis for the changes. As noted in Clauses 4 and 5 the benchmark of Materiality is that which an investor or their advisors would reasonably expect to see explicit comment on from the Competent Person, thus the reporting of all relevant criteria in Table 1 on an ‘if not, why not’ basis is required.”

“The Technical summary based against Table 1 criteria should be presented as an appendix to the Public Report.”

Note: This guidance relates directly to ASX Listing Rule requirements.


Study at Pre-Feasibility level required for an Ore Reserve declaration (Clause 29) Clause 29 of the 2012 Code requires that at least a study at Pre-Feasibility level has been conducted as part of estimating an Ore Reserve for inclusion in a Public Report. This new requirement establishes a minimum benchmark for the level of technical and economic study that is undertaken to examine the Modifying Factors as part of any Ore Reserve estimate that is included in a Public Report.

This enhancement brings the JORC Code, 2012 Edition, into line with the other international reporting codes and standards.

Note: There is an additional 12 months transition period for the implementation of this requirement to 1 December 2014.

Additional requirements for Ore Reserves (Clause 35) “In a Public Report of an Ore Reserve estimate for a significant project for the first time, or when those estimates have materially changed from when they were last reported, a brief summary of the information in relevant sections of Table 1 must be provided or, if a particular criterion is not relevant or material, a disclosure that it is not relevant or material and a brief explanation of why this is the case must be provided.

For a significant project, when Ore Reserve estimates are first Publicly Reported or when a material change occurs (including classification changes), there is an increased need for transparent discussion of the basis for the new Ore Reserve estimate in order that investors are appropriately informed of the basis for the changes.”


Additional requirements for Ore Reserves (Clause 35) (2) “As noted in Clauses 4 and 5 the benchmark of Materiality is that which an investor or their advisers would reasonably expect to see explicit comment on from the Competent Person, thus the reporting of all criteria in Table 1 on an ‘if not, why not’ basis is required.”

“The Technical summary based against Table 1 criteria should be presented as an appendix to the Public Report.

Where there are as yet unresolved issues potentially impacting the reliability of, or confidence in, a statement of Ore Reserves (for example, limited geotechnical information, complex orebody metallurgy, uncertainty in the permitting process, etc) those unresolved issues should also be reported.

If there is doubt about what should be reported, it is better to err on the side of providing too much information rather than too little.

Uncertainties in any of the criteria listed in Table 1 that could lead to under- or over- statement of Ore Reserves should be disclosed.”


Metal equivalents (Clause 50) Clause 50 of the JORC Code, 2012 Edition, introduces new requirements for Public Reporting of Exploration Results, Mineral Resources, or Ore Reserves in terms of metal equivalents. There was no equivalent clause in the 2004 Edition, so this new clause is extremely important for any Competent Person or company issuing a Public Report dealing with metal equivalents estimates.

The clause is based on the information previously included in ASX Companies Update 03/07, prepared jointly by ASX and JORC.

In situ or ‘in ground’ values (Clause 51)

Clause 51 of the JORC Code, 2012 Edition, introduces a new prohibition on the publication of in situ or ‘in ground’ financial valuations in a Public Report.

In situ or ‘in ground’ financial valuations are inconsistent with the requirements of the Code as they do not take account of the Modifying Factors and are incompatible with the Code’s reporting terminology (as set out in Figure 1, and throughout the Code).

This new clause is based on information previously included in ASX Companies Update 03/08, also prepared jointly by ASX and JORC.

PART 5: Competent Person requirements

• Definition • Am I a Competent Person? • Competent Person consent requirements • Guidance and protection for Competent Persons • Recognised Professional Organisation (RPO) • Complaints procedures (AusIMM and AIG)

What is a Competent Person? (Clause 11)

“A ‘Competent Person’ is a minerals industry professional who is a Member or Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian Institute of Geoscientists, or of a ‘Recognised Professional Organisation’ (RPO), as included in a list available on the JORC and ASX websites. These organisations have enforceable disciplinary processes including the powers to suspend or expel a member.

A Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking.

If the Competent Person is preparing documentation on Exploration Results, the relevant experience must be in exploration. If the Competent Person is estimating, or supervising the estimation of Mineral Resources, the relevant experience must be in the estimation, assessment and evaluation of Mineral Resources. If the Competent Person is estimating, or supervising the estimation of Ore Reserves, the relevant experience must be in the estimation, assessment, evaluation and economic extraction of Ore Reserves.”

Am I a Competent Person? (Self-test questions) • Do I belong to an appropriate professional organisation?

– Appropriate membership of the AusIMM, AIG, or a RPO.

• Do I have at least the required minimum relevant experience? – Must have a minimum of five years relevant experience in the style of mineralisation

or type of deposit under consideration and to the activity which that person is undertaking.

– The key qualifier in the definition of a Competent Person is the word “relevant”. – “Relevant” also means that it is not always necessary for a person to have five years

experience in each and every type of deposit in order to act as a Competent Person.

• Am I satisfied that I could face my peers and demonstrate competence in the commodity, type of deposit, and situation under consideration? – If doubt exists, the person should either seek opinions from appropriately experienced

colleagues or should decline to act as a Competent Person.

Competent Person’s consent

Initial Public Reports must:

• Name the Competent Person and the Competent Person’s firm or employer. • Any potential for a conflict of interest by the Competent Person or a related party must be

disclosed in accordance with the Transparency principle. Any other relationship of the Competent Person with the Company making the report must also be disclosed in the Public Report.

• State that the public report is based on the documentation compiled by the Competent Person; obtain the prior written consent of the Competent Person(s) to the “form and context” in which the public report refers to the information in the documentation prepared by the Competent Person.

• Include a statement that this (prior written) consent has been obtained; this is now facilitated by the existence of the Competent Person Consent Form (available from the JORC website). The onus is on the company to obtain approval, but the Competent Person should encourage observation of the requirement.

Competent Person’s consent (2)

For any subsequent Public Report that reissues previously reported Exploration Results or estimates of Mineral Resources or Ore Reserves (cross-referencing the relevant Public Report that contains the Competent Person’s consent), then subsequent Competent Person’s consents to publish are not required. However, the company must confirm in the subsequent Public Report that:

• “it is not aware of any new information or data that materially affects the information included in the relevant market announcement”; and

• “In the case of estimates of Mineral Resources or Ore Reserves, the company confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.”

Note: ASX Listing Rule 5.23 restricts this relief to the more restricted circumstances where the previous report must have been in accordance with ASX Listing Rules 5.7, 5.8, and 5.9. The relief does not apply to annual reports (ASX Listing Rule 5.24).

Guidance for Competent Persons

The Code provides guidance for Competent Persons:

• All key clauses include guidelines to help in interpretation of the Code.

• Competent Persons should be familiar with all of the guidelines. • Table 1 is an extensive checklist and guideline for Competent

Persons and others when preparing documentation and public reports.

• Competent Persons and others need to be aware that reporting on an “if not, why not” basis is now required in certain circumstances.

Protection of Competent Persons

The Code provides protection for Competent Persons:

• It represents industry best practice. • If the Competent Person follows the Code honestly and diligently, it

will provide a strong measure of due diligence protection. • Information on the legal issues and liability associated with the

responsibility of Competent Persons will be covered by Kym Livesley in the next presentation.

Summary of Competent Person issues

• Regulation of the estimator, not the estimation. • Requirement for membership of a self-regulating professional body

(AusIMM, AIG, or a RPO) provides mechanism to make the Competent Person accountable.

• The JORC Code and its implementation has created a climate that minimises the likelihood of abuse.

RPO requirements

The aim of the RPO system is to enhance the Competent Person provisions of the JORC Code and ASX Listing Rules by promoting and facilitating international reciprocity of Competent Persons. RPO’s:

• Must be a self-regulatory organisation covering professionals in the mining and/or exploration industry;

• Must admit members primarily on the basis of their academic qualifications and experience;

• Must require compliance with the professional standards of competence and ethics established by the organisation; and

• Must have disciplinary powers, including the power to suspend or expel a member.

Current List of RPOs 25 September 2014 http://www.jorc.org/competent.asp

Recognised professional organisation Minimum membership class required Institute of Materials, Minerals and Mining Member (MIMMM) or Fellow (FIMMM) Geological Society of London Chartered Geologist (CGeol), Chartered Scientist

(CSci) or European Geologist (EurGeol) Institute of Geologists of Ireland Professional Geologist (PGeo) European Federation of Geologists European Geologist (EurGeol) Mining and Metallurgical Society of America Qualified Professional (QP) American Institute of Professional Geologists Certified Professional Geologist (CPG) Society for Mining, Metallurgy & Exploration SME Registered Member Engineering Council of South Africa Professional Engineer (Pr Eng) South African Council for Natural Scientific Professions Professional Natural Scientist (Pr.Sci.Nat.) Geological Society of South Africa Member or Fellow The Southern African Institute of Mining and Metallurgy Member or Fellow South African Council for Professional and Technical Surveyors Mine Surveyors and Professional Mine Surveyors Professional Engineers Ontario P.Eng. Association of Professional Engineers and Geoscientists of British Columbia P.Geo, or P.Eng, Association of Professional Engineers and Geoscientists of Manitoba P.Geo, or P.Eng, Association of Professional Geoscientists of Ontario P.Geo., P.Geo.(limited), P.Geo.(Temporary) Association of Professional Engineers and Geoscientists of Newfoundland and Labrador P.Eng., P.Geo. Association of Professional Engineers, Geologists and Geophysicists of the Northwest Territories P.Eng, P.Geo (or P.Geol., P.Geoph.) Association of Professional Geoscientists of Nova Scotia P.Geo. Association of Professional Engineers and Geoscientists of New Brunswick P.Geo., P.Eng. Association of Professional Engineers, Geologists and Geophysicists of Alberta P.Eng., P.Geo., P.Geoph. Association of Professional Engineers and Geoscientists of Saskatchewan P.Geo. or P.Eng. Ordre des Geologues du Québec P.Geo., géo. Ordre des Ingénieurs du Québec P. Eng. or ing. Comisión Calificadora de Competencias en Recursos y Reservas Mineras (Chilean Mining Commission or Comisión Minera)

Registered Member

Russian Society of Subsoil Use Experts (OERN) Expert

UK and Europe

USA

South Africa

Canada

Chile and Russia

http://www.jorc.org/competent.asp

Compliance monitoring and breach investigation JORC does not undertake compliance monitoring or investigate breaches of the JORC Code:

• Breaches by companies are dealt with by ASX, and ASX routinely monitors reporting compliance with the JORC Code.

• Breaches by individuals are dealt with under the Code of Ethics of AIG, AusIMM, or the RPO. None of these organisations routinely monitors compliance of its members with respect to the JORC Code. These organisations will internally investigate alleged breaches of the JORC Code by its members upon receipt of a written complaint.

AusIMM and AIG Code of Ethics All members are bound by this code

AusIMM and AIG complaints procedure

PART 6: Frequently asked questions

• Resources and reserves previously reported under the 2004 Code • What is a significant project (material mining project)? • What is a material change? • The need for operating mines to have a Pre-Feasibility study to

support Ore Reserves • Streamlined Competent Person sign-off provisions

Resources and Reserves previously reported under the 2004 JORC Code Do companies need to reissue reports of exploration results or estimates of Mineral Resources or Ore Reserves previously reported under the 2004 JORC Code?

If the project is not a significant project or there has been no material change in the results, estimates, or underlying assumptions, then the short answer is: it is not necessary to reissue those reports.

Resources and Reserves previously reported under the 2004 JORC Code (2) This matter is more fully covered in question 2 in the “ASX mining reporting – frequently asked questions” available on the ASX and JORC websites, at:

http://www.asx.com.au/regulation/compliance/asx-mining-reporting-faqs.htm

where additional guidance is provided.


Resources and Reserves previously reported under the 2004 JORC Code (3) “To avoid misleading readers, an entity that reports results or estimates post-transition for a significant/material mining project that were originally reported under the 2004 JORC Code and have not been updated since to comply with the new disclosure rules should make it clear that the information has been prepared in accordance with the 2004 Code rather than the new disclosure rules. A statement along the following lines should suffice:

‘This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported’.”

Resources and Reserves previously reported under the 2004 JORC Code (4) However, if companies wish, they may upgrade the reporting to fully comply with the requirements of the new ASX Listing Rules and the 2012 JORC Code even although there has been no material change to the previous reporting.

In that case, the company could then take advantage of the revised Competent Person sign-off requirements available under the new reporting requirements; see question 10 in the “ASX mining reporting – frequently asked questions”.

What is a significant project or material mining project for “if not, why not” reporting “The JORC Code 2012 defines a ‘significant project’ as an exploration or mineral development project that has or could have a significant influence on the market value or operations of a listed company, and/or has specific prominence in Public Reports and announcements.

The new Listing Rules define ‘material mining project’ for a listed entity as one “that meets the following criteria:

(a) the entity or a child entity has an economic interest in the mining project (whether alone or jointly with others); and

(b) that interest is, or is likely to be, material in the context of the overall business operations or financial results of the entity and its child entities (on a consolidated basis).

Appendix 1 to the JORC Code 2012 makes it clear that the term “significant project” is synonymous with “material project”. Section 2.2 of Guidance Note 31 has further guidance on the meaning of “material mining project” under the Listing Rules.”

Extract from ASX mining reporting – frequently asked questions, no. 3

What is a material change for “if not, why not” reporting “Whether or not there has been a material change in information reported pre-transition requiring an updated report under the new disclosure rules must be tested by reference to the new disclosure rules. In this regard, Clause 5 of the JORC Code 2012 provides the following guidance:

‘A material change could be a change in the estimated tonnage or grade or in the classification of the Mineral Resources or Ore Reserves. Whether there has been a material change in relation to a significant project must be considered by taking into account all of the relevant circumstances, including the style of mineralisation. This includes considering whether the change in estimates is likely to have a material effect on the price or value of the company’s securities.’

Guidance Note 31 also notes that whether there has been a material change in the estimates of mineral resources or ore reserves for a material mining project that will trigger an obligation to update those estimates under Listing Rule 5.8 or 5.9 respectively, must be tested by reference to the last reported estimates of those items. These may have been the initial estimates first announced by the entity or a subsequent announcement of materially changed estimates.”

Ultimately, this must come down to a matter of judgment by the entity concerned.


Operating mines and the need for a Pre-Feasibility Study to report Ore Reserves “From 1 December 2014, clause 29 of the JORC Code 2012 will require Ore Reserves to be ‘defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors’.

It should be noted that Clause 29 of the JORC Code does not require a formal Pre-Feasibility or Feasibility Study, but rather ‘studies at Pre-Feasibility or Feasibility level’. That is, the information related to the Modifying Factors must be at ‘Pre-Feasibility or Feasibility level’.

Where an entity has an operating mine for an Ore Reserve, its Life of Mine Plan would generally be expected to contain information at better than Pre-Feasibility or Feasibility level for the whole range of inputs normally required for a Pre-Feasibility or Feasibility study and this would meet the requirement in Clause 29 for the Ore Reserve to continue that classification. Where, however, its Life of Mine Plan does not contain information at Pre-Feasibility or Feasibility level, it will have to upgrade its Life of Mine Plan to Pre-Feasibility or Feasibility level before 1 December 2014 or else downgrade the Ore Reserve to a Mineral Resource.”


Operating mines and the need for a Pre-Feasibility Study to report Ore Reserves (2) “Where an entity does not have an operating mine and it has not undertaken studies at the Pre-Feasibility or Feasibility level as appropriate before declaring an Ore Reserve, it will need to do so before 1 December 2014 or else downgrade the Ore Reserve to a Mineral Resource.”

Any material change to an Ore Reserve on or after 1 December 2013 will need to comply with the new disclosure rules, including the requirement for the publication of a brief summary of the information in relevant sections of Table 1, or if a particular criterion is not relevant or material, a disclosure that it is not relevant or material and a brief explanation of why this is the case, and a Table 1 ‘if not, why not’ report for sections 1, 2, 3, and 4 of Table 1.


Streamlined Competent Person sign-offs when re-reporting previous results “If a Competent Person previously provided consent to a report prepared in accordance with JORC Code 2004, can the entity repeat the information post-1 December 2013 without obtaining a consent from that Competent Person?

As far as the JORC Code is concerned, the answer is ‘yes’.

However, as far as the Listing Rules are concerned, the answer is ‘no’, unless:

• the information does not relate to a material mining project (because the Competent Person sign-off requirements in the Listing Rules only apply to material mining projects); or

• if the information does relate to a material mining project, it has been updated to conform to the new disclosure requirements in Listing Rules 5.7 (exploration results), 5.8 (mineral resources) or 5.9 (ore reserves), as applicable.”

The streamlined Competent Person sign-off requirements in Listing Rule 5.23 only apply to information reported “in accordance with” Listing Rules 5.7, 5.8, or 5.9. This effectively requires the information to have been updated to conform to the requirements of those Listing Rules.


FAQs: For more information

Joint ASX, ASIC, and JORC initiative:

“ASX mining reporting – frequently asked questions” are downloadable from ASX and JORC websites: http://www.asx.com.au/regulation/compliance/asx-mining-reporting-faqs.htm

or as a pdf: http://www.asx.com.au/documents/asx-compliance/mining-faq.pdf

AusIMM Monograph 23 (revised and reissued as Monograph 30), and released in early 2014

Covering new developments and reporting under the enhanced reporting standards JORC 2012 and new ASX Listing Rules.


http://www.asx.com.au/documents/asx-compliance/mining-faq.pdf

More than 6,500 projects across more than 92 countries

Our Experience

• Geotechnical Engineering

• Corporate Consultancy

• Business Improvement

• Mining

• Geology

• Coal & Energy

• Feasibility Studies

AMC – the business of mining

jorc code – background, operation, and the competent person · jorc code – background,...

Documents