The implications of the new JORC Code (2012) with regard to disclosurePhil Newall, Managing Director, Wardell Armstrong International

JORC Code (1989-2012)

What is the JORC Code?• Australian Code for Reporting of Exploration

Results, Mineral Resources and Ore Reserves

Where it all began for JORC?• “Poseidon Boom in 1969 and 1970”

First JORC Committee • Established in 1971 by AMIC;

The Editions of JORC Code• First Edition in 1989, revised and updated in 1992,

1996, 2004 and now 2012

JORC Code, 2012 Edition supersedes all previous editions.

JORC Code 2012

What does the JORC Code 2012 set out?• Minimum standards• Recommendations• Guidelines for Public Reporting

What is the JORC Code?• The Code is not a Code that regulates the

methods used by Competent Person in Mineral Resource estimates;

• The term JORC compliant refers to the manner of reporting not to the actual estimates

The Code is applicable to all solid minerals, including diamonds, other gemstones, industrial minerals and coal.

Public Reporting (Clause 6)

The Code is a required minimum standard for Public Reporting

The aim of Public Reports is to inform:• Investors• Potential Investors and Investors Advisers on

Exploration Results, Mineral Resources and/or Ore Reserves

Public Reports, including those for:• ASX;• NZX;• Or other Regulatory Authorities including TSX,

HKEX etc

Effective and Mandatory Date!

Latest version effective 20 December 2012

Mandatory from 01 December 2013

Main Principles of the JORC Code

Transparency Materiality

Competence

JORC Compliant

Reports

Major Changes From 2004

Table 1 and “If not, Why not” Reporting (Clauses 2, 5, 19, 27, 35)

Exploration Targets (Revised Clause 17) Competent Person Attributions (Clause 9) At Least a Prefeasibility Study Level for an Ore

Reserve Declaration (Clause 29) Definition of Technical Studies (Clauses 37, 38,39

and 40) Metal Equivalents (Clause 50) In-situ or in ground values (Clause 51)

Table 1 and “If not, Why not”Reporting

Enhanced disclosure of material information by the Competent Person(CP) in line with information required by Table 1 (Clause 5 in 2012 Edition, no clause in 2004 Edition);

Public Reporting should include detailed reporting of the relevant criteria from Table 1 of the Code, either for the first time or a material change since the last report;

“If not, Why not” reporting (If CP has no comment about a relevant criterion, it should be explained in the report)

The Technical Summary based against Table 1 criteria should be presented as an appendix to the Public Report.

Table 1 Example

Platina Resources Ltd, Updated Resource Estimate for the Skaergaard PGM-Au-Fe-Ti Deposit completed by WAI, Eastern Greenland in July 2013.

Exploration Target

Clause 17 of the 2012 Code (amended Clause 18 of the 2004 Code) explains how Exploration Targets should be reported in Public Reports:

• Exploration target must be quoted as a range of tonnes and a range of grade (or quality) with a detailed explanation of the level of exploration activity already completed;

• Must include a clarification statement, stating conceptual in nature and no guarantee of conversion to Mineral Resource; and

• The terms Resource and Reserve must NOT be used.

Exploration Target Example

A1 Consolidated Gold limited ASX Release-11th February 2013

Competent Person

A Competent person (CP) is a minerals industry professional

CP is Member or Fellow of AIMM, AIG or RPO (differs from 2004 when it was a ROPO)

CP must have a minimum 5 years “relevant” experience in the type of deposits or style of mineralisation, and in the activity which that person is undertaking

One CP may sign off the whole report (ie, taking full responsibility), or individual CP’s will be responsible for their sections.

CP Role in Public Reporting

A Public Report is the responsibility of the Company. With regard to CP requirements, the Company must:

• Disclose any relationship of the CP with the Company in the Public Report

• Where a company re-issues information previously issued, state the details of the original report and CP’s, with the consent of the CP.

The 2012 Code provides:• Appendix 2, Competent Person’s Consent Form• Appendix 3, Compliance Statements

Appendix 2 Competent Person’s Consent Form- Example

Appendix 3 Compliance Statement Form - Example

A1 Consolidated Gold LimitedASX Release – 11th February 2013

Competent Persons Statement The information in this Report that relates to in-situ Mineral Resources is based on information compiled by David Williams of CSA Global Pty Ltd. David Williams takes overall responsibility for the Report. He is a Member of the Australasian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity he is undertaking, to qualify as a Competent Person in terms of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code 2012 Edition). David Williams consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. (http://www.a1consolidated.com.au/images/uploads/A1S_11_05_Resource_Announcement_110213_Final.pdf)

Reporting Terminology & Modifying Factors

Public reports dealing with Exploration Results, Mineral Resources or Ore Reserves must only use the terms set out here:

Modifying Factors are considerations used to convert Mineral Resources to Ore Reserves and include: • Mining • Processing • Metallurgical • Infrastructure • Economic• Marketing • Legal • Environmental • Social and governmental factors

Minimum Pre-Feasibility Study Levelfor an Ore Reserve Declaration (1)

One of the major changes and a new requirement in 2012 Edition (Clause 29), which brings the Code into line with the other international reporting codes and standards.

Clause 29 states that at least a Pre-Feasibility level Study should have been completed to estimate an Ore Reserve;

This new requirement establishes a minimum benchmark for the level of technical and economic study that is undertaken to examine the Modifying Factors as part of any Ore Reserve estimate that is included in a Public Report.

Deriving an Ore Reserve without a mine design or mine plan through a process of factoring of the Mineral Resource is unacceptable;

In reporting of a new or materially changed Ore Reserve, the key underlying assumptions and outcomes of the Pre-Feasibility or Feasibility Study must be disclosed; and

There must be reasonable grounds to expect that all necessary approvals (including Government) or sales contracts will be resolved within the anticipated time frame required by the mine plans.

Minimum Prefeasibility Study Levelfor an Ore Reserve Declaration (2)

In order to allow mining companies time to prepare, the clause (Clause 29) stipulating the need for a Pre- or Feasibility Study in order to define Ore Reserves does not come into effect until 1 December 2014.

Companies in production that have a “Life of Mine” plan should have sufficient accurate data to be able to circumvent the need for such studies, but this will be up to the CP to decide.

Minimum Pre-Feasibility Study Levelfor an Ore Reserve Declaration (3)

Technical Studies

There is no equivalent to Clause 37-40 in the 2004 Edition.

In new edition, a new section has been added to define and describe:

• A Scoping Study• Pre-Feasibility Study• Feasibility Study

The aim of these Clauses is to provide clarity on what is expected when reporting using these terms.

Scoping Study

An order of magnitude technical and economical study of the potential viability of Mineral Resources;

Includes appropriate assessments of realistically assumed Modifying Factors and any other relevant operational factors;

A basis for a Pre-Feasibility Study; The first economic evaluation of a project commonly

and is based on low-level technical and economic assessments (+/- 35% accuracy or more);

A Scoping Study must not be used as the basis for estimation of Ore Reserves;

If the outcome of this study is supported by Inferred Mineral Resources and/or Exploration Target, the Public Report must state both the proportion and sequencing of these, and

Must include a cautionary statement.

Preliminary Feasibility Study

Comprehensive study considering a range of options for the technical and economic viability of the project;

Identifies a preferred mining method, an effective mineral processing method, infrastructure requirements and capacities (but is NOT final);

Detailed assessments of environmental and socio-economic impacts and requirements;

Includes a financial analysis based on Modifying and other relevant factors to determine what proportion of Mineral Resources will be converted to Ore Reserves (no Inferred in Mine Plan);

A lower confidence level than a Feasibility Study (+/- 25% accuracy); and

Highlights areas that require further study for the final stage assessment.

Feasibility Study

Comprehensive technical and economic study of the selected development option of the project;

Contains mining, infrastructure and process designs; Includes a detailed assessment of applicable

Modifying Factors, operational factors (as outlined in Table 1) and detailed financial analysis to demonstrate that extraction is economically viable;

Expect that all necessary approvals (social, environmental and governmental) will be in place or executed within the anticipated time frame;

Basis for a final decision on investment or to support project financing;

A higher confidence level than a Pre-Feasibility Study; and

“Bankable Feasibility” and “Definitive Feasibility Study” are equivalent to a Feasibility Study.

Metal Equivalents

There is no equivalent Clause 50 in the 2004 Edition of the Code

An extremely important new requirements for Public Reporting of Exploration Results, Mineral Resources or Ore Reserves in terms of “metal equivalent”

Must show details of all material factors:

• Individual grades for all metals• Assumed commodity prices for all metals• Assumed metallurgical recoveries for all metals and their

source (metallurgical testwork, detailed mineralogy, similar deposits, etc)

• A clear statement on potential of the recovery and sales of all the elements included in the metal equivalents calculation

• The calculation formula used

Metal Equivalents Example

Platina Resources Ltd, Updated Resource Estimate for the Skaergaard PGM-Au-Fe-Ti Deposit completed by WAI, Eastern Greenland in July 2013.

In Situ, or In Ground Valuations

No equivalent Clause 51 in the 2004 Edition of the Code

Clause 51 introduces a new prohibition on the publication of “in situ” or “in ground” financial valuations in a Public Report

Publication of these valuations are contrary to the intent of Clause 4 and 28; hence the terms are not transparent and lack material information

To determine the project viability, it is necessary to include all reasonable Modifying Factors (Clauses 29-36)

What are the other Codes?

NI 43-101 and TSX and TSX-Venture Exchange policies; CIM, JORC, PERC, IG-7, SAMREC

United States SEC Industry Guide 7, (SME)

Certification Code for Exploration Prospects, Mineral Resources and Ore Reserves (IIMCH)

LSE and AIM Rules for Companies; PERC, CIM, SAMREC, JORC, SME, Russian code

Hong Kong Exchange Rules

JORC and ASX Industry Updates

JSE Listing Rules: SAMREC

NI 43-101 and JORC (2012:Similarities

Both require the involvement of a QP or CP (in Chile, Qualified Competent Person) and recognise foreign professional associations

Definition of mineral resources and ore reserves are the same

Preliminary Economic Assessment analogous to Scoping Study

Definitions of Pre-Feasibility and Feasibility Study are the same

Pre-Feasibility minimum standard for ore reserves

NI 43-101 and JORC (2012):Differences

NI 43-101 is a securities law (driven by lawyers) whereas JORC is a policy guideline (prepared by industry professionals)

NI 43-101 applies to all oral and written disclosure of material information and is highly prescriptive, whereas JORC applies to written disclosure of exploration results and mineral resources and reserves and ultimately relies on the CP

Technical reports: • NI 43-101 – many triggers and reports filed on

SEDAR • JORC – technical reports not readily available –

some commercially sensitive information can be omitted

Summary

More responsibility and accountability to the Competent Person;

Sets out reporting pathway from Scoping through Pre-Feasibility to Feasibility Study;

Exploration targets can only be defined through a range of tonnages and grades;

QA/QC data vital to advance a project; Minimum Pre-Feasibility Study required for

Ore Reserve reporting; Tighter controls on reporting Metal

Equivalents and no In-situ valuations, and Brings JORC into line with other international

codes through Transparency, Competence & Materiality

pnewall@wardell-armstrong.comwww.wardell-armstrong.com