The implications of the new JORC Code (2012) with regard to disclosure
Phil Newall, Managing Director, Wardell Armstrong International
JORC Code (1989-2012)
 What is the JORC Code?
•
Australian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves
 Where it all began for JORC?
•
“Poseidon Boom in 1969 and 1970”
 First JORC Committee
•
Established in 1971 by AMIC;
 The Editions of JORC Code
•
First Edition in 1989, revised and updated in 1992,
1996, 2004 and now 2012
 JORC Code, 2012 Edition supersedes all
previous editions.
JORC Code 2012
 What does the JORC Code 2012 set out?
•
•
•
Minimum standards
Recommendations
Guidelines for Public Reporting
 What is the JORC Code?
•
•
The Code is not a Code that regulates the
methods used by Competent Person in Mineral
Resource estimates;
The term JORC compliant refers to the manner
of reporting not to the actual estimates
 The Code is applicable to all solid
minerals, including diamonds, other
gemstones, industrial minerals and coal.
Public Reporting (Clause 6)
 The Code is a required minimum
standard for Public Reporting
 The aim of Public Reports is to inform:
•
•
Investors
Potential Investors and Investors Advisers on
Exploration Results, Mineral Resources and/or
Ore Reserves
 Public Reports, including those for:
•
•
•
ASX;
NZX;
Or other Regulatory Authorities including
TSX, HKEX etc
Effective and Mandatory Date!
 Latest version effective
20 December 2012
 Mandatory from
01 December 2013
Main Principles of the JORC Code
Competence
Major Changes From 2004
 Table 1 and “If not, Why not” Reporting (Clauses
2, 5, 19, 27, 35)
 Exploration Targets (Revised Clause 17)
 Competent Person Attributions (Clause 9)
 At Least a Prefeasibility Study Level for an Ore
Reserve Declaration (Clause 29)
 Definition of Technical Studies (Clauses 37, 38,39
and 40)
 Metal Equivalents (Clause 50)
 In-situ or in ground values (Clause 51)
Table 1 and “If not, Why not”
Reporting
 Enhanced disclosure of material information by
the Competent Person(CP) in line with
information required by Table 1 (Clause 5 in
2012 Edition, no clause in 2004 Edition);
 Public Reporting should include detailed
reporting of the relevant criteria from Table 1 of
the Code, either for the first time or a material
change since the last report;
 “If not, Why not” reporting (If CP has no
comment about a relevant criterion, it should be
explained in the report)
 The Technical Summary based against Table 1
criteria should be presented as an appendix to
the Public Report.
Table 1 Example
Platina Resources Ltd, Updated Resource Estimate for the Skaergaard PGM-Au-Fe-Ti Deposit completed by WAI, Eastern Greenland in July 2013
.
Exploration Target
 Clause 17 of the 2012 Code (amended Clause
18 of the 2004 Code) explains how
Exploration Targets should be reported in
Public Reports:
•
Exploration target must be quoted as a range of
tonnes and a range of grade (or quality) with a
detailed explanation of the level of exploration
activity already completed;
•
Must include a clarification statement, stating
conceptual in nature and no guarantee of
conversion to Mineral Resource; and
•
The terms Resource and Reserve must NOT be
used.
Exploration Target Example
A1 Consolidated Gold limited ASX Release-11th February 2013
Competent Person
 A Competent person (CP) is a minerals
industry professional
 CP is Member or Fellow of AIMM, AIG or
RPO (differs from 2004 when it was a ROPO)
 CP must have a minimum 5 years “relevant”
experience in the type of deposits or style of
mineralisation, and in the activity which
that person is undertaking
 One CP may sign off the whole report (ie,
taking full responsibility), or individual CP’s
will be responsible for their sections.
CP Role in Public Reporting
 A Public Report is the responsibility of the
Company. With regard to CP requirements,
the Company must:
•
•
Disclose any relationship of the CP with the
Company in the Public Report
Where a company re-issues information
previously issued, state the details of the
original report and CP’s, with the consent of the
CP.
 The 2012 Code provides:
•
•
Appendix 2, Competent Person’s Consent Form
Appendix 3, Compliance Statements
Appendix 2 Competent Person’s
Consent Form- Example
Appendix 3 Compliance Statement
Form - Example
A1 Consolidated Gold Limited
ASX Release – 11th February 2013
Competent Persons Statement
The information in this Report that relates to in-situ Mineral
Resources is based on information compiled by David
Williams of CSA Global Pty Ltd. David Williams takes overall
responsibility for the Report. He is a Member of the
Australasian Institute of Mining and Metallurgy and has
sufficient experience, which is relevant to the style of
mineralisation and type of deposit under consideration, and
to the activity he is undertaking, to qualify as a Competent
Person in terms of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’
(JORC Code 2012 Edition). David Williams consents to the
inclusion in the report of the matters based on his
information in the form and context in which it appears.
(http://www.a1consolidated.com.au/images/uploads/A1S_11_05_R
esource_Announcement_110213_Final.pdf)
Reporting Terminology & Modifying
Factors
 Public reports dealing with Exploration
Results, Mineral Resources or Ore
Reserves must only use the terms set out
here:
 Modifying Factors are considerations
used to convert Mineral Resources to Ore
Reserves and include:
•
•
•
•
•
•
•
•
•
Mining
Processing
Metallurgical
Infrastructure
Economic
Marketing
Legal
Environmental
Social and governmental factors
Minimum Pre-Feasibility Study Level
for an Ore Reserve Declaration (1)
 One of the major changes and a new
requirement in 2012 Edition (Clause 29),
which brings the Code into line with the
other international reporting codes and
standards.
 Clause 29 states that at least a PreFeasibility level Study should have been
completed to estimate an Ore Reserve;
 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.
Minimum Prefeasibility Study Level
for an Ore Reserve Declaration (2)
 Deriving an Ore Reserve without a mine
design or mine plan through a process of
factoring of the Mineral Resource is
unacceptable;
 In reporting of a new or materially changed
Ore Reserve, the key underlying assumptions
and outcomes of the Pre-Feasibility or
Feasibility Study must be disclosed; and
 There must be reasonable grounds to expect
that all necessary approvals (including
Government) or sales contracts will be
resolved within the anticipated time frame
required by the mine plans.
Minimum Pre-Feasibility Study Level
for an Ore Reserve Declaration (3)
 In order to allow mining companies time to
prepare, the clause (Clause 29) stipulating
the need for a Pre- or Feasibility Study in
order to define Ore Reserves does not come
into effect until 1 December 2014.
 Companies in production that have a “Life of
Mine” plan should have sufficient accurate
data to be able to circumvent the need for
such studies, but this will be up to the CP to
decide.
Technical Studies
There is no equivalent to Clause 37-40 in
the 2004 Edition.
In new edition, a new section has been
added to define and describe:
•
•
•
A Scoping Study
Pre-Feasibility Study
Feasibility Study
The aim of these Clauses is to provide
clarity on what is expected when
reporting using these terms.
Scoping Study







An order of magnitude technical and economical
study of the potential viability of Mineral Resources;
Includes appropriate assessments of realistically
assumed Modifying Factors and any other relevant
operational factors;
A basis for a Pre-Feasibility Study;
The first economic evaluation of a project commonly
and is based on low-level technical and economic
assessments (+/- 35% accuracy or more);
A Scoping Study must not be used as the basis for
estimation of Ore Reserves;
If the outcome of this study is supported by Inferred
Mineral Resources and/or Exploration Target, the
Public Report must state both the proportion and
sequencing of these, and
Must include a cautionary statement.
Preliminary Feasibility Study
 Comprehensive study considering a range of
options for the technical and economic viability of
the project;
 Identifies a preferred mining method, an effective
mineral processing method, infrastructure
requirements and capacities (but is NOT final);
 Detailed assessments of environmental and socioeconomic impacts and requirements;
 Includes a financial analysis based on Modifying
and other relevant factors to determine what
proportion of Mineral Resources will be converted
to Ore Reserves (no Inferred in Mine Plan);
 A lower confidence level than a Feasibility Study
(+/- 25% accuracy); and
 Highlights areas that require further study for the
final stage assessment.
Feasibility Study
 Comprehensive technical and economic study of the
selected development option of the project;
 Contains mining, infrastructure and process designs;
 Includes a detailed assessment of applicable
Modifying Factors, operational factors (as outlined in
Table 1) and detailed financial analysis to
demonstrate that extraction is economically viable;
 Expect that all necessary approvals (social,
environmental and governmental) will be in place or
executed within the anticipated time frame;
 Basis for a final decision on investment or to support
project financing;
 A higher confidence level than a Pre-Feasibility
Study; and
 “Bankable Feasibility” and “Definitive Feasibility
Study” are equivalent to a Feasibility Study.
Metal Equivalents
There is no equivalent Clause 50 in the 2004 Edition of
the Code
An extremely important new requirements for Public
Reporting of Exploration Results, Mineral Resources or
Ore Reserves in terms of “metal equivalent”
Must show details of all material factors:
•
•
•
•
•
Individual grades for all metals
Assumed commodity prices for all metals
Assumed metallurgical recoveries for all metals and their
source (metallurgical testwork, detailed mineralogy, similar
deposits, etc)
A clear statement on potential of the recovery and sales of all
the elements included in the metal equivalents calculation
The calculation formula used
Metal Equivalents Example
Platina Resources Ltd, Updated Resource Estimate for the Skaergaard PGMAu-Fe-Ti Deposit completed by WAI, Eastern Greenland in July 2013.
In Situ, or In Ground Valuations
No equivalent Clause 51 in the 2004 Edition of
the Code
Clause 51 introduces a new prohibition on the
publication of “in situ” or “in ground” financial
valuations in a Public Report
Publication of these valuations are contrary to
the intent of Clause 4 and 28; hence the terms
are not transparent and lack material
information
To determine the project viability, it is
necessary to include all reasonable Modifying
Factors (Clauses 29-36)
What are the other Codes?
LSE and AIM Rules for Companies; PERC,
CIM, SAMREC, JORC, SME, Russian code
NI 43-101 and TSX and
TSX-Venture Exchange
policies; CIM, JORC,
PERC, IG-7, SAMREC
United States
SEC Industry
Guide 7, (SME)
Certification Code for
Exploration Prospects, Mineral
Resources and Ore Reserves
(IIMCH)
Hong Kong
Exchange Rules
JSE Listing
Rules: SAMREC
JORC and ASX
Industry
Updates
NI 43-101 and JORC (2012:
Similarities
 Both require the involvement of a QP or CP
(in Chile, Qualified Competent Person) and
recognise foreign professional associations
 Definition of mineral resources and ore
reserves are the same
 Preliminary Economic Assessment
analogous to Scoping Study
 Definitions of Pre-Feasibility and Feasibility
Study are the same
 Pre-Feasibility minimum standard for ore
reserves
NI 43-101 and JORC (2012):
Differences
 NI 43-101 is a securities law (driven by
lawyers) whereas JORC is a policy guideline
(prepared by industry professionals)
 NI 43-101 applies to all oral and written
disclosure of material information and is
highly prescriptive, whereas JORC applies to
written disclosure of exploration results and
mineral resources and reserves and
ultimately relies on the CP
 Technical reports:
•
•
NI 43-101 – many triggers and reports filed on
SEDAR
JORC – technical reports not readily available –
some commercially sensitive information can
be omitted
Summary
 More responsibility and accountability to the
Competent Person;
 Sets out reporting pathway from Scoping
through Pre-Feasibility to Feasibility Study;
 Exploration targets can only be defined
through a range of tonnages and grades;
 QA/QC data vital to advance a project;
 Minimum Pre-Feasibility Study required for
Ore Reserve reporting;
 Tighter controls on reporting Metal
Equivalents and no In-situ valuations, and
 Brings JORC into line with other international
codes through Transparency, Competence &
Materiality
pnewall@wardell-armstrong.com
www.wardell-armstrong.com