Guidance on ASX Announcements Steve Hunt, Chairman JORC JORC 2012 Workshop Sydney 6 th May 2014
Disclaimer While this presentation contains slides that are directly drawn from the JORC code (2012), it also contains a number of example Q&A s provided for illustrative and discussion purposes. These example are generic in nature and do not provide a replacement for full and considered evaluation of the specific public reporting requirements using all clauses of JORC ( 2012) and ASX listing rules by both the nominated Competent Person and reporting entity. ICMM International Council on Mining and Metals
Resource and Reserves guidelines, V1.0 "Moreover, a prudent owner, before buying shares, ought to go to the mine and carefully examine the nature of the vein, for it is very important that he should be on his guard lest fraudulent sellers of shares should deceive him" "Now a miner, before he begins to mine, must consider seven things, namely: the situation, the conditions, the water, the roads, the climate, the right of ownership and the neighbours" Georgius Agricola, De Re Metallica, 1556
Recap JORC 2012 key changes
JORC 2012 Code remains Principles based The JORC 2012 code review process confirmed strong support for the JORC Code to remain principles based, though much or the received comment emphasised the need improved disclosure standards and greater balance between the core principles of Transparency, Materiality and Competence in public reporting. Transparent disclosure was reinforced through redrafting of clauses 4, 18, 26 and 34 increased emphasis on Table 1 and specific comment if not why not context CP to confirm the materiality or otherwise of these criteria to the deposit in question.
JORC Code - Principles based The principles in Clause 4, 2012 JORC Code are: Enhanced through Table 1 commentary Transparency clear unambiguous presentation Enhanced focus on Competent Person s disclosure obligations Materiality all reasonable information expected JORC Public Reports Competence Based on work by Competent Person
Clause 4 Scope includes the principles The following slides contain extracts of key JORC (2012) clauses and guidance New text :- 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 an investor or their advisors would reasonably expect to see explicit comment on from the Competent Person. 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.
Clause 5 Scope includes the principles (2) 5. Table 1 criteria provide a useful checklist of criteria to be considered by the Competent Person in developing their documentation and in preparation of 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 ( = material project) 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 reported. Reporting on an if not why not basis is to ensure that it is clear to the investor whether items have been considered and deemed of low consequence or are as yet not addressed or resolved.
Clause 18 Exploration Results ( old clause 17) New text: Clear diagrams and maps designed to represent the geological context must be included in the report. These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. And, As required under clause 4, 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 criterion in Table 1 on an if not, why not basis 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.
Clause 19 Mineral Resources All reports of Mineral Resources must satisfy the requirement that there are reasonable prospects for eventual economic extraction (i.e. more likely than not), regardless of the classification of the resource. Portions of a deposit that do not have reasonable prospects for eventual economic extraction must not be included in a Mineral Resource. The basis for the reasonable prospects assumptions is always a material matter, and must be explicitly disclosed and discussed by the Competent Person(s) within the Public Report Where untested practices are applied in the determination of reasonable prospects then the use of the proposed practices for reporting of the Mineral Resource must be justified by the Competent Person in the Public Report.
Clause 19 Mineral Resources (2) Where a Mineral Resource is reported at an average grade or above a cut off grade (or at an equivalent average grade or above an equivalent cut off grade) that is not currently economic, the conditions under which it would be economic must be stated, and the Competent Person must provide justification for including these Mineral Resources at the time of making the Public Report. Geological evidence and knowledge required for the estimation of Mineral Resources must include sampling data of a type, and at spacings, appropriate to the geological, chemical, physical, and mineralogical complexity of the mineral occurrence, for all classifications of Inferred, Indicated and Measured Mineral Resources. A Mineral Resource cannot be estimated in the absence of sampling information. Also In all cases, the considered timeframe.. ( for eventual extraction)..should be disclosed and discussed by the Competent Person
Clauses 27, 35 Mineral Resources & Ore Reserves New Table 1 text in both clauses is identical: In a Public Report of a Mineral Resource ( Ore Reserve) 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 elicited under each of the criteria in 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.
Clause 27/ 35 (2) Materiality When Mineral Resources (Ore Reserves ) are first released 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 Clause 4 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 criteria in Table 1 on an if not, why not basis is particularly important. and The Technical summary based against Table 1 criteria should be made available as an appendix to the Public Report. 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 Mineral Resources ( Ore Reserves) should be disclosed.
Clauses 27/ 35 Comment on unresolved issues 27 Where there are as yet unresolved issues potentially impacting the reliability of, or confidence in, a statement of Mineral Resources; for example, poor sample recovery, poor repeatability of assay or laboratory results, limited information on bulk densities etc. this should be reported also. and 35 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. this should be reported also.
New Clause 17 Exploration Targets Old Clause 18 which dealt with companies ability to comment on and discuss its exploration in terms of target size and type. Any such information relating to exploration targets..., has been replaced by a completely redrafted clause 17 Shift of clause order is to make it clear that it is separated from the main stream reporting of Exploration Results and Mineral Resources. The clause now defines the term: 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. The new wording strengthens the requirement to disclose the detail of the supporting basis, work completed, work planned and the caution statement. Precludes use in a Headline statement Requires a formal Competent Person signoff
CRIRSCO standard definitions, studies & metal equivalents and in-situ values The CRIRSCO standard definitions, agreed by CRIRSCO and recommended for inclusion in all national reporting codes in order to provide uniformity for external reference, have been included in JORC 2012. a Pre-Feasibility Study is now required for the declaration of Ore Reserves as outlined in clause 29: Pre-Feasibility and Feasibility Studies are now defined in line with CRIRSCO definitions, and a Scoping Study is also defined. Clauses on metal equivalents and in-situ values have been extracted from ASX companies updates and inserted as clauses 50 and 51 in JORC. CRIRSCO: Committee for Mineral Reserves International Reporting Standards
Common Queries Received Post Transition
Table 1 release formats Do I have to use the JORC Table 1 template? Reformatting outside of the basic tabular format is not recommended as this makes it difficult for the investor to determine whether all points have been covered. Under if not why not a response to every listed table 1 criteria is required. Bullet point responses to individual criteria are acceptable; the table 1 is intended as a summary of key criteria, not a full text report Diagrams and tables may be inserted or appended to the table to improve the clarity of the disclosure.
What if the data I have isn't directly referred to in the Table 1 criteria Table 1 doesn t have specific criteria for key attributes of my project. How do I address this? The table 1 header includes the following. As always, relevance and Materiality are overriding principles that determine what information should be publicly reported and the Competent Person must provide sufficient comment on all matters that might materially affect a reader s understanding or interpretation of the results or estimates being reported. And It is the responsibility of the Competent Person to consider all the criteria listed below and any additional criteria that should apply to the study of a particular project or operation. The relative importance of the criteria will vary with the particular project and the legal and economic conditions pertaining at the time of determination. So, if it is a material aspect to the project add it in to the relevant section E.g. if the downhole geophysical data collection is a key attribute of your sampling, include special reference and description throughout the Section 1 elements The same would apply to additional responses the Resource Estimation section if the same data types are used in elements of the estimation
When should a Table 1 be generated? When should a Table 1 be generated by the competent person? Clause 5. The Table 1 should be generated as part of the competent persons documentation in all cases Generation of the relevant Table 1 sections within the internal Competent Persons reporting documentation format means that they should be available for publication promptly as required. Publication triggers may not always be obvious to the Competent Person, or can move forward quickly as the company situation or external market environment shifts, so being ready is good policy Many sections can be generated significantly ahead of the Resources and Reserves announcements eg description of sampling, drilling etc Continuous disclosure requirements do no negate the requirement to comply with the code
Triggers fro Table 1 release Why didn t BlueSky Minerals publish a Table 1 for each of its Resources and Reserves in its 2013 annual report? I am trying to do a company valuation and this information would be very useful for me. Clause 5 : Table 1 is required for new or materially changed Resources and Reserves for significant projects only Materiality triggers for significant projects has or could have a significant influence on market value, and /or has specific prominence in a public report ( appendix 1). Small changes to already stated Resources or Reserves would not require generation of a table 1 Depletion through mining of current Ore Reserves would not qualify as material ( it is an expected outcome) Changes to classifications, project stage, and material grade / tonnage changes would trigger the Table 1 requirement
Republishing previously released Table 1 content When reporting results of a follow on program, do you have to reproduce the entire Table 1 in your next announcement or can you just note anything that has changed and put it in the appropriate table 1 format with a note that nothing else has changed? You should republish the full relevant sections of table 1, though any sections without updated inputs would stay as they were previously and can be noted as such in the commentary. The code doesn t support partial publication of a Table 1 section all criteria must be covered with the if not why not commentary In rare circumstances, when prior sections have been recently published under JORC 2012 and remain current, direct referencing may be applicable However, the investor should not have to pull multiple updates the piece together the full picture ( transparency) and as pdf ink is free republication in a single location is recommended to ensure alignment of the disclosures.
Maiden Ore Reserves Release If we plan to release a maiden JORC 2012 Ore Reserve based on a JORC 2004 Resource, do we need to provide Table 1 sections 1-4 or just section 4? While the Resource component of the Ore Reserve may not have previously triggered a Table 1 prior to code transition, the release of an Ore Reserve requires a full update of the sections 1-3 criteria as well as section 4 in order that the transparency requirements of JORC 2012 can be met. Companies completing Pre-Feasibilty Studies and progressing toward maiden Ore Reserves releases should be aware of this and be progressing the generation of a full Table 1 release In rare circumstances, when prior sections have been recently published under JORC 2012 and remain current, direct referencing may be applicable However, the investor should not have to pull multiple updates the piece together the full picture ( transparency) and as pdf ink is free republication in a single location is recommended to ensure alignment of the disclosures
Ore Reserve updates at Operating mines Does an ore reserve update at an operating mine require a formal Pre- Feasibilty study? A Table 1 release will be required if the update is material but a full PFS may not be in a brownfields environment. Clause 29 of the JORC Code does not require a formal Pre- Feasibility or Feasibility Study, but rather information related to the Modifying Factors must be in studies at Pre-Feasibility or Feasibility level. Where a company 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. Any material change to an Ore Reserve will require generation and disclosure of a Table 1 based upon the LOM plan inputs
CP consent for republication In relation to clause 9 which states, This relaxation of the requirement to obtain the Competent Person s prior written consent does not apply to the requirements for annual reporting of Mineral Resources and Ore Reserves contained in Clause 15. Does this mean that a new Competent Persons consent form must be obtained each year for the annual reporting of Mineral Resources and Ore Reserves? Mineral Resources and Ore Reserves must be reported annually ( Clause 15) The annual report consent must be refreshed at his time. This is to ensure rolling over a previous annual report Mineral Resource or Ore Reserve does not occur without going back for CP consent on the basis that the company believes it hasn t changed This gives the CP the right to review on an annual basis. No CP would want their statement from 3 years ago still going out under their original signoff without expressly reviewing the position. Importantly however, if the provisions in clause 9 are misused, the Company, not the CP is held accountable by the ASX. The streamlining disclosure option within clause 9 was generated to reduce the need for new signoffs in the nearer term e.g. publishing Resource tables from press releases or the annual report in subsequent investor slide shows, not for rolling over annual results.
JORC ( 2012) extraterritorial BlueSky Minerals is not listed on the ASX but wishes to publish a JORC ( 2012) Resource statement. Can they do this and what are the requirements? The Resources or Reserves should be published complying to all aspects of the JORC ( 2012) code, with special attention to the Competent Person qualification and membership disclosures Table 1 triggers and disclosures requirements Competent Persons must be AusIMM / AIG or current RPO members to sign off on a JORC 2012 statement. AusIMM / AIG and JORC RPO s have extraterritorial reach for ethics complaints if required. Non complying or incomplete statements expose Competent Persons even if the corporate reporting requirements for the company are less rigorous in that listing jurisdiction.
Acknowledgements To our JORC colleagues and to the staff of ASX and ASIC for their cooperation in developing the revised JORC (2012) Code and updated ASX Listing Rules.