What makes mining specialized industry?

Mining industry indicates the cluster of process that are involved with extraction, management, and
processing of naturally occurring solid minerals from the earth surface. As a product of mining, various
economically valuable products might be obtained, that is, coal, diamond, metallic ores, oil, and so on.

PFRS 6 EXPLORATION FOR AND EVALUATION OF MINERAL RESOURCES

Exploration And Evaluation Expenditures

 Exploration for and evaluation of mineral resources is the search for mineral resources, including
minerals, oil, natural gas and similar non-regenerative resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility
and commercial viability of extracting the mineral resource.
 Exploration and evaluation expenditures are expenditures incurred by an entity in connection
with the exploration for and evaluation of mineral resources before the technical feasibility and
commercial viability of extracting a mineral resource are demonstrable.

Accounting for exploration and evaluation expenditures

 PFRS 6 permits entities to develop their own accounting policy for exploration and evaluation
assets which results in relevant and reliable information based entirely on management’s
judgment and without the need to consider the hierarchy of standards in PAS 8.
 This means that the entity may recognize exploration and evaluation expenditures either as
expense or asset depending on the entity’s own accounting policy.

MEASUREMENT AT RECOGNITION

 If the entity opts to capitalize exploration and evaluation expenditures as assets, it shall measure
them at COST.
 Subsequent to recognition, the exploration and evaluation assets shall be measured using the
cost model or the revaluation model.

Philippine Mining Act of 1995 (Republic Act No. 7942)

The Act governs all mining operations and related rights in the Philippines, specifically exploration,
development, and utilisation of natural resources conservation through a partnership of the government
and private sector. To this end, it provides for a permit system, which grants three kinds of resource
mining rights:

(1) exploration permit;

(2) mineral production and sharing agreement; and

(3) financial or technical assistance agreement.