New draft of JORC Code released for public comment and review

THE BOURSE WHISPERER: The Australasian Joint Ore Reserves Committee (JORC) has released an exposure draft of a revised JORC Code (2012) for public comment.

The JORC Code (full title: Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves) is an essential facet of the reporting of exploration and Resource as it provides investors with confidence in the minerals industry in Australasia.

 “First developed as a world-leading piece of industry self-regulation in 1989, the Code is incorporated in the Listing Rules of the Australian Securities Exchange and the New Zealand Stock Exchange, making compliance mandatory for listing public companies in Australia and New Zealand,” JORC acting chair Steve Hunt said.

“The key role of the JORC Code is to ensure consistently high quality and transparent reporting of Exploration Results and reporting of estimates of Mineral Resources and Ore Reserves.

“The exposure draft represents a significant evolution of the JORC Code, and we strongly encourage people to review the draft and provide us comments.”

This draft of the JORC Code has been prepared following consultation on an issues paper that was prepared in 2011.

JORC received extensive feedback to the paper in the form of 114 written submissions as well as further direct industry feedback through various public forums and meetings, which it said had greatly assisted it in preparing the exposure draft.

The body said that the review process confirmed there is strong support for the JORC Code to remain principles based, however, there is also a need for improved disclosure standards and greater balance between the core principles of Transparency, Materiality and Competence in public reporting.

The exposure draft of The JORC Code (2012) can be found at www.jorc.org.

Comments are invited up to Friday 26th October 2012. Submissions should be emailed to jorc@ausimm.com.au.

“JORC also welcomes the parallel release of the ASX consultation paper ‘Reserves and Resources Disclosure Rules for Mining and Oil &Gas Companies: Draft ASX Listing Rules and Guidance Notes for Enhanced Disclosure’,” Hunt said.

“JORC has been working closely with the ASX and ASIC as we have developed these draft documents, and I am very pleased that we are able to consult on these related documents at the same time.”

There are a number of areas in which the exposure draft JORC Code (2012) and ASX listing rules are in close alignment in seeking to create a more transparent balanced reporting regime for Exploration Results, Mineral Resources and Ore Reserves.

JORC has urged both papers be reviewed concurrently in order to understand the accountabilities and requirements for both Competent Persons and mining companies under the new drafts.

JORC, ASX and ASIC have liaised and cooperated in an attempt to ensure the requirements are efficient and compatible.

JORC said it welcomes any comment on the compatibility of the two sets of requirements.

In addition there are a number of issues beyond the scope of the JORC Code covered only within the ASX consultation paper, specifically new guidance on the reporting of Production Targets and the public reporting of Historical and Foreign Estimates.

As these issues are not addressed within the JORC Code, the draft guidance for these issues should be reviewed and commented upon directly to the ASX.

What the JORC Code does:

Sets minimum standards for public reporting (in Australia & 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; and

Provides extensive guidelines on the criteria to be considered when preparing reports on Exploration Results, Mineral Resources and Ore Reserves.

What the JORC Code does not do:

Regulate the procedures used by Competent Persons to estimate and classify Mineral Resources and Ore Reserves;

Regulate companies’ internal classification or reporting systems;

Deal with breaches of the Code by:

Companies (these are regulated by the ASX); or

Individuals (these are dealt with under enforceable Codes of Ethics of the Australian Institute of Geologists (AIG), The Australasian Institute of Minerals and Metallurgy (The AusIMM) or the relevant Recognised Professional Organisation.