Page 10 - Why we need a New Mineral Exploration Policy for National Mineral Security?
P. 10
Discussion Paper
Ore Reserves. The JORC Code provides a mandatory the extent of geological knowledge and thence into
system for the classification of mineral Exploration “reserves” based on modifying factors relating to
Results, Mineral Resources and Ore Reserves according mining, processing, metallurgical, infrastructure,
to the levels of confidence in geological knowledge and economic, marketing, legal, environmental, social, and
technical and economic considerations and for their governmental factors, which pertain to technical and
reporting in Public Reports. Public Reports prepared in economic feasibility.
accordance with the JORC Code are for the purpose
of informing investors or potential investors and their While in principle, the system is not too different
advisors. They include annual and quarterly company from the UNFC system described earlier, the JORC
reports, press releases, information memoranda, framework provides for a regular process of public
technical papers, website postings, and public reporting of the exploration progress and the results
presentations of Exploration Results, Mineral Resources prepared by independent third-party professionals
and Ore Reserves estimates. The Australian Securities which imparts a high degree of transparency and
Exchange and the New Zealand Stock Exchange both credibility to the Exploration Results and estimation
require publication of reports in accordance with the of resources and reserves. The use of the JORC Code
JORC Code for all solid minerals, including diamonds, and the processes embedded therein can impart a
other gemstones, industrial minerals, and coal. high degree of confidence to valuations for the purposes
of Mergers and Acquisitions (M&A), and in fact is
In the JORC Code, a Public Report is the responsibility used for such purposes internationally and is recognized
of the company acting through its Board of Directors. by the Stock Exchanges, Financial Institutions, and
Documentation must be prepared by, or under the M&A Advisors.
direction of, and signed by a Competent Person. A
‘Competent Person’ is a minerals industry professional The current system of auctions of “mineral resources”
who is a Member or Fellow of The Australasian Institute under the MMDR Act based on G2-level data for mining
of Mining and Metallurgy, or of the Australian Institute leases and G3-level data for Composite licenses (which
of Geoscientists, or of a ‘Recognized Professional corresponds to [332] and [333], respectively as per
Organization’ (RPO). A Competent Person must have UNFC classification) has several potential problems
a minimum of five years relevant experience in the style arising out of the uncertainty of the estimations. As
of mineralization or type of deposit under consideration mentioned in paragraph 15.1 of the NMEP, the aim is to
and in the activity which that person is undertaking. If build a steady stream of auctionable prospects by funding
the Competent Person is preparing documentation on State Governments through the NMET to produce G3-
Exploration Results, the relevant experience must be or G2-level reports. The estimations are being done by
in exploration. If the Competent Person is estimating, agencies of the same entity (that is, the government),
or supervising the estimation of Mineral Resources, which stands to benefit from the auction and an “arms-
the relevant experience must be in the estimation, length” principle does not seem to be in place, and
assessment, and evaluation of mineral resources. If the the data is not subject to any third-party check or
Competent Person is estimating, or supervising the verification. Additionally, as has already been mentioned,
estimation of Ore Reserves, the relevant experience 332- and 333-level exploration is not enough to quantify
must be in the estimation, assessment, evaluation, and an economically mineable or a potentially economically
economic extraction of ore reserves. mineable reserve, and expert knowledge based on all
the available evidence needs to be brought to bear to
The JORC Code has a checklist or reference for make a valuation for auction purposes, specifying the
use by those preparing Public Reports on Exploration assumptions and projections. A prefeasibility report is
Results, Mineral Resources, and Ore Reserves. It is the essential in such circumstances, and in the interest of a
responsibility of the Competent Person to consider level-playing field, the standard applied to the auction
the criteria listed in the checklist and any additional of mining leases should not be lower than that required
criteria that should apply to the study of a particular for transiting from prospecting to mining under the old
project or operation. (non-auction) provisions of the MMDR Act.
As in the case of the UNFC, in JORC , Exploration The adoption of a robust and more transparent
Results are translated into “resources” based on exploration reporting, such as the JORC Code or
10 JUNE 2017
Ore Reserves. The JORC Code provides a mandatory the extent of geological knowledge and thence into
system for the classification of mineral Exploration “reserves” based on modifying factors relating to
Results, Mineral Resources and Ore Reserves according mining, processing, metallurgical, infrastructure,
to the levels of confidence in geological knowledge and economic, marketing, legal, environmental, social, and
technical and economic considerations and for their governmental factors, which pertain to technical and
reporting in Public Reports. Public Reports prepared in economic feasibility.
accordance with the JORC Code are for the purpose
of informing investors or potential investors and their While in principle, the system is not too different
advisors. They include annual and quarterly company from the UNFC system described earlier, the JORC
reports, press releases, information memoranda, framework provides for a regular process of public
technical papers, website postings, and public reporting of the exploration progress and the results
presentations of Exploration Results, Mineral Resources prepared by independent third-party professionals
and Ore Reserves estimates. The Australian Securities which imparts a high degree of transparency and
Exchange and the New Zealand Stock Exchange both credibility to the Exploration Results and estimation
require publication of reports in accordance with the of resources and reserves. The use of the JORC Code
JORC Code for all solid minerals, including diamonds, and the processes embedded therein can impart a
other gemstones, industrial minerals, and coal. high degree of confidence to valuations for the purposes
of Mergers and Acquisitions (M&A), and in fact is
In the JORC Code, a Public Report is the responsibility used for such purposes internationally and is recognized
of the company acting through its Board of Directors. by the Stock Exchanges, Financial Institutions, and
Documentation must be prepared by, or under the M&A Advisors.
direction of, and signed by a Competent Person. A
‘Competent Person’ is a minerals industry professional The current system of auctions of “mineral resources”
who is a Member or Fellow of The Australasian Institute under the MMDR Act based on G2-level data for mining
of Mining and Metallurgy, or of the Australian Institute leases and G3-level data for Composite licenses (which
of Geoscientists, or of a ‘Recognized Professional corresponds to [332] and [333], respectively as per
Organization’ (RPO). A Competent Person must have UNFC classification) has several potential problems
a minimum of five years relevant experience in the style arising out of the uncertainty of the estimations. As
of mineralization or type of deposit under consideration mentioned in paragraph 15.1 of the NMEP, the aim is to
and in the activity which that person is undertaking. If build a steady stream of auctionable prospects by funding
the Competent Person is preparing documentation on State Governments through the NMET to produce G3-
Exploration Results, the relevant experience must be or G2-level reports. The estimations are being done by
in exploration. If the Competent Person is estimating, agencies of the same entity (that is, the government),
or supervising the estimation of Mineral Resources, which stands to benefit from the auction and an “arms-
the relevant experience must be in the estimation, length” principle does not seem to be in place, and
assessment, and evaluation of mineral resources. If the the data is not subject to any third-party check or
Competent Person is estimating, or supervising the verification. Additionally, as has already been mentioned,
estimation of Ore Reserves, the relevant experience 332- and 333-level exploration is not enough to quantify
must be in the estimation, assessment, evaluation, and an economically mineable or a potentially economically
economic extraction of ore reserves. mineable reserve, and expert knowledge based on all
the available evidence needs to be brought to bear to
The JORC Code has a checklist or reference for make a valuation for auction purposes, specifying the
use by those preparing Public Reports on Exploration assumptions and projections. A prefeasibility report is
Results, Mineral Resources, and Ore Reserves. It is the essential in such circumstances, and in the interest of a
responsibility of the Competent Person to consider level-playing field, the standard applied to the auction
the criteria listed in the checklist and any additional of mining leases should not be lower than that required
criteria that should apply to the study of a particular for transiting from prospecting to mining under the old
project or operation. (non-auction) provisions of the MMDR Act.
As in the case of the UNFC, in JORC , Exploration The adoption of a robust and more transparent
Results are translated into “resources” based on exploration reporting, such as the JORC Code or
10 JUNE 2017
