Comparison of 2012 JORC Code with National Instrument

Transcription

1 IMARC 2014 Comparison of 2012 JORC Code with National Instrument Pat Stephenson, P.Geo., Director, General Manager, Principal Geologist, AMC Mining Consultants (Canada) Ltd, Vancouver, Canada Chairman JORC and Peter Stoker, Principal Geologist, AMC Consultants Pty Ltd, Brisbane, Australia, Chairman JORC September 2014, Melbourne, Australia

2 WHERE IT BEGAN FOR AUSTRALIA

3 Poseidon Nickel, Australia Poseidon Share Price Share Price ($) Date Poseidon Share Price

4 CRIRSCO-STYLE REPORTING STANDARDS

5 Characteristics of CRIRSCO-Style Reporting Standards Principles-based standards: Transparency Materiality Competence Minimum standard for public reporting Classification system of tonnage/grade estimates according to: Geological confidence Technical/economic considerations

6 Figure 1: Relationships between Mineral Resources and Ore (Mineral) Reserves Increasing level of geological knowledge and confidence EXPLORATION INFORMATION MINERAL RESOURCES INFERRED INDICATED MEASURED ORE (MINERAL) RESERVES PROBABLE PROVED Consideration of mining, processing, metallurgical, economic, marketing, infrastructure, legal, environmental, social and governmental factors (the modifying factors )

7 Reasons for Success of CRIRSCO-Style Standards Simplicity. Regulatory backing. Intentional avoidance of excessive prescription. Qualified / Competent Person system. Industry-friendly but designed with the investor in mind.

8 COMPARISON OF CANADIAN AND AUSTRALIAN REGIMES

9 Canadian Reporting Environment CANADA Responsible Entities Professional & Industry Organisations Statutory / Semi- Government Organisations Regulatory Organisations CIM RFAs Provincial & Territory Geological & Engineering Organisations IIROC CSA Provincial & Territory Securities Regulators Best Practice Committee Reserves Committee Stock Exchanges Compliance & Guidance Standards Best Practice Guidelines CIM Definition Standards Qualified Person Incorporated by reference NI Qualified Person Listing Rules Those Required to Comply Professionals Publicly listed companies Relationship Key Compliance Responsible for Guidance May act as Accountability or Enforcement or Oversight Communication link

10 Australian Reporting Environment Australia Responsible Entities Professional & Industry Organisations Statutory / Semi- Government Organisations Regulatory Organisations AusIMM, AIG MCA ASIC RPOs JORC ASX Compliance & Guidance Standards JORC Code Competent Person Incorporated as Appendix Listing Rules Those Required to Comply Professionals Publicly listed companies Relationship Key Compliance Responsible for Guidance May act as Accountability or Enforcement or Oversight Communication link

11 Summary Comparison of Reporting Regimes Requirement to make technical report publicly available to support certain disclosure CANADA AUSTRALIA USA-SME (2013) USA-SEC Yes No However, in certain situations, brief commentary must be made publicly available No No No No. Legally enforceable Yes However, ASX Listing Rules can be enforced under law However, SEC Staff use SME Guide on informal basis in staff comment letters Yes Reporting Resources inclusive or exclusive of Reserves Either Either Exclusive preferred; inclusive permitted N/A Inferred Resources may be used in economic studies No, except in certain restricted situations Yes, with an appropriate warning, but not to support detailed planning Yes, but only in scoping studies with caution N/A

12 Summary Comparison of Reporting Regimes CANADA AUSTRALIA USA-SME (2013) USA-SEC Inferred Resources may be aggregated with Measured/Indicated Resources No Yes No N/A Study required to convert Mineral Resources to Reserves At least PFS At least PFS At least PFS At least FS for new projects; PFS for satellite deposits, Life-of-Mine Plan for expansions Commodity prices based on management s reasonable and supportable expectations Yes Yes Yes No Based on 3-year trailing average or other variation approved by SEC staff Public naming of Qualified / Competent Person required Yes Yes Yes, if requested N/A Qualified / Competent Person at least 5 years experience relevant to situation being reported No 5 years general experience + experience relevant to situation Yes Yes N/A

13 Responsibilities of Qualified Person Deciding whether they qualify as a Qualifying Person. Deciding whether they are independent of the issuer when independent Qualified Person is required. Preparing, or supervising the preparation of, a Technical Report in accordance with Form F1, when such a report is required. Providing scientific and technical advice to the issuer in accordance with applicable professional standards. Undertaking a current inspection of the property that is the subject of the Technical Report. Being familiar with and following, where applicable, NI , CP, other regulatory requirements, CIM Definitions Standards, CIM Best Practices Guidelines. Taking necessary steps to ensure that any work undertaken by non-qualified Persons, upon which they intend to rely, is sound. Taking responsibility for a Resource or Reserve estimate prepared by another Qualified Person for a previously filed Technical Report, where that Resource or Reserve estimate is to be included in the new Technical Report. Providing written consent to the release of a public release based on their work, in the form and context in which it appears, after ensuring that the public release fairly reflects their work. Providing certificate for inclusion in the Technical Report. Providing written consent to the filing of the Technical Report.

14 Responsibilities of Competent Person Deciding whether they qualify as a Competent Person. Preparing or supervising the preparation of documentation upon which a Public Report on Exploration Results, Mineral Resources or Ore Reserves is based. Being familiar with and following, where applicable, securities exchange listing rules and the JORC Code, including all guidance notes and Table 1. Providing written consent to the release of a Public Report based on their documentation, in the form and context in which it appears, after ensuring that the Public Report fairly reflects the documentation.

15 Ni Technical Reports Ten Traps To Avoid 1. Using terms other than Mineral Resources and Mineral Reserves. Terms such as geological resources, diluted resources, mineable resources, mineral inventory are not allowed. 2. Omitting to include cautionary language where required: Section 2.3(2)(a) (exploration target), Section 2.3(3)(a) (results of PEA based on Inferred Resources), Section 2.4(g) (historical estimates), Section 3.4(e) (results of economic analysis of Mineral Resources). 3. Undertaking work at a PFS or FS level, but reporting it as a PEA in order to include Inferred Resources in an economic assessment. 4. Reporting tonnes and grade in a PEA Technical Report that could be confused with Mineral Reserves. 5. Failing to discuss the effect of a PEA on an existing PFS or FS.

16 Ni Technical Reports Ten Traps To Avoid 6. Failing to include cost estimates for recommended work programmes. 7. Disclaiming responsibility for technical and scientific information in Section 3 (Reliance on Other Experts). QPs can only rely on other experts in the areas of (1) legal, political, environmental and tax, (2) diamond / gemstone valuations, and (3) pricing of commodities for which pricing is not publicly available. 8. Failing to include QP opinions on the adequacy of sample preparation, security and analytical procedures (Section 11) and adequacy of exploration data (Section 12). 9. Lack of discussion on how Resource and Reserve estimates could be affected by other factors; 10. Lack of after-tax analysis in economic analysis.

17 WHAT CAN HAPPEN IF WE ARE NOT VIGILANT

18 Busang

19 Busang Poseidon Share Price Share Price ($) Date Poseidon Share Price

20 Busang!!!

21 Summary We ve come a long way in the last 30+ years on reporting of Mineral Resources and Reserves. Now have reasonable consistency in reporting standards across major mining jurisdictions around the world. USA currently exception, but progress is being made. Although we can never protect completely against fraud, let s avoid another Busang! High quality, consistent reporting standards = increased investor confidence = improved funding opportunities

22 Thank you