Resource and Reserve Reporting in a Changing World: the AngloGold Ashanti Experience. Michael F O Brien AngloGold Ashanti Limited

Transcription

1 Resource and Reserve Reporting in a Changing World: the AngloGold Ashanti Experience Michael F O Brien AngloGold Ashanti Limited

2 Changes since 1994 Expansion of AGA outside South Africa Exposure to international regulation Different types of deposits Changes to Public Reporting Local (SAMREC/SAMVAL - related) International (SOX, driven by Resource Company failures) Technical innovation 2

3 History of Mineral Resource Codes 1972 S.Africa Australia UK/EU Canada USA Others McKelvey Russian 1980 GS831 IAEA 1989 JORC CMMI-CRIRSCO CRIRSCO definitions 2000 SAMREC JORC99 The Reporting Code SAMREC07 JORC04 NI SME Industry Guide 7 UNIF 3

4 SAMREC Code: Figure 1 4

5 AGA Exposure to International Reporting Frameworks South Africa (primary listing) Australia USA 5

6 6

7 (After Stephenson, March 2008) 7

8 (After Stephenson, March 2008) 8

9 An Example of Reporting Changes WDL 1990 to Mponeng

10 WDL VCR 1990) Conservative view of accessible reserves 10

11 West Wits VCR (2007) More expansive view of ultimate Mineral Resources 11

12 AGA s Approach to Public Reporting Multi-disciplinary team effort, with designated and appointed Competent Persons for each operation. Periodic external independent review. A Scoping Study as a minimum to assess reasonable and realistic prospects for eventual economic extraction to declare a Mineral Resource. An audited Pre-Feasibility study as a minimum to demonstrate the viability of a project and meet the Company s investment requirements to declare a Mineral Reserve. Mineral Resource Classification is to be based on the 15% Rule. 12

13 Public Reporting: Documentation and Continuity The appointed Competent Persons are the custodians of Exploration Information, Mineral Resource and Ore Reserve knowledge. The AGA Mineral Resource & Ore Reserve Steering Committee regulate the reporting process. Documentation chain includes: Guidelines Document (Internal, updated annually) Intranet-based database system (Internal, updated periodically) Mineral Resource & Ore Reserve Statement (Internal, by operation, updated annually) Documented SOX Compliance (Internal) Supplementary Information: Mineral Resources and Ore Reserves (Public; a component of Annual Financial Reporting) 13

14 Mineral Resource Classification: the 15% Rule. A Measured Mineral Resource should be reasonably expected to be within 15% of the metal estimated at least 90% of the time (three month periods). An Indicated Mineral Resource estimate: the annual estimate should reasonably expected to be within 15% of the metal estimated at least 90% of the time (yearly periods). An Inferred Mineral Resource the error may be greater then 15%, 90% of the time (yearly periods). 14

15 Mineral Resource Classification Applying the Rules The process and methodology are at the discretion of the Competent Person. Statistical analysis, conditional simulation or an empirical reconciliation-based approach may be employed. All operations are responsible for demonstrating, through reconciliation, that their classification system conforms to the 15% Rule. 15

16 Requirements For Publishing an Ore Reserve The Proved and Probable Reserves on their own, (excluding Inferred Mineral Resource) must be sufficient to ensure a positive real cash flow over the payback period. P/F Study is to have been reviewed and signed off by the operational team; The study is to have been reviewed and signed off by the Business and Technical Development Department. For a Greenfields project, the requirements are identical to the above, except that an audited feasibility study must have been completed. 16

17 Gold Price AGA apply a Resource Gold Price and a Reserve Gold Price. A premium is applied to the Resource Gold Price compared with the Reserve Gold Price. These different prices are used in optimisation and to generate cash flows in the economic studies. For open pit mining examples, this leads to a Reserve Pit Shell and a (larger) Resource Pit Shell. The higher Resource Gold price is designed to convey the opportunity that may accrue to Mineral Resources in the longer term due to fluctuations in the gold price. 17

18 Reserve/Resource Shells Reserve Shell Resource Shell 18

19 Resource & Reserve Parameters (2007) 19

20 Ore Reserves: SAMREC/JORC versus SEC Differences in requirements between the JORC/SAMREC Codes and the US Security and Exchange Commission (SEC) require an iterative process for the statement of Ore Reserves, and may require two different reserve statements for any particular mine. The following process is employed: Determine the Reserve to meet JORC/SAMREC requirements, employing the JORC/SAMREC gold price and exchange rates as defined in the appendices for the appropriate reporting year. Test the JORC/SAMREC reserve for economic viability at the SEC gold price and exchange rate parameters specified in the appendices. If the production plan is still year-by-year cash flow positive, report the JORC/SAMREC Ore Reserve; otherwise, truncate the Ore Reserve for production years which are cash flow negative, or modify the production profile to defer negative cash flow as long as possible, then report the modified SEC Ore Reserve. The test should be applied at the projected (9+3) three year average SEC gold price and the results are reported at year-end. 20

21 References Comparison of Reporting Environments in Canada, Australia and USA By Pat Stephenson, Jean-Michel Rendu and Peter Stoker Guidelines For The Reporting Of Exploration Results, Mineral Resources And Ore Reserves, AGA Limited Internal Document The South African Code For The Reporting Of Exploration Results, Mineral Resources And Mineral Reserves (The Samrec Code) 2007 Edition 21

22 Mineral Resources and Ore Reserves Reporting Mineral Resources and Ore Reserves are reported in accordance with the minimum standard described by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code, 2004 Edition), and also conform to the standards set out in the South African Code for the Reporting of Mineral Resources and Mineral Reserves (the SAMREC 2000 Code). Mineral Resources are inclusive of the Ore Reserve component unless otherwise stated. 22