CONFIDENCE CREDIBILITY CONSISTENCY

Chasing the investors dollar

N.Miskelly

The mining industry must:

Develop Provide

efficient means to obtain capital

investors with transparent and comprehensive information

To meet both these needs, an international reporting standard will have to be utilised.

 Australia JORC

lead the way with the JORC Code

introduced in 1989 and becomes the model for other national Resource and Reserves Codes (Committee for Mineral Reserves International Reporting Standards) play a major role in code development.

CRISCO

 JORC

stands for the Joint Ore Reserves Committee in 1971 after the Poseidon Boom and Bust

Established

Made

up of a volunteer committee and representation by invitation from other related bodies

 Misleading Share

discoveries

information on Nickel and Gold

price jumps from a $0.80 to $280 with Poseidon Boom and Bust drop when mine cant produce lose money

Prices

Investors Image

of mining shares tainted reporting standards changed

Mining

Poseidon share price rise and fall

 Questionable

reporting standards by Gold Coast-based company called Australian Mining Investments (AMI) million tonnes of copper mineralisation instead of reported 59 million tonnes of transparency in report

25

Lack Can

damage investor confidence

JORC

is a volunteer committee of:

The Australian Institute of Mining and

Metallurgy Minerals Council of Australia Australian Institute of Geoscientists

Representation

by invitation from:

Australian Stock Exchange (ASX) Securities Institute of Australia Others deemed appropriate

Sets minimum standards for public reporting (in Australia and 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

Transparency i.e. the reader of a public report is provided with sufficient information that is clear, unambiguous and understandable Materiality i.e. public reports contain all relevant information reasonably required and expected by investors and professional advisors to make balanced judgements Competence i.e. public reports are based on work, which is the responsibility of suitable qualified and experienced person(s)

Transparency
clear unambiguous presentation JORC Code

Competence
based on work by Competent Person

Materiality all reasonable

information expected

General relationship between Exploration Results, Mineral Resources and Ore Reserves

The Competent Person must have a minimum of five years experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which that person is undertaking
JORC Code clause 8

 Australia

is home to 14% of the worlds exploration expenditure is being spent in Australia and or by Australian companies US$25B in equity raised for mineral exploration since 2004

US$2.5B

Over

Cumulative average abnormal Returns of Exploration announcement

Cumulative average abnormal Returns of Resource announcement

 Confidence: For

people to gain confidence the accuracy of the technical report should be compatible with the accuracy of its contents and that the companies have the correct tools to produce a confident report more Poseidon or CuDeco affairs

Credibility: No

Consistency: JORC

Resource and Reserve classification has so many variables and so few hard benchmarks companies must take ownership

 Quality

estimates and reports in a style that the investor can translate

Good estimates and poor reporting will bring criticism and some lack of credibility, whereas a good report based on a poor estimate could mean the downfall of the company
N Weatherstone

With increasing competition for mining companies to woo investor dollars they must provide transparent resource and reserve reporting in line with a Internationally recognised code to instil confidence and creditability in the industry Also if investors are looking for certainty in their mining investments well this is something no code can deliver they must do their homework like with every form of stock.

References International Mineral Resource and Mineral Reserve Classification and Reporting System ,2002, W.S. Vaughan The JORC Code- A Bankers View, 2001 Q. Amos AIG Journal Practical Interpretation of Mineral Resource and Ore Reserve Classification Guidelines, Vivienne Snowden, AusIMM Guide to Good Practice Progress on International Standards for Reporting of Mineral Resources and Reserves, 2003, Norman Miskelly, CRIRSCO `International Standards for Reporting of Mineral Resources and Reserves- Status, Outlook and Important Issues, N. Weatherstone, CRIRSCO A Clarification of the Reporting Obligations Under the JORC Code- ASX Report The Market Response to Exploration, Resource and Reserve Announcements by Mining Companies, 2010, Bird, Grosse, Yeung ,UTS Review of Compliance with the JORC Code,2009, ASX Media release, M. Gibbs