Question 1
Your company, ABC Mining, is listed on the ASX and intends to announce the results of the first drilling since an announcement two months earlier of a maiden Inferred Mineral Resource, reported in accordance with the JORC Code (2012). In this new drilling results announcement, you want to refer to the Mineral Resource , by restating tonnes and grades, as you think it is important for your investors to be reminded of the results from the resource estimation.
To stay compliant with both the ASX Listing Rules and the JORC Code (2012), explain what must be included in the new announcement when referring to the mineral estimation results from your previous announcement . Include any relevant comments on the Competent Person statement.
Delegate your assignment to our experts and they will do the rest.
When revised Ore Reserve and Mineral Resource statements are publicly reported, the Company must discuss any material changes from the previous estimate, and supply sufficient comment to enable the basis for significant changes to be understood by the reader. 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. Where untested practices are applied in the determination of reasonable prospects, the use of the proposed practices for reporting of the Mineral Resource must be justified by the Competent Person in 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.
Question 2
You are reporting a material upgrade to your previously publicly reported Mineral Resource. The last time the resource was upgraded was 13 months ago, and at the time all relevant information was provided and the resource reported in compliance with the ASX Listing Rules and in accordance with the JORC Code (2012). Which of the following situations applies to the disclosure of this update?
You are only required to state the new resource figures, and need only to refer to the previous announcement for all the underpinning technical details, as long as there is a Co mpetent Person statement included.
You are only required to state the new resource figures, as long as you include a clear explanation of the conditions that have led to the change of the Mineral Resource.
In compliance with ASX Listing Rule 5.8.1, you are only required to provide information on geology, sampling and subsampling, drilling techniques, sample analysis method, estimation methodology, cut-off grades, and mining and metallurgical methods and parameters.
You must include all relevant information, including all the information referred to in Table 1 of the JORC Code (2012), appropriate Competent Person statement, as well as address all the required information from ASX Listing Rules 5.8.1.
Question 3
ABC Mining operates a gold mine out of WA, Australia. It is a low-grade orebody with relatively high all-in costs. The Ore Reserves, last updated in the previous reporting year, have been determined at a gold price of USD1,200. In heavy trading, based on some recent world-wide events, the gold price dropped significantly overnight and is now climbing back upwards from a low of USD1,050. With the gold price at this level, ABC’s mine will operate at a loss. However, with the longer-term outlook for gold positive, ABC Management has made a deliberate decision to continue operate on a non-economic basis in the short term.
Given that ABC’s Ore Reserves now can no longer be extracted at a profit, should ABC’s Ore Reserves be re-evaluated and classified as Mineral Resources as a result of this commodity price fluctuation?
No, It is not intended that re-classification from Ore Reserves to Mineral Resources or vice versa should be applied as a result of changes expected to be of a short term or temporary nature, or where company management has made a deliberate decision to operate on a non-economic basis. Examples of such situations might be commodity price fluctuations expected to be of short duration, mine emergency of a non-permanent nature, transport strike, etc.
Question 4
The JORC Code (2012) states that it is not a Code that regulates the manner in which a Competent Person estimates Mineral Resources. Therefore, how a Competent Person extrapolates a Mineral Resource estimate beyond the nominal sample spacing is for them to decide. However, what must the Competent Person specifically address in the Public Report on this subject matter?
The Competent Person 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.
Question 5
ABC Mining has recently completed a Mineral Resource estimate for its flagship gold project in Western Australia. The resource was estimated by a suitably qualified Competent Person and classified as an Inferred Resource in accordance with the JORC Code (2012). ABC has previously reported the Exploration Results on which the Mineral Resource estimate is based to the market in accordance with the JORC Code (2012).
Is ABC required to attach a Table 1 to the Public Report announcing the Mineral Resource? If no, why not? If yes, which sections and how?
No, because Mineral Resource estimate is based to the market in accordance with the JORC Code (2012).
Question 6
As an AusIMM Member, you notice a Mineral Resource was announced to the ASX, with the Resource summarised in the following table:
Explain which clause(s) in the JORC Code (2012) are not being adhered to. Explain whether you should make a complaint to the AusIMM’s Complaints Committee.
In this case Clause 17 is not being adhered to. Public Reports of Exploration Results should have adequate information to enable a considered and balanced judgement of their significance. Yes, I should make a complaint to the AusIMM’s Complaints Committee because the announcement does not comply with JORC Code (2012).
Question 7
ABC Mining is listed on the AIM in London and has just completed a Mineral Resource estimate, which was completed, and documentation prepared, by a Member of the AusIMM. It has opted to use the JORC Code (2012) as the reporting ‘Standard’, as per the AIM-Notice-16 16 March 2006 Guidelines for Mining and Oil & Gas Companies. What are ABC’s and the Member’s reporting and public disclosure obligations under the JORC Code (2012) and the AIM? Are Competent Person’s conditions/statements and Table 1 required when ABC reports its resource estimation results to the AIM? Provide rationale.
The reporting should be done by a Competent Person and 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. Yes, Competent Person’s conditions/statements and Table 1 are required when ABC reports its resource estimation results to the AIM because it must comply with JORC Code (2012) since it is its standard reporting technique.
Question 8
Discuss the difference between ‘documentation’ and ‘Public Report’. Can documentation be prepared by a junior person who may not necessarily qualify as a Competent Person under the JORC Code (2012)? Are there any other specific requirements for the construction of the documentation?
Documentation details the Exploration Results, Mineral Resource and Ore Reserve estimates, on which a Public Report on Exploration Results, Mineral Resources and Ore Reserves. On the other hand, Public Reports are reports prepared for the purpose of informing investors or potential investors and their advisers on Exploration Results, Mineral Resources or Ore Reserves. Documentation can only be prepared by a Competent Person under the JORC Code (2012). Yes, there are other specific requirements for the creation of the documentation. Documentation is based, must be prepared by, or under the direction of, and signed by, a Competent Person. 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.
Question 9
The JORC Committee does not police whether people report in accordance with the JORC Code (2012). The AusIMM and AIG Complaints Committees, staffed by volunteers, only respond to complaints if these are lodged by members of the community and also do not actively monitor reporting adherence. Under the ASX listing rules, a Public Report must be prepared in accordance with the JORC Code if it includes a statement on Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves. The ASX performs a limited monitoring task, specifically focusing on certain compliance components. Each week, several reports are being issued that have varying levels of non-adherence with the listing rules and the JORC Code.
Discuss the benefits and the drawbacks of the current monitoring process of public reporting adherence. Try to provide arguments both for and against more regulation.
For instance, consider:
What is the responsibility of the company (acting through its Board of Directors) and what is the responsibility of the Competent Person?
Does the current structure prevent the market from being misinformed in a timely fashion?
Does the current structure spend too much time on minor administrative errors?
What are the penalties for non-adherence? Are they too strict or not strict enough?
Points will be awarded based on a participant’s ability to reason across the JORC Code and draw on relevant examples or sections in the Code.
The benefit of this is monitoring is that it is not the work of the JORC Committee nor The AusIMM and AIG Complaints Committees to follow up on whether a company is compliant with the JORC Code (2012). Companies reporting Exploration Targets, Exploration Results, Mineral Resources or Ore Reserves are reminded that while a public report is the responsibility of the company acting through its Board of Directors, Clause 9 requires that any such report ‘must be based on, and fairly reflect the information and supporting documentation prepared by a Competent Person or Persons’. Clause 9 also requires that the ‘report shall be issued with the prior written consent of the Competent Person or Persons as to the form and context in which it appears’ . Besides, the current structure prevents the market from being misinformed in a timely fashion. However, the drawback of this kind of monitoring is that some companies will go unnoticed due to their failure to comply with JORC Code (2012). The agencies should create and ensure implementation of the Code through close monitoring. The penalties of non-adherence are also not strict and the current structure spends too much time on minor administrative errors.
Question 10
True or false: A Mineral Resource is an inventory of all mineralisation drilled or sampled, regardless of cut-off grade, likely mining dimensions, location or continuity. Provide support for your answer.
True. The term ‘Mineral Resource’ covers mineralisation, including dumps and tailings, which has been identified and estimated through exploration and sampling and within which Ore Reserves may be defined by the consideration and application of the Modifying Factors.
Question 11
What material matter must always be discussed in a Public Report when a Mineral Resource is reported in accordance with the JORC Code (2012)? What supporting information is required to be included in this discussion? In what clause is this also required in the ASX Listing Rules?
The basis for the reasonable prospects assumption is always a material matter, and must be explicitly disclosed and discussed by the Competent Person within the Public Report using the criteria listed in Table 1 for guidance. The reasonable prospects disclosure must also include a discussion of the technical and economic support for the cut-off assumptions applied. The clauses which are also required in the ASAX Listing Rules are Clauses 6 and 42.
Question 12
Can Mineral Resource estimates include material below the selected cut-off grade? If yes, then explain how. If no, then explain why not. Include the relevant clause(s) in your answer.
Yes, Mineral Resource estimates can include material below the selected cut-off. Where considered appropriate by the Competent Person, Mineral Resource estimates may include material below the selected cut-off grade to ensure that the Mineral Resources comprise bodies of mineralisation of adequate size and continuity to properly consider the most appropriate approach to mining.
Question 13
Your Company, ABC Mining, is listed on the ASX and has a relatively early-stage base metal project in Zambia. Recent drilling reported 15m at an average grade of 0.12% Zn, 0.35% Pb, and 0.12% Cu. Apart from listing all the results as they appear, you also intend to include a reference in the public announcement to the gold-equivalent (e.g. ‘AuEq’) grade of these results. Your reasoning is that most investors are more familiar with gold intercepts and this helps put the tenor of the intercept in better perspective.
Is it appropriate to report the intercept as AuEq? If no, explain why. If yes, explain what you need to address and include in your announcement to make sure that the reporting of metal equivalents is compliant with the JORC Code (2012) .
No, it is not appropriate to report the intercept as AuEq. Mineral Resources must not be reported in terms of contained metal or mineral content unless corresponding tonnages and grades are also presented. Public Reporting of tonnages and grades outside the categories covered by the Code is not permitted unless the situation is covered by Clause 17, and then only in strict accordance with the requirements of that Clause. Estimates of tonnage and grade outside of the categories covered by the Code may be useful for a company in its internal calculations and evaluation processes, but their inclusion in Public Reports is not permitted.
Question 14
When should a Competent Person statement name a Competent Person who is independent from the reporting company?
The consenting Competent Person should always be independent from the Company
When the company discloses a Production Target based solely on Inferred Resources
When Mineral Resources or Ore Reserves are reported for the first time
For any material change or new information released to the market
Question 15
In situations where both Mineral Resources and Ore Reserves are reported, what statement must be included in the Report? Suggest two possible appropriate forms of clarifying statements.
When revised Ore Reserve and Mineral Resource statements are publicly reported, the Company must discuss any material changes from the previous estimate, and supply sufficient comment to enable the basis for significant changes to be understood by the reader. In some situations there are reasons for reporting Mineral Resources inclusive of Ore Reserves and in other situations for reporting Mineral Resources additional to Ore Reserves. It must be made clear which form of reporting has been adopted. Appropriate forms of clarifying statements may be:
The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources modified to produce the Ore Reserves.’ or
The Measured and Indicated Mineral Resources are additional to the Ore Reserves.’
Question 16
Given the required level of knowledge of geological and grade continuity of Measured Mineral Resources, can the style of mineralisation preclude a deposit from being classified as Measured, given practical constraints on the cost of exploration for some deposits? Provide an example in your answer. Does this have any bearing on Technical Studies on such deposits?
Yes, the style of mineralization can preclude a deposit from being classified as Measured because the Competent Person should take into consideration issues of the style of mineralisation and cut-off grade when assessing geological and grade continuity for the purposes of classifying the resource. Yes, this has bearing on Technical Studies on such deposits to provide clarity on what is expected when reporting and classifying a deposit.
Question 17
You are reporting a summary of your recent drilling results in your public announcement to the ASX. The table has the following format:
What must you include in the body of the report to support that summary?
Nothing, all information can be included in the JORC Code Table 1, that I will attach to this announcement
A statement on widths of the intersections, e.g. whether they are true widths or down-the-hole widths
A statement on what top-cuts were used, if any to calculate the average grades
A statement on all methods that apply to the data aggregation applied to the summary table, including: lower cut-off grade, internal dilution, any top-cap grades and a statement on widths.
Question 18
ABC Mining’s core drilling programme has just kicked off and ABC’s geologist Roc Butlering has posted a photo to his LinkedIn account of visible mineralisation in the first hole’s drill core with the caption “VG in first hole!!!!”
No further commentary is provided in the post. ABC Mining is an ASX-listed company. Discuss any JORC Code (2012) adherence and/or ASX Listing Rule compliance issues and what Roc should be aware of when making posts on social media.
Roc must be aware of the compliance issue which is subject to rule 5.10, which requires that a public report which an entity prepares must be according to rules 5.7 to 5.24 and Appendix 5A when the report comprises a statement which relates to exploration targets, exploration results, mineral resources or ore reserves and production targets. In this case, the company is reporting exploration results in social media.
Question 19
You have been asked by your client, the managing director of ABC Mining, a listed company on the ASX, to undertake a Mineral Resource estimate for a pegmatite-hosted lithium deposit in WA, Australia, and provide your consent as a Competent Person in a Public Announcement of the Mineral Resource estimate. The pegmatites proliferate as dyke swarms intruding granites and the mineralisation is generally fairly ‘nuggety’.
You are a mineral resource professional with 19 years’ experience in estimating Mineral Resources for a variety of predominantly metalliferous hard-rock deposit types, including many vein-hosted gold deposits. You have worked on three exploration programmes for pegmatite-hosted lithium deposits on-and-off for a total of about two years throughout your career. You have sufficient experience in the sampling and analytical techniques relevant to the lithium deposit to be aware of problems that could affect the reliability of data and you have some appreciation of extraction and processing techniques.
Can you act as the Competent Person for the activity of Mineral Resource estimation for this deposit? Please reason your answer.
No, I cannot act as the Competent Person in this case because 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. Also, 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. I am neither a member of the abovementioned bodies, nor do I have a minimum of five years relevant experience in the type of deposit under consideration.
Question 20
ASX-listed ABC Mining has been operating the open cut Almeda Winterises Cu-Au mine in the Philippines for several years. Its current practice is to stockpile low-grade material and process this towards the end of the mine life.
Should ABC include such low-grade material in its Mineral Resources and/or Ore Reserves? If yes, then explain how. If no, then explain why not.
Yes, ABC should include such low-grade material in its Mineral Resources or Ore Reserves. This is in accordance with Code 41 which applies to the reporting of all potentially economic mineralised material. This can include mineralised fill, remnants, pillars, low grade mineralisation, stockpiles, dumps and tailings (remnant materials) where there are reasonable prospects for eventual economic extraction in the case of Mineral Resources, and where extraction is reasonably justifiable in the case of Ore Reserves. Any mineralised material as described in this Clause can be considered to be similar to in situ mineralisation for the purposes of reporting Mineral Resources and Ore Reserves. Judgements about the mineability of such mineralised material should be made by professionals with relevant experience.
Question 21
What is the key difference between Inferred, Indicated and Measured Mineral Resources, with regards to geological and grade continuity? How are cut-off grades relevant to this discussion in a Public Report? What additional phrase would be good practice to include in your Public Report to further distinguish a Measured Resource from an Indicated Mineral Resource?
The main difference between Inferred, indicated and Measured Mineral Resources is that a Measured Mineral Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. Mineralisation may be classified as a Measured Mineral Resource when the nature, quality, amount and distribution of data are such as to leave no reasonable doubt, in the opinion of the Competent Person determining the Mineral Resource, that the tonnage and grade of the mineralisation can be estimated to within close limits, and that any variation from the estimate would be unlikely to significantly affect potential economic viability. This category requires a high level of confidence in, and understanding of, the geological properties and controls of the mineral deposit. An additional phrase to include in the Public report to further distinguish a Measured Resource from an Indicated Mineral Resource would be “sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.”
Question 22
Can ABC Mining publicly announce an Exploration Target without having any Exploration Results to base it on? Include your reasoning and the relevant clause(s) in your answer.
No, ABC Mining cannot publicly announce an Exploration Target without having any Exploration Results to Base it on. 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. Any such information relating to an Exploration Target must be expressed so that it cannot be misrepresented or misconstrued as an estimate of a Mineral Resource or Ore Reserve. This is set out in Clauses 17 and 18 for requirements which should be met for public reporting of exploration results.
Question 23
ABC Mining is an ASX-listed company. ABC’s director , Mrs Polly Peterson, is preparing an announcement with a material update of Exploration Results for ABC’s Algerdosh project, a
significant project in New Zealand. Mrs Peterson is a member of the AusIMM. Mrs Peterson is ABC’s Competent Person for exploration work at the Algerdosh project (she has the required experience in exploration, the style of mineralisation and the type of deposit).
Write the Competent Person statement.
The information in this report that relates to a material update of Exploration Results for ABC’s Algerdosh project is based on data compiled by Mrs Peterson.
Question 24
You have completed a large review of historic data for a project that ABC Mining has recently acquired in Ghana. The project consists of several tens of thousands underground drill holes, channel chip samples, surface drilling (RC, RAB and diamond) and various other exploration data sets (geophysics, geology, soil geochemistry, etc). The results of all these exploration data were never before announced to the ASX. Reporting of selected information such as isolated assays or isolated drill holes, without placing them in perspective is unacceptable as stated by the JORC Code (2012); however, reporting of more than 250 pages of tables of drilling and other exploration data is unpractical. Discuss how you would disclose the nature of those Exploration Results in accordance with the JORC Code (2012).
In disclosing the nature of the Exploration Results, I will provide a summary of the relevant exploration data available and the nature of the results, including a disclosure of the current drill hole or sampling spacing and relevant plans or sections. In any subsequent upgraded or modified statements on the Exploration Target, I would discuss any material changes to potential scale or quality arising from completed exploration activities.
Question 25
Discuss how and where the principle of “continuous disclosure” is incorporated or expressed in the JORC Code (2012) and the ASX Listing Rules. Provide clause numbers and Listing Rules for reference.
The ASX actively monitors and regulates continuous disclosure.
ASX Listing Rules Chapter 3
ASX Guidance Note 8
The JORC core refers to keeping the market updated of material changes that may materially influence the economic value … of the company.
JORC Clause 14 – A company must promptly report any material change.
Question 26
Are there prescribed standards in the JORC Code (2012) for exploration such as spacing or depth of drill holes? Explain your answer.
Yes, there are prescribed standards in the JORC Code (2012) for exploration like spacing or depth of drill holes. There is a criteria for drill hole information which includes down hole length and interception depth.
Question 27
As MD and Competent Person for junior explorer ABC Mining, you are reporting new exploration results from your gold drilling project. The results do not show any noteworthy economic intersections and all interceptions are below or near analytical detection limits. Do you need to include a fully-filled-out JORC Code Table 1, Section 1 & 2, as an appendix to the public announcement?
No, the project is not a ‘significant project’ as defined in Appendix 1 in the Code; the results are not noteworthy and are therefore not considered to be “material” and hence no Table 1 is required
No, y ou don’t need to attach Table 1 as an appendix, as it is just a check list, but you do need to consider and address all the required criteria listed in it in the Public Report, as the reported results are considered to be Exploration Results
Yes, the project is a ‘significant project’ as defined in Appendix 1 in the Code, and for any results that classify as Exploration Results, you always need to attach a fully-filled-out Table 1, Sections 1 & 2, as an appendix to the Public Report, regardless of the nature of the Exploration Results.
Yes, attaching a full-filled-out Table 1, Sections 1 & 2 is mandatory since the adoption of the JORC Code (2012 version), but since you don’t expect the results to move the share price, you can state “not applicable” where, as the Competent Person, you deem so to be relevant.
Question 28
ASX-listed ABC Mining has an alluvial gold project in QLD, Australia, and has just completed a maiden Mineral Resource estimate. It reports this to the market, expressing the Mineral Resource in grade per volume, rather than the more conventional ‘grade per tonnes’. Is this compliant with the JORC Code (2012)? Include any relevant clauses in your answer.
No, it is not compliant with the JORC Code (2012). Reporting of tonnage and grade figures should reflect the relative uncertainty of the estimate by rounding off to appropriately significant figures. Public Reporting of tonnages and grades outside the categories covered by the Code is not permitted unless the situation is covered by Clause 17, and then only in strict accordance with the requirements of that Clause.
Question 29
Assess whether the following headline statement for an ASX Public Report would be compliant with the JORC Code (2012):
“ Tin/Tantalum Mining Inventories estimated which show good potential for extended mine life ”
Include relevant clauses in your answer.
No, it does not comply with the JORC Code (2012) as it is not an example of examples of Exploration Results according to Clause 17 whereby examples of Exploration Results are such as results of outcrop sampling, assays of drill hole intersections, geochemical results and geophysical survey results.
Question 30
As the consultant to ABC Mining, an ASX-listed company, you are editing the first draft of an announcement written by ABC’s managing director. Throughout the draft document, there are various instances of the following:
“ The Company is delighted to announce a further increase in ABC’s JORC-compliant Global MRE to 3.67Moz Au, from 3.26Moz Au “
“ The Ore Reserve calculation is based on JORC-compliant Mineral Resource estimates ”
“ A summary table of JORC-Compliant Mineral Resource Estimate is provided below ”
“ The Project includes three pit areas comprising 55.8Mt of JORC-compliant Au resource ”
What edits would you provide to this and why? What constructive guidance would you give to the managing director in order to improve their future announcements and understanding of them?
The edits I would provide are the removal of “JORC-compliant” because it is the targets or results which should indicate whether what is in the document is in compliance, not by just writing it in the report. Let the report speak for itself. I would advise the managing director to avoid using this statement “ JORC-compliant” but rather just comply with it throughout the reporting.
References
file:///C:/Users/User/Downloads/ASX%20FAQs.pdf
file:///C:/Users/User/Downloads/ASX%20Listing%20Rules%20Chapter%205.pdf
file:///C:/Users/User/Downloads/JORC_code_2012.pdf
