L24 - Reporting Codes

8/8/2019 L24 - Reporting Codes

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Reporting ofReporting of

Mineral ResourcesMineral Resourcesand Reservesand Reserves

- GLY 361 -


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Why and where do wereport on mineralWhy and where do wereport on mineral

resources and reserves ?resources and reserves ?

When we need to raise fundsto finance newWhen we need to raise fundsto finance newmining developments.mining developments.Equity market forpublicly listed companies.Equity market forpublicly listed companies.

In bankable feasibilityreportsto obtain loansIn bankable feasibilityreportsto obtain loans

When we inform shareholders and businessWhen we inform shareholders and businesspartners in companyreports (quarterly,halfpartners in companyreports (quarterly,half--

yearly and annually).yearly and annually).

Thesestatements on resources and reserves areThesestatements on resources and reserves arelegally binding and could bechallenged in court.legally binding and could bechallenged in court.


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Public Reports include, but are not limitedPublic Reports include, but are not limited

to: company annual reports,quarterlyto: company annual reports,quarterly

reports and otherreportsto the JSE orreports and otherreportsto the JSE or

reportsrequired by law.reportsrequired by law.

It isexpected thatthe following also beIt isexpected thatthe following also be

included:included:

information memorandainformation memoranda

expertreportsexpertreports technicalpapers in respect ofreporting ontechnicalpapers in respect ofreporting on

Exploration Results, Mineral Resources orExploration Results, Mineral Resources or

Mineral Reserves.Mineral Reserves.


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Which aspects are normallyWhich aspects are normally

addressed when reporting on mineraladdressed when reporting on mineralresources and reserves?resources and reserves?

Size of ore bodySize of ore body:: Generally in terms oftons (One metricton =Generally in terms oftons (One metricton =

1000kg )1000kg )

Also million tons (Mt) = 10Also million tons (Mt) = 1066 tons, billion tonstons, billion tons(Bt) = 10(Bt) = 1099 tons.tons.

Sometimesthetotal metal content in the oreSometimesthetotal metal content in the orebodybody also called: contained metal.also called: contained metal.


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Grade of oreGrade of ore:: Generally in terms of % metal (for moreGenerally in terms of % metal (for more

abundantcommodities (e.g. Fe, Mn, Cr, Cu,abundantcommodities (e.g. Fe, Mn, Cr, Cu,Pb, Zn, Ni, Co, V)Pb, Zn, Ni, Co, V)

Gramsperton (g/t) orpartsper millionGramsperton (g/t) orpartsper million(ppm) forprecious metals (e.g.Au,Ag,Pt,(ppm) forprecious metals (e.g.Au,Ag,Pt,Pd, Rh)Pd, Rh)

Special reporting practice forspecificSpecial reporting practice forspecific

minerals (e.g. diamonds and coal)minerals (e.g. diamonds and coal)

Technical Confidence in reported figuresTechnical Confidence in reported figures


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The SAMREC CodeThe SAMREC Code

TheSouth African Code for Reporting of Mineral Resources andMineral Reserves(the SAMREC Code or the Code)sets out minimum standards,recommendations

and guidelines forPublic Reporting ofExplorationResults, Mineral Resources and Mineral Reservesin SouthAfrica.

PREPARED BY THE SOUTH AFRICAN MINERAL RESOURCEPREPARED BY THE SOUTH AFRICAN MINERAL RESOURCE

COMMITTEE (SAMREC) UNDER THE AUSPICES OF THECOMMITTEE (SAMREC) UNDER THE AUSPICES OF THESOUTH AFRICAN INSTITUTE OF MINING AND METALLURGYSOUTH AFRICAN INSTITUTE OF MINING AND METALLURGY

Effective March 2000Effective March 2000

Incorporated into the JSE Listing Rules November 2000Incorporated into the JSE Listing Rules November 2000


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ScopeScope The SAMREC Code sets out minimumThe SAMREC Code sets out minimum

standards, recommendations and guidelines forstandards, recommendations and guidelines forPublic Reporting of Exploration Results, MineralPublic Reporting of Exploration Results, Mineral

Resources and Mineral Reserves in South AfricaResources and Mineral Reserves in South Africa

Adopted (in total and including the guidelines) asAdopted (in total and including the guidelines) asSection 12 by the JSE for listings and additionalSection 12 by the JSE for listings and additional

disclosure requirements by exploration anddisclosure requirements by exploration andmining companiesmining companies


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CompetentPersonCompetentPerson

A Competent Person should have a minimum ofA Competent Person should have a minimum offive yearsfive yearsexperienceexperience relevant to the style of mineralisation and type ofrelevant to the style of mineralisation and type of

deposit under consideration and to the activity which thatdeposit under consideration and to the activity which thatperson is undertaking.person is undertaking.

persons being called upon to sign as a Competentpersons being called upon to sign as a CompetentPerson should be clearly satisfied in their own mindsPerson should be clearly satisfied in their own minds

that they could face their peers and demonstratethat they could face their peers and demonstratecompetence in the commodity, type of deposit andcompetence in the commodity, type of deposit and

situation under considerationsituation under consideration

CompetentPersons Report (CPR)CompetentPersons Report (CPR)


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CompetentPersonCompetentPerson

Aperson who isregistered with any oneAperson who isregistered with any oneof: SACNASP,ECSA,PLATO; orof: SACNASP,ECSA,PLATO; or

Any otherstatutory SouthAfrican orAny otherstatutory SouthAfrican orinternational bodythat isrecognised byinternational bodythat isrecognised by

SAMREC (e.g. Geological Society ofSAMREC (e.g. Geological Society ofSouthAfrica)SouthAfrica)


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SAMREC Guiding PrinciplesSAMREC Guiding Principles

TransparencyTransparency requiresrequires thatthat thethe readerreader ofof aa PublicPublic ReportReport isis providedprovided

withwith sufficientsufficient,, clearclear andand unambiguousunambiguous informationinformation toto understandunderstand thethe

reportreport andand isis notnot misledmisled

Materiality

Materiality requiresrequires thatthat aa PublicPublic ReportReport containscontains allall thethe informationinformationwhichwhich investorsinvestors andand theirtheir professionalprofessional advisersadvisers wouldwould reasonablyreasonably

require,require, andand reasonablyreasonably expectexpect toto findfind inin thethe report,report, forfor thethe purposepurpose ofof

makingmaking aa reasonedreasoned andand balancedbalanced judgementjudgement regardingregarding thethe

mineralisationmineralisation beingbeing reportedreported

CompetenceCompetence requiresrequires thatthat thethe PublicPublic ReportReport bebe basedbased onon thethe workwork ofof aasuitablysuitably qualified,qualified, responsibleresponsible andand experiencedexperienced personperson whowho isis subjectsubject

toto anan enforceableenforceable professionalprofessional codecode ofof ethicsethics..


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REPORTINGTERMINOLOGY


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= concentration of material of economic interest in or= concentration of material of economic interest in or

on the Earths crust in such form, quality and quantityon the Earths crust in such form, quality and quantity

that there arethat there are reasonable and realistic prospects forreasonable and realistic prospects foreventual economic extractioneventual economic extraction..

The location, quantity, grade, continuity and other

geological characteristics of a Mineral Resource are

known, estimated from specific geological evidence

and knowledge, or interpreted from a well constrained

and portrayed geological model.

Mineral ResourcesMineral Resources


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Mineral Resource estimates are not precise

calculations, being dependent on the interpretation

of limited information on the location, shape and

continuity of the occurrence and on the available

sampling results.

Reporting of tonnage and grade figures must reflect

the order of accuracy of the estimate by rounding offto appropriately significant figures and, in the case

ofInferred Mineral Resources, by qualification with

terms such as approximately.



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InferredMineral ResourceInferredMineral Resource

that part of a Mineral Resource for which tonnage, grade

and mineral content can be estimated with a low level of

confidence.

It is inferred from geological evidence and assumed but not

verified geological and/or grade continuity.

It is based on information gathered through appropriate

techniques from locations such as outcrops, trenches, pits,

workings and drill holes that may be limited or of uncertain

quality and reliability.



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IndicatedMineral ResourceIndicatedMineral Resource

that part of a Mineral Resource for which tonnage,

densities, shape, physical characteristics, grade and

mineral content can be estimated with a reasonable levelof confidence.

It is based on exploration, sampling and testing information

gathered through appropriate techniques from locations such

as outcrops, trenches, pits, workings and drill holes.

The locations are too widely or inappropriately spaced to

confirm geological and/or grade continuity but are spaced

closely enough for continuity to be assumed.



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MeasuredMineral ResourceMeasuredMineral Resource

that part of a Mineral Resource for which

tonnage,densities, shape, physical characteristics,

grade and mineral content can be estimated with ahigh level of confidence.

It is based on detailed and reliable exploration, sampling

and testing information gathered through appropriate

techniques from locations such as outcrops, trenches,pits, workings and drill holes.

The locations are spaced closely enough to confirm

geological and grade continuity.



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Mineral ReservesMineral Reserves= economically mineable material derived from a Measured= economically mineable material derived from a Measured

and/orIndicated Mineral Resource. It is inclusive of dilutingand/orIndicated Mineral Resource. It is inclusive of diluting

materials and allows for losses that may occur when thematerials and allows for losses that may occur when the

material is mined.material is mined.

Appropriate assessments, which may include feasibility studies,have been carried out, including consideration of, and

modification by, realistically assumed mining, metallurgical,

economic, marketing, legal, environmental, social and

governmental factors.

These assessments demonstrate at the time of reporting that

extraction is reasonably justified.

Mineral Reserves are sub-divided in order of increasing

confidence into Probable Mineral Reserves and Proved Mineral

Reserves.


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Probable Mineral ReserveProbable Mineral Reserve

the economically mineable material derived from a Measured

and/orIndicated Mineral Resource.

It is estimated with a lower level of confidence than a Proved Mineral Reserve.

It is inclusive of diluting materials and allows for losses that may occur when

the material is mined.

Appropriate assessments, which may include feasibility studies, have been

carried out, including consideration of, and modification by, realistically

assumed mining, metallurgical,economic, marketing, legal, environmental,

social and governmental factors.

These assessments demonstrate at the time of reporting that extraction is

reasonably justified.

Mineral ReservesMineral Reserves


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ProvedMineral ReserveProvedMineral Reserve

the economically mineable material derived from a

Measured Mineral Resource.

It is estimated with a high level of confidence. It is inclusive of diluting

materials and allows for losses that may occur when the material is

mined.

Appropriate assessments, which may include feasibility studies, have

been carried out, including consideration of and modification byrealistically assumed mining, metallurgical, economic, marketing, legal,

environmental, social and governmental factors.

These assessments demonstrate at the time of reporting that

extraction is reasonably justified.

Mineral ReservesMineral Reserves


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To minimize the risk of erroneous or fraudulentTo minimize the risk of erroneous or fraudulentbehavior in mining, Georgius Agricola made abehavior in mining, Georgius Agricola made a

number of recommendations, including:number of recommendations, including:

Those who take an interest in the methods and precepts ofThose who take an interest in the methods and precepts ofmining and metallurgyshould consultexpert miningmining and metallurgyshould consultexpert miningpeople.people. Demonstrated experience is critical.Demonstrated experience is critical.

It is indispensablethatthe minersshould worship GodIt is indispensablethatthe minersshould worship Godwithreverence.withreverence. Strong ethical and moral values and fear ofStrong ethical and moral values and fear ofretribution are characteristics which should be expected.retribution are characteristics which should be expected.

Should the foremen beconvicted of fraud,they are beatenShould the foremen beconvicted of fraud,they are beatenwithrods; oftheft,they arehanged.withrods; oftheft,they arehanged. Clearly defined andClearly defined andenforceable punishment for improper behavior is an effectiveenforceable punishment for improper behavior is an effectivedeterrent.deterrent.


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These statementsThese statements

were made inwere made in 15561556..


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L24 - Reporting Codes