What is new in the

JORC Code?

ASX Perth
February 2006
 Outline
The JORC Code Introduction &
Background
Changes in 2004 JORC Code
Other Codes and International
Developments
Current Topics of Interest
Frequently Asked Questions
Discussion.
February 2006
 The JORC Code
Introduction & Background
 Introduction

Model for other national Mineral Resource

and Ore Reserves Codes
Major strengths
Incorporation of the JORC Code into the ASX
Listing Rules in 1989
Periodic updating of the Code.

February 2006
 The JORC Code
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
Provides extensive guidelines on the criteria to be considered when
preparing reports on Exploration Results, Mineral Resources and
Ore Reserves.

February 2006
 The JORC Code Does Not ..
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 (ASX)
Individuals, these are dealt with under code of ethics of AIG
and AusIMM or the relevant ROPO.

February 2006
 Principles of the JORC Code

Transparency
Clear and unambiguous presentation of information
Materiality
All the information reasonably required and expected
Competence
Public reports based on work undertaken by
Competent Persons.

February 2006
 Current JORC Members
Chairman:
Deputy Chairs:
Mr Rob Behets (MCA)
Mr Damian Dwyer (MCA)
Mr Peter Forrestal (MCA)
Mr Steve Hunt (AIG)
Mr Warren Staude (SIA)
Mr John Vann (AIG)
Dr Bill Shaw (AIG)
Mr Tim Goldsmith (AusIMM)(co-opted)
Mr Don Larkin (AusIMM) (ex- officio)
Secretariat: The AusIMM.
February 2006
Mr Peter Stoker (AusIMM)
Mr Mark Adams (AusIMM)
Ms Alice Clark (AusIMM)
Mr John Dow (AusIMM)
Mr Gerry Fahey (AIG)
Mr Max Fowles (ASX)
Mr Chris Roberts (AIG)
Mr Pat Stephenson (AusIMM)
Mr Gavin Yeates (MCA)
 Changes in the
2004 JORC Code
 Changes in 2004 JORC Code
Recognised Overseas Professional
Organisations
Naming of Competent Person (transfer from
ASX listing rules)
Competent Person required for Exploration
Results
Consolidation of Reporting of Exploration
Results (transfer from ASX listing rules)
Reporting of Exploration Targets.

February 2006
 Changes in 2004 JORC Code
Encouragement to quantify risk/uncertainty
Revised Diamond Reporting
Revised Coal Reporting
Introduction of Industrial Mineral Reporting
guideline
New Appendix 1 Generic Terms and
Equivalents
Guideline on level of study expected for Ore
Reserves.

February 2006
 Recognised Overseas
Professional Organisations (ROPOs)

1999 Code was unduly restrictive

Competent Persons must belong to AusIMM or AIG
ASX list of ROPOs (currently 21) for overseas
Competent Persons
Referenced in the 2004 Code.

February 2006
 Recognised Overseas
Professional Organisations (ROPOs)
Canada
Similar system
South Africa
Currently implementing a ROPO system
Similar professional standards to AusIMM and AIG
Ability to enforce Rules of Conduct or Codes of Ethics

The ROPO convention facilitates international

reciprocity of Competent Persons.

February 2006
 Current list of ROPOs
ROPOs are currently accredited in
Europe
Canada
United States
South Africa
Detailed list
http://www.asx.com.au/professionals/pdf/ropo_lett
ernovember_2005standalone.pdf

February 2006
 Reporting of Exploration
Results
1999 Code
Public Report on exploration results did not
require the involvement of a Competent Person
2004 Code
Requirement to involve a Competent Person for
Exploration Results introduced

This is where it all began!

February 2006
Reporting of Exploration Targets

1999 Code
No clear distinction between reporting of
exploration results and exploration targets
2004 Code
Clause 18 clarifies the reporting of exploration
targets ( separated from the clause on reporting of
Exploration Results)

This approach is designed to facilitate

responsible reporting by all explorers.

February 2006
 Clause 18 - Reporting of
Exploration Targets
It is common practice for a company to comment on and discuss its
exploration in terms of target size and type
Should not be misrepresented or misconstrued as an estimate of
Mineral Resources or Ore Reserves
The terms Resource and Reserve must not be used in this context
Any statement referring to potential quantity and grade of the target
must be expressed as ranges and must include
(1) a detailed explanation of the basis for the statement, and
(2) a proximate statement that the potential quantity and grade is
conceptual in nature, that there has been insufficient
exploration to define a Mineral Resource and that it is
uncertain if further exploration will result in the determination
of a Mineral Resource.

February 2006
 Changes in 2004 JORC Code
Naming of Competent Person
1999 Code
The requirement for the Competent Person to be
named was not in the Code - ASX listing rules only
2004 Code
Transferred to Clause 8

The naming of the Competent Person has been

a strong deterrent to public reporting by those
who do not qualify as Competent Persons.
February 2006
 Changes in 2004 JORC Code

Resource/Reserve risk and uncertainty

Competent Persons are encouraged to quantify
risk/uncertainty attaching to resource/reserve estimates
(see Guidelines to Clauses 24 & 32 and Table 1)
Not a mandatory requirement
Reflecting mining project evaluation and increasingly
common professional practice.

February 2006
 Changes in 2004 JORC Code
Clause 28 - Level of technical/economic study expected
to have been carried out to convert Mineral Resources
to Ore Reserves achievable mine plan
Requirements for reporting of Exploration Results
transferred from ASX listing rules to Code
The diamond and other gemstone reporting
requirements consolidated and revised
Guidelines for the reporting of Industrial Minerals
introduced
Modification of the coal clauses and recognition of the
new Coal Guidelines.

February 2006
 Changes in 2004 JORC Code
Consolidation of reporting of Exploration Results
1999 Code
ASX listing rules included additional requirements
for reporting of exploration results
2004 Code
Transferred to the Code and removed from the ASX
Listing Rules to consolidate the requirements for
reporting of Exploration Results.

February 2006
Other Codes and International
Developments
Other Codes and International
Developments
Further developments in Resource/Reserve
reporting issues underway
Driven by international forces, principally overseas
regulators
Australia has led the international negotiations
through
Success of the JORC Code
Very successful CMMI/CRIRSCO initiative.

February 2006
Other Codes and International
Developments
USA
SME Reserves Working Group
Recommendations Concerning Estimation and
Reporting of Mineral Resources and Mineral
Reserves
Aimed at resolving differences with SEC
Chile & Peru
New JORC based codes
South Africa
SAMREC update underway.

February 2006
Other Codes and International
Developments
IASB
Extractive Industries Accounting Standard
Request to investigate alignment of the mineral and
petroleum reporting codes
UN-ECE
Classification Framework revision recently
completed
CRIRSCO
International reporting template development.

February 2006
Current Topics of Interest
 Reporting Issues
Reporting of Inferred Resources
Submissions called from industry Quarter 4 2005
Subcommittee to report end Quarter 1 2006
Lack of (or incorrect) statements regarding the
Competent Person
Clause 8 is clear on Public Report requirements
Use of incorrect terminology
Terms such as "Probable Resources", "Geological Resources",
"In situ Reserves", "Mining Reserves", Mining Inventory,
"Possible Reserves" have no meaning under the Code and may
not be used in public reports
Such terms may be used in internal company reports if the
company so wishes, although care should be taken not to create
confusion since they are inconsistent with Code terminology.
February 2006
 Resource and Reserve
Categorisation
The Code does not allow statements in public reports
which provide only total figures for Mineral Resources
or Ore Reserves
Clause 25 - Mineral Resource estimates must be
allocated to the defined categories of Measured,
Indicated and Inferred
Clause 33 - Ore Reserve estimates must be allocated to
the defined categories of Proved and Probable.

February 2006
 Reporting of Only Contained
Metal
Clauses 25 and 33 do not allow the reporting of
contained metal without also reporting Mineral
Resource or Ore Reserve tonnages and grades
It is relevant to the potential investor to know whether a
quoted quantity of contained metal is the product of a
large tonnage of low grade material or of a small
tonnage of high grade material
Quoting contained metal without also quoting grades
can, particularly for Mineral Resources, result in a
potential investor inferring a value for the deposit
which is totally at variance with its true realisable
value.
February 2006
 Relationship between Mineral
Resources and Ore Reserves
Clause 34 requires that, where both Mineral Resources
and Ore Reserves are reported, it is made clear
whether the Mineral Resources are inclusive of, or
additional to the Ore Reserves
Mineral Resources and Ore Reserves, being "apples"
and "pears", should not be added together
Large differences between tonnages of Mineral
Resources and Ore Reserves may be an indication that
not all of the Resources meet the JORC Code
requirement of reasonable prospects for eventual
economic extraction.

February 2006
 Reference to Assessment
Criteria (Table 1)
Clause 17 - Report of Exploration Results must include
information on sampling of the mineralisation such as
drilling/sampling density, drilling/sampling
methodology, sample and assay quality, and so on
Clauses 26 and 35 - Reports of Mineral Resources
and/or Ore Reserves must make mention of any
assessment criteria for which inadequate or poor
quality data materially affects estimation or
classification of the resource or reserve.

February 2006
 Historical or Overseas
Resources
These may seem difficult to report in accordance with the
JORC Code
Continuous disclosure requirements may mean it is desirable
to report information which cannot be reported in a timely
manner in accordance with the JORC Code, e.g. an
acquisition in Kazakhstan, or the acquisition of an older
uranium resource.
The ASX Companies Update (05-04, 25 March 2004)
requires companies to consult the ASX before making any
announcement, with the common direction being to Clause
18
It is also possible to apply for a waiver from the Listing
Rules to cover specific circumstances, for instance a
prospectus.
February 2006
 ASX Monitoring

ASX have increased monitoring of company

reports
Steps are underway to form a review panel to
assist the ASX in this process.

February 2006
Frequently Asked Questions
Who polices the JORC Code?

Companies must comply with ASX listing

requirements
Competent Persons must conform to their institute
Code of Ethics
JORC is an advisory body.

February 2006
 Who polices the JORC Code?
Many examples of reports that appear may not be in
accordance with the JORC Code
They should do something is the cry
But who is they and how do we know if they are doing
something?
The most important they is you.
What should you do? Look on the JORC website for
advice. But dont expect someone else to do it for you.
It is our industry and we all must ensure the standards
are kept high.

February 2006
 What is the expected confidence of
Measured, Indicated and Inferred?
It is accepted that publicly stated resources and
reserves are estimates
The JORC Code is not prescriptive. It does not define
the methodology to use, nor does it define the required
accuracy or precision of estimates
The Competent Person has sufficient experience to
know what is required, and it is his or her reputation
that is on the line
Some guidance is provided in the definitions.

February 2006
 Conclusions
JORC Code was born following a period
of poor industry reporting standards
JORC Code continues to be the basis for
International Codes
Reporting standards need to be
maintained and improved
Increased monitoring activity is planned.

February 2006
Discussion