WEEK 3B JORC CODE

3B.1 Introduction to JORC Code

Project development is not only concerned with technical and economic matters but also with the legal framework in which it takes place. The legal framework only comes into play when the feasibility study is made public but since the aim of the feasibility study is to achieve an operating mine, a very public activity, the impact of the legal framework has to be considered throughout. An aspect of the legal framework which impacts on a critical component of the process is the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, popularly known as the JORC code. The JORC code has been progressively developed over the past 20 years, culminating in the latest version issued in December, 2004. It is unlikely that there will be major changes to the code in the near future though it is constantly under review and discussions are continuing to develop an International code, generally similar to the JORC Code. The Joint Ore Reserve Committee recognised that it is not possible to provide strict definitions of the terms in the code because of the wide variety of resource and reserve estimation situations. Strict definitions could only apply to some of those situations or the code would have to contain definitions to suit every possible situation. The latest version of the code consists of a set of guidelines defined in general terms only. The code requires any report on mineralisation under the code to be prepared by a Competent Person. This implies that broad experience and detailed knowledge of the particular circumstances are necessary for effective implementation of the code. In effect, the responsibility for acceptable reporting has been delegated to Competent Persons. Further elaboration of what constitutes a Competent Person and possibly mechanisms for individuals to achieve accreditation as Competent Persons are likely in future versions of the code. The role of the Competent Person is crucial. That person must have detailed knowledge of the particular deposit, either from their own work or from skilled appraisal of the work of others, must have the broad experience to comply with the broader requirements of the code; and must have the integrity to produce an honest report irrespective of self interest and external pressure. The code states that the progression from inferred through indicated to measured resource status reflects an increasing level of geological data, knowledge and confidence There is a great deal of scope for subjective judgement on the part of the Competent Person in allocating mineralisation to the various resource categories. Confidence in the geological interpretation of the data may be largely subjective. Geological interpretations are rarely absolutely convincing with no possibility of alternative interpretations. The same is true for conversion of resources to reserves. The actual calculation of tonnes and

MEA Resource Estimation

grade of reserves is a relatively straightforward manipulation of quantitative data. However, many of the inputs are judgemental. The conversion of resources to reserves requires consideration of economic, mining, metallurgical, marketing, legal, environmental, social and governmental factors. The mining and metallurgical aspects are largely quantifiable on the basis of past experience and test work but most of the others require forecasts of unpredictable future outcomes. Nobody can guarantee the accuracy of a forecast metal price, for instance. What are required are predictions which would be accepted as reasonable by disinterested, informed professionals, the peers of the Competent Person, in the light of circumstances prevailing at the time. To fulfil the requirements of the code, the Competent Person needs to have the broad experience and general knowledge to evaluate input from other disciplines as well as the multidisciplinary technical input. In some cases, the Competent Person role may have to be filled by more than one person who share responsibility for resources and reserves estimations.

One of the most interesting aspects of the definition of what constitutes a Competent Person is the concept of implicit peer review. Continuing discussion of expert reports for the resource industry are raising concepts of explicit peer review as part of the process of identifying consultants with the necessary qualifications and capacity to produce expert reports. This approach may eventually be extended to Competent Person. Relevant experience, particularly detailed knowledge of the specific resource, is the major requirement for reporting resource estimates under the code. The geologist in charge of the project may have that relevant experience and may be the Competent Person in relation to resource estimation for that deposit, provided he/she has the necessary Institute membership and the years and breadth of experience to fill the role. Mining, metallurgical and other staff of the company may be able to supply the necessary additional experience and expertise for reserves estimation. In many cases, the Competent Person will be a much more experienced person brought in from outside the project team who will make use of the local knowledge of the project staff in order to produce acceptable resource and reserve estimates for reporting purposes. The JORC Code provides minimum standards for public reporting to ensure that investors and their advisers have all the information they would reasonably require for forming a reliable opinion on the results and estimates being reported. Students will report resources by using the JORC Code.
JORC Code can be downloaded from http://www.jorc.org/main.php?action=4.

Underground Mine Planning stope optimization and design, development design Mine Production

MEA Resource Estimation

survey, grade control, scheduling, ore blending

Mine Rehabilitation environmental engineering, reclamation, rehabilitation and land use studies

MEA Resource Estimation