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: Mr Peter Stoker (AusIMM)
Deputy Chairs: Mr Mark Adams (AusIMM)
Ms Alice Clark (AusIMM)
Mr Rob Behets (MCA) Mr John Dow (AusIMM)
Mr Damian Dwyer (MCA) Mr Gerry Fahey (AIG)
Mr Peter Forrestal (MCA) Mr Max Fowles (ASX)
Mr Steve Hunt (AIG) Mr Chris Roberts (AIG)
Mr Warren Staude (SIA) Mr Pat Stephenson (AusIMM)
Mr John Vann (AIG) Mr Gavin Yeates (MCA)
Dr Bill Shaw (AIG)
Mr Tim Goldsmith (AusIMM)(co-opted)
Mr Don Larkin (AusIMM) (ex- officio)
Secretariat: The AusIMM.
February 2006
 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 ROPO’s (currently 21) for overseas
Competent Persons
 Referenced in the 2004 Code.

February 2006
 Recognised Overseas
Professional Organisations (ROPO’s)
 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 ROPO’s
 ROPO’s are currently accredited in
 Europe
 Canada
 United States
 South Africa
 Detailed list
 http://www.asx.com.au/professionals/pdf/ropo_letter
november_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 don’t 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