The SAMREC Code
DRAFT SOUTH
AFRICAN CODE FOR REPORTING
OF MINERAL
RESOURCES AND MINERAL RESERVES
(THE SAMREC CODE)
PREPARED BY THE
SAMREC WORKING GROUP
ON THE COMPILATION
OF THE MAIN SOUTH AFRICAN CODE
To Take Effect
November 1999 Updated after the meeting of 20/04/1999
Cd200499.doc
Foreword
- The South African Code for Reporting of
Mineral Resources and Mineral Reserves (the ‘SAMREC Code’ or ‘the
Code’) sets out minimum standards, recommendations and guidelines for Public
Reporting of exploration results, Mineral Resources and Mineral Reserves in South Africa.
It has been drawn up by the South African Mineral Resource Committee (‘SAMREC’)
under the auspices of the South African Institute of Mining and Metallurgy
(‘SAIMM’). The SAMREC Committee consists of representatives of the SAIMM, the
South African Council for Natural Scientific Professions (‘SACNASP’), the
Geological Society of South Africa (‘GSSA’), the Geostatistical
Association of South Africa (‘GASA’), the Engineering Council of South Africa
(ECSA), the South African Council for Professional Land Surveyors and Technical Surveyors
(PLATO), the Association of Law Societies of South Africa, the General Council of the BAR
of South Africa, the Department of Minerals and Energy, the Johannesburg Stock Exchange
(JSE), the Council for Geoscience, the South African Council of Banks, the Chamber of
Mines of South Africa (‘CoM’), the University of the Witwatersrand and the South
African Coal Industry. SAMREC was established in 1998 and modeled its Code on the Australasian
Code for Reporting of Mineral Resources and Ore Reserves (‘JORC Code’).
- In 1992 a committee was formed by GSSA,
including GASA, in response to the Council of Mining and Metallurgical Institutions
(‘CMMI’) to compile the first South African Code for reporting reserves and
resources. The final draft (‘Draft 6’) was presented in conjunction with SAIMM
for discussion at the 1994 CMMI Conference at Sun City and to the JSE Listing Committee.
In 1994, the CMMI formed an ad-hoc International Definitions Group to create a set of
international definitions for reporting mineral resources and mineral reserves with
representatives from mining and metallurgical institutions from the United States
(‘SME’), Australia (‘AusIMM’), Canada (‘CIM’), the United
Kingdom (‘IMM’) and South Africa (SAIMM). A major breakthrough came in October
1997 when the CMMI International Definitions Group met in Denver, Colorado and reached a
provisional agreement (the Denver Accord) on definitions of mineral resources and mineral
reserves. Concurrently, and since 1992, the United Nations Economic Commission for Europe
(UN-ECE) has been developing an international framework classification for mineral
resources and mineral reserves. A joint meeting was held in Geneva on October 4, 1998
between the CMMI International Definitions Group and the UN-ECE Task Force. Agreement was
reached to incorporate the CMMI standard reporting definitions for mineral resources and
reserves into the UN framework classification, thus giving truly international status to
the CMMI definitions. The definitions in the SAMREC Code are consistent with those agreed
at the Denver Accord by the CMMI participants.
- In this first edition of the SAMREC Code,
the guidelines have been placed after the respective Code clauses to provide improved
assistance and guidance to readers in interpreting the Code. These guidelines are indented
and are in italics. The same indented italics type face formatting has been applied to any
appendix to this Code.
- The Code has been adopted by SAIMM and
SAMREC member organisations and is therefore binding on members of those organisations.
The Code is incorporated in the JSE Listing Rules.
- The main principles governing the
operation and application of the SAMREC Code are transparency, materiality and competence.
‘Transparency’ requires that the reader of a Public Report is provided with
sufficient information, the presentation of which is clear and unambiguous, to understand
the report and is not misled. ‘Materiality’ requires that a Public Report
contains all the relevant information which investors and their professional advisers
would reasonably require, and reasonably expect to find in the report, for the purpose of
making a reasoned and balanced judgement regarding the mineralisation being reported.
‘Competence’ requires that the Public Report is based on work which is the
responsibility of a suitably qualified and experienced person who is subject to an
enforceable professional code of ethics.
- The Code is applicable to all minerals, as
defined in the Minerals Act No 50 of 1991, for which Public Reporting of
exploration results, Mineral Resources and Mineral Reserves is required by the JSE.
Minerals are defined in this Act as follows: any substance whether in solid, liquid or
gaseous form, occurring naturally in or on the earth, in or under water or in tailings or
dumps, and having been formed by or subjected to a geological process, excluding water but
including sand, stone, rock, gravel and clay, as well as soil other than topsoil.
- The Code is a required minimum standard
for Public Reporting. The committee also recommends its adoption as a minimum standard for
other reporting. Reference in the Code to a Public Report or Public Reporting is to a
report or reporting on exploration results, Mineral Resources or Mineral Reserves,
prepared for the purpose of (a) satisfying regulatory requirements or (b) informing
investors or potential investors and their advisers. Companies are encouraged to
provide information which is as comprehensive as possible in their Public Reports.
Public Reports include, but are not limited to:
company annual reports, quarterly
reports and other reports to the JSE or required by law. It is recommended that the Code
also applies to the following: information memoranda; expert reports and technical papers
in respect of reporting on exploration results, Mineral Resources or
Mineral Reserves.
While every effort has been made
within the Code and Guidelines to cover most situations likely to be encountered in the
Public Reporting of exploration results, Mineral Resources and Mineral Reserves, there
will inevitably be occasions when doubt exists as to the appropriate procedure to follow.
In such cases, users of the Code and those compiling reports under the Code should be
guided by its intent, which is to provide a minimum standard for Public Reporting: also to
ensure that such reporting contains all information that investors and their professional
advisers would reasonably require, and reasonably expect to find in the report, for the
purpose of making a reasoned and balanced judgement regarding the mineralisation being
reported.
- Public Reports must provide all relevant
and material information, necessary for an intelligent layman to make a reasonable and
balanced assessment of the exploration information, Mineral Resource or Mineral Reserve
being reported.
Table 1, included at the end of the
Code, supplies an outline of items that should be considered when evaluating a project.
The importance of each item will vary with the project and it is recognized that, for some
projects, other items may be relevant which are not on the list. The Table should be
considered a guide to facilitate a rational and orderly approach to evaluation. However,
the need remains for exploration and mining professionals to make difficult decisions,
such as the classification of material as a Mineral Resource or a Mineral Reserve.
Decisions remain a matter of professional judgment based on knowledge, experience, and
industry practices.
Public disclosure may be required of those items in Table 1 most likely to affect the
accuracy of estimates made in the report. The authors of reports should both identify and
evaluate these important factors within their reports.
It is recognized that estimates of exploration information, Mineral Resources, and Mineral
Reserves, being predictions of what will occur in the future based on imperfect knowledge
of the present, are inherently subject to some level of confidence and inaccuracy. Levels
of confidence are covered in the Code.
- SAMREC recognises that further review of
the Code will be required from time to time.
- . Any addition to this Code which may be
required for any specific mineral may be dealt with in appendices to this Code.
Competence and
Responsibility
11. Documentation
detailing Mineral Resources and Mineral Reserves estimates from which a Public Report on
Mineral Resources and Mineral Reserves is prepared, must be prepared by or under the
direction of, and signed by, a Competent Person.
12. A Public Report
concerning a company’s Mineral Resources and/or Mineral Reserves is the
responsibility of the company acting through its Board of Directors. Any such report must
be based on, and fairly reflect, a Mineral Resource and/or Mineral Reserve report prepared
by a Competent Person. A Public Report shall disclose the name of the Competent Person,
and shall require the Competent Person’s written approval for the relevant parts of
his report included in the document.
13. A Competent
Person is a person who is registered with the South African Council for Natural Scientific
Professions (SACNASP), and/or the Engineering Council of South Africa (ECSA), and/or the
South African Council for Professional Land Surveyors and Technical Surveyors (PLATO) or
any other statutory or South African or international body approved by SAMREC. A competent
person should have a minimum of five years experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which that
person is undertaking. If the Competent Person is estimating, or supervising the
estimation of Mineral Resources, the relevant experience must be in the estimation,
assessment and evaluation of Mineral Resources. If the Competent Person is estimating, or
supervising the estimation of Mineral Reserves, the relevant experience must be in the
estimation, assessment, evaluation and economic extraction of Mineral Reserves.
The key qualifier in the definition of
a Competent Person is the word " relevant". Determination of what constitutes
relevant experience can be a difficult area and common sense has to be exercised. For
example, in estimating vein gold mineralisation, experience in a high-nugget, vein-type
mineralisation such as tin, uranium etc. will probably be relevant whereas experience in
(say) massive-type deposits may not be. As a second example, a person, to be considered
competent in evaluating and reporting on alluvial gold deposits, should have considerable
(typically five years) experience in this type of mineralisation, because of the
characteristics of gold in alluvial systems, the particle sizing of the host sediment, and
the low grades being quantified. Experience with placer deposits containing minerals other
than gold may not necessarily provide appropriate relevant experience.
The key word "relevant" also
means that it is not always necessary for a person to have five years experience in each
and every type of deposit in order to act as a Competent Person if that person has
relevant experience in other deposit types. For example, a person with (say) 20 years
experience in Mineral Resource estimation in a variety of metalliferous hard-rock
deposit types may not require five years specific experience in (say) porphyry copper
deposits in order to act as a Competent Person. Relevant experience in the other deposit
types would count towards the required experience in relation to porphyry copper deposits.
In addition to experience in the style of mineralisation, a Competent Person reporting
Mineral Resources must have sufficient knowledge of sampling and assaying techniques
relevant to the deposit under consideration to be aware of problems which could affect the
reliability of the data. Some appreciation of extraction and processing techniques
applicable to that deposit type would also be important.
As a general guide, persons being
called upon to sign as a Competent Person should be clearly satisfied in their own minds
that they could face their peers and demonstrate competence in the commodity, type of
deposit and situation under consideration.
Estimation of Mineral Resources may be
a team effort (for example, involving one person or team collecting the data and another
person or team preparing the Mineral Resource estimate); estimation of Mineral Reserves is
commonly a team effort involving a number of technical disciplines. The Competent Person
who signs the report is responsible and accountable for the whole of the report under the
Code. However, it is recommended that, where there is a clear division of responsibilities
within a team, each Competent Person must accept responsibility for, his or her particular
contribution. For example, one Competent Person could accept responsibility for the
collection of Resource data, another for the Resource estimation process, another for the
mineability study, and the project leader could accept responsibility for the overall
report. It is important that the Competent Person accepting overall responsibility
for a Mineral Resource or Mineral Reserve report which has been prepared in whole or in
part by others is satisfied that the work of the other contributors is acceptable or the
constituent parts of the report have been signed by such contributors as Competent
Persons in their own right.
The Competent Person undertaking
Mineral Resource or Mineral Reserve reporting must accept full responsibility for the
report and must not treat the procedure merely as a "rubber-stamp" exercise. If
a complaint is made in respect of the professional work of a Competent Person, the
complaint will be dealt with by the relevant SAMREC approved body with which the Competent
Person is registered.
Reporting Terminology
14. Public Reports
dealing with Mineral Resources and/or Mineral Reserves must only use the terms set out in
Figure 1.
Figure 1
Relationship between
Mineral Resources and Mineral Reserves
Figure 1 sets out the framework for
classifying tonnage and grade estimates so as to reflect different levels of geoscientific
confidence and different degrees of technical and economic evaluation. Mineral Resources
can be estimated on the basis of geoscientific information with input from relevant
disciplines. Mineral Reserves, which are a modified sub-set of the Indicated and Measured
Mineral Resources (shown within the dashed outline in Figure 1), require consideration of
those factors affecting extraction, including mining, metallurgical, economic, marketing,
legal, environmental, social and governmental factors ("modifying factors"), and
should in most instances be estimated with input from a range of disciplines.
In certain situations, Measured
Mineral Resources could convert to Probable Mineral Reserves because of uncertainties
associated with modifying factors which are taken into account in the conversion from
Mineral Resources to Mineral Reserves. This relationship is shown by the broken arrow in
Figure 1. Although the trend of the broken arrow includes a vertical component, it does
not, in this instance, imply a reduction in the level of geological knowledge or
confidence. In such a situation these modifying factors should be fully explained.
Refer also to guidelines to Clause 32.
Reporting - General
15. Public Reporting
concerning a company’s Mineral Resources or Mineral Reserves should include a
description of the style and nature of mineralisation.
16. A company must
disclose relevant information concerning the status and characteristics of a mineral
deposit which could materially influence the economic value of that deposit, and promptly
report any material changes in its Mineral Resources or Mineral Reserves.
17. Companies must
review and publicly report on Mineral Resources and Mineral Reserves in their annual
reports.
18. Throughout the Code,
where appropriate, "quality" may be substituted for "grade" and
"volume" may be substituted for "tonnage". In this Code any reference
to the singular shall include a reference to the plural, where appropriate.
Reporting of
Exploration Results
19. A company may
choose, or be required, to report exploration results. If a company reports exploration
results in relation to mineralisation not classified as a Mineral Resource or Mineral
Reserve, then estimates of tonnage and associated average grade must not be reported.
Descriptions of exploration targets or
exploration potential given in Public must be expressed so as not to misrepresent them as
an estimate of Mineral Resources or Mineral Reserves.
20. Public Reports of
exploration results relating to mineralisation not classified as a Mineral Resource or
Mineral Reserve must contain sufficient information to allow a considered and balanced
judgement of the significance of the results. This must include all relevant prospecting
information. The reporting of exploration results must not be presented so as to
unreasonably imply that potentially economic mineralisation has been discovered and it is
for this reason that Exploration Results are not included in Figure 1.
Relevant prospecting information
should include the interpretation of geological continuity, sampling results, locations
etc. Table 1, which is at the end of this Code, is a checklist guideline that those
preparing reports on exploration results, Mineral Resources and Mineral Reserves
should use as a reference. The checklist is not prescriptive and, as always, relevance and
materiality are overriding principles which determine what information should be publicly
reported. Reporting of isolated assays without placing them in perspective is
unacceptable.
Reporting of Mineral
Resources
21. A "Mineral
Resource" is a concentration or occurrence of material of economic interest in or on
the Earth’s crust in such form and quantity that there are reasonable and realistic
prospects for eventual economic extraction. The location, quantity, grade, continuity and
other geological characteristics of a Mineral Resource are known, estimated or interpreted
from a well constrained and portrayed geological model. Mineral Resources are subdivided,
in order of increasing confidence and in respect of geoscientific evidence, into Inferred,
Indicated and Measured categories.
Portions of a deposit that do not have
reasonable and realistic prospects for eventual economic extraction must not be included
in a Mineral Resource, unless; where the assessment of "reasonable and realistic
prospects" is uncertain, details of such included resources must be given.
The term "Mineral Resource"
covers the in-situ mineralisation as well as dumps or tailings, which have been identified
and estimated through exploration/assessment and sampling from which Mineral Reserves may
be derived by the consideration and application of the modifying factors.
The term "reasonable and
realistic prospects for eventual economic extraction" implies a judgement (albeit
preliminary) by the Competent Person in respect of the economic factors likely to
influence the prospect of economic extraction, including the approximate mining
parameters. In other words, a Mineral Resource is not an inventory of all mineralisation
drilled or sampled, regardless of cut-off grades, likely mining dimensions, location or
continuity. It is a realistic inventory of mineralisation which, under assumed and
justifiable technical and economic conditions, might become economically extractable.
Certain reports (eg: some inventory
reports, exploration reports to government and other similar reports not intended
primarily for providing information for investment purposes) may require full disclosure
of all mineralisation, including some material that does not have reasonable and realistic
prospects for eventual economic extraction. Such estimates of mineralisation would not
qualify as Mineral Resources or Mineral Reserves.
Interpretation of the word
‘eventual’ in this context may vary depending on the commodity or mineral
involved. For example, for many coal, iron ore, bauxite and other bulk minerals or
commodities, it may be reasonable to envisage ‘eventual economic extraction’ as
covering time periods in excess of 50 years. However for the majority of gold deposits,
application of the concept would normally be restricted to perhaps 20 to 30 years, and
frequently to much shorter periods of time.
Where considered appropriate by the
Competent Person, Mineral Resource estimates may include mineralisation below the selected
cut-off grade to ensure that the Mineral Resources comprise bodies of mineralisation of
adequate size and continuity to properly consider the most appropriate approach to mining
including any dilution resulting from the requirements of any minimum mining width.
Documentation of Mineral Resource estimates should clearly identify any such inclusions,
and Public Reports should include commentary on the matter if considered material.
22. 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 off to appropriately significant figures and, in the
case of Inferred Mineral Resources, by qualification with terms such as
"approximately".
Rounding off must convey properly the
uncertainties in estimation.
In order to emphasise the imprecise
nature of a Mineral Resource or Mineral Reserve estimate, it is recommended that the final
results always be referred to as an estimate not a calculation. 23. An ‘Inferred Mineral
Resource’ is 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 which may be of limited or uncertain
quality and reliability.
An Inferred Mineral Resource has a lower
level of confidence than an Indicated Mineral Resource.
The category is intended to cover
situations where a mineral concentration or occurrence has been identified and limited
measurements and sampling completed, but where the data are insufficient to allow the
geological and/or grade continuity to be confidently interpreted. Due to the uncertainty
which may attach to some Inferred Mineral Resources, it cannot be assumed that all or part
of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral
Resource as a result of continued exploration. Confidence in the estimate is usually not
sufficient to allow the appropriate application of technical and economic parameters or to
enable an evaluation of economic viability. This category is not normally considered in
economic studies.
24. An
‘Indicated Mineral Resource’ is that part of a Mineral Resource for
which tonnage, densities, shape, physical characteristics, grade and mineral content can
be estimated with a reasonable level of 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.
An Indicated Mineral Resource has a lower
level of confidence than a Measured Mineral Resource, but has a higher level of confidence
than an Inferred Mineral Resource.
An Indicated Mineral Resource requires
that the nature, quality, amount and distribution of data are such as to allow the
Competent Person to confidently interpret the geological framework and to assume
continuity of mineralisation. Confidence in the estimate is sufficient to allow the
appropriate application of technical and economic parameters and to enable an evaluation
of economic viability.
25. A ‘Measured
Mineral Resource’ is that part of a Mineral Resource for which tonnage,
densities, shape, physical characteristics, grade and mineral content can be estimated
with a high 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.
A Measured Mineral Resource requires
that the nature, quality, amount and distribution of data are such as to leave no
reasonable doubt in the opinion of the Competent Person, that the tonnage and grade of the
mineralisation can be estimated to within close limits and that any variation from the
estimate would not significantly affect potential economic viability. This category
requires a high level of confidence in, and understanding of, the geology and controls of
the mineral deposit. Confidence in the estimate is sufficient to allow the appropriate
application of technical and economic parameters and to enable an evaluation of economic
viability with a higher level of confidence.
26. The choice of the
appropriate category of Mineral Resource depends upon the quantity, distribution and
quality of data available and the level of confidence attached to those data. The
appropriate Mineral Resource category must be determined by a Competent Person.
Mineral Resource classification is a
matter for skilled judgement and the Competent Person must take into account those items
in Table 1 which relate to confidence in Mineral Resource estimation.
In deciding between Measured Mineral
Resources and Indicated Mineral Resources, the Competent Person may find it useful to
consider, in addition to the phrases in the two definitions relating to geological and
grade continuity in Clauses 24 and 25,
the phrase in the guideline to the
definition for Measured Mineral Resources, ".... any variation from the estimate
would not significantly affect potential economic viability".
In deciding between Indicated Mineral
Resources and Inferred Mineral Resources, the Competent Person may wish to take into
account, in addition to the phrases in the two definitions in Clauses 23 and 24 relating
to geological and grade continuity, the guideline to the definition for Indicated Mineral
Resources: "Confidence in the estimate is sufficient to allow the appropriate
application of technical, economic and financial parameters and to enable an evaluation of
economic viability". This contrasts with the guideline to the definition for Inferred
Mineral Resources: "Confidence in the estimates is usually not sufficient to allow
the appropriate application of technical, economic and financial parameters or to enable
an evaluation of economic viability.
27. Public Reports of
Mineral Resources must specify one or more of the categories of "Inferred",
"Indicated" or "Measured". Reports must not contain Mineral Resource
figures combining two or more of the categories unless figures for the individual
categories are also provided. A Mineral Resource must not be reported in terms of
contained mineral content unless corresponding tonnage and grade figures are also
presented.
Table 1 provides, in a summary form, a
list of the main criteria which should be considered when preparing reports on exploration
results, Mineral Resources and Mineral Reserves. These criteria need not be discussed in a
Public Report unless they materially affect estimation or classification of the Mineral
Resources and Mineral Reserves.
It is not necessary, when publicly
reporting, to comment on each item in Table 1, but it is essential to discuss any matters
which might materially affect the reader’s understanding or interpretation of the
results or estimates being reported. This is particularly important where inadequate or
uncertain data affect the reliability of, or confidence in, a statement of exploration
results or an estimate of Mineral Resources and/or Mineral Reserves, for example poor
sample recovery, poor repeatability of assay or laboratory results, limited information on
tonnage factors etc.
28. The words
"ore" and "reserves" must not be used in stating Mineral Resource
estimates as the terms imply technical feasibility and economic viability and are only
appropriate when all relevant modifying factors have been considered. Reports and
statements should continue to refer to the appropriate category or categories of Mineral
Resources until technical feasibility and economic viability have been established. If
re-evaluation indicates that the Mineral Reserves are no longer viable, the Mineral
Reserves must be reclassified as Mineral Resources and removed from the Reserve statements
altogether.
It is not intended that
re-classification from Mineral Reserves to Mineral Resources or vice-versa should be
applied as a result of changes expected to be of a short term or temporary nature, or
where company management has made a deliberate decision to temporarily operate on a
sub-economic basis. Examples of such situations might be a commodity price drop expected
to be of short duration, mine emergency of a non-permanent nature, transport strike etc.
Reporting of Mineral
Reserves
29. A "Mineral
Reserve" is the economically mineable material derived from a Measured and/or
Indicated Mineral Resource. It is inclusive of diluting materials and allows for losses
which 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 justifiable. Mineral Reserves are sub-divided
in order of increasing confidence into Probable Mineral Reserves and Proved Mineral
Reserves.
Mineral Reserves are those portions of
Mineral Resources which, after the application of all mining factors, result in an
estimated tonnage and grade which, in the opinion of the Competent Person making the
estimates, can be the basis of a viable project after taking account of all relevant
modifying factors. Mineral Reserves are reported as inclusive of marginally economic
material and diluting material delivered to the treatment plant or dispatched from the
mine without treatment
The evaluation techniques used
(including, where relevant, the block sizes) and the key assumptions made in arriving at
the estimate must be disclosed.
The term "economic" implies
that extraction of the Mineral Reserve has been established or analytically demonstrated
to be viable and justifiable under reasonable investment assumptions. The term
"Mineral Reserve" need not necessarily signify that extraction facilities are in
place or operative nor that all governmental approvals have been received. It does signify
that there are reasonable expectations of such approvals.
In reporting Mineral Reserves,
information on estimated metallurgical recovery factors is very important, and must always
be included in public statements.
If there is doubt about what should be
reported, it is better to err on the side of providing too much information rather than
too little.
Mineral Resource or Mineral Reserve
estimates are sometimes reported after adjustment by cutting of high grades, the
application of factors such as mine or mill "call factors" and similar modifying
factors. If any of the data are materially adjusted or modified for the purpose of making
the estimate, this must be clearly stated in a public Mineral Resource or Mineral Reserve
report and the nature of the adjustment or modification described.
It should be noted that the Code does
not imply that an economic operation must have Proved Mineral Reserves. Situations arise
where Probable Mineral Reserves alone may be sufficient to justify extraction, as for
example with some alluvial tin or gold deposits. This is a matter for judgement by the
Competent Person and company management.
Where companies prefer to use the term
"Ore Reserves" in their Public Reports, they must state clearly that this is
being used with the same meaning of "Mineral Reserves", as defined in this Code.
30. A "Probable
Mineral Reserve" is the economically mineable material derived from a Measured and/or
Indicated 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 which 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.
31. A "Proved
Mineral Reserve" is 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 which 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.
32. The choice of the
appropriate category of Mineral Reserve is determined primarily by the relevant level of
confidence and must be made by the Competent Person.
The Code provides for a direct
relationship between the criteria applied to Indicated Mineral Resources and Probable
Mineral Reserves and between the criteria applied to Measured Mineral Resources and Proved
Mineral Reserves. In other words, the level of geoscientific confidence for Probable
Mineral Reserves is similar to that required for the determination of Indicated Mineral
Resources and for Proved Mineral Reserves is similar to that required for the
determination of Measured Mineral Resources. Inferred Mineral Resources are always
additional to Mineral Reserves.
The Code also provides for a two-way
relationship between Measured Mineral Resources and Probable Mineral Reserves. This is to
cover the situation where uncertainties associated with any of the modifying factors
considered when converting Resources to Reserves may result in there being a lower degree
of confidence in the Mineral Reserves than in the corresponding Mineral Resources. Such
a conversion would not imply a reduction in the level of geological knowledge or
confidence.
If the uncertainties in the modifying
factors that prevented the Measured Mineral Resource being converted to a Proved Mineral
Reserve are removed, then the Measured Mineral Resource may be converted to a Proved
Mineral Reserve. However, modification is only acceptable to an equivalent or lower level
of confidence. No amount of confidence in the modifying factors for conversion of a
Mineral Resource into a Mineral Reserve can override the upper level of confidence which
exists in the Mineral Resource. Under no circumstances can an Indicated Mineral Resource
be converted to a Proved Mineral Reserve.
Application of the category of Proved
Mineral Reserves implies the highest degree of confidence in the estimate with consequent
expectations in the minds of the readers of the report. These expectations must be borne
in mind when categorising a Mineral Resource as Measured.
Refer also to guidelines in Clause 26
regarding classification of Mineral Resources.
33. Mineral Reserve
estimates are not precise calculations, and tonnage and grade figures in reports must be
expressed so as to convey the order of accuracy of the estimates by rounding off to
appropriately significant figures.
Rounding off must convey properly the
uncertainties in estimation.
In order to emphasise the imprecise
nature of a Mineral Resource or Mineral Reserve estimate, it is recommended that the final
results always be referred to as an estimate not a calculation.
34. Mineral Reserves
reports must specify one or other of the categories of "Proved" and
"Probable". Reports must not contain combined Proved and Probable Mineral
Reserve figures unless figures for each of the categories are also provided. Reports must
not present mineral content figures unless corresponding tonnage and grade figures are
also presented.
Table 1 provides, in a summary form, a
list of the main criteria which should be considered when preparing reports on exploration
results, Mineral Resources and Mineral Reserves. These criteria need not be discussed in a
Public Report unless they materially affect estimation or classification of the Mineral
Resources and Mineral Reserves.
Mineral Reserves may incorporate
material (dilution) which is not part of the original Mineral Resource. It is essential
that this fundamental difference between Mineral Resources and Mineral Reserves is borne
in mind and caution exercised if attempting to draw conclusions from a comparison of the
two.
Public reporting of tonnage and grade
outside the categories as covered by the Code is not permitted under the Code. These may
be useful estimates for a company in its internal calculations and evaluation processes,
but their inclusion in Public Reports would cause confusion.
When revised Mineral Reserve and
Mineral Resource statements are publicly reported they must be accompanied by a
reconciliation with previous statements. A detailed account of differences between the
figures is not essential, but sufficient comment should be made to enable significant
variances to be understood by the reader.
35. In situations where
figures for both Mineral Resources and Mineral Reserves are reported, a clarifying
statement must be included in the report which clearly indicates whether the Mineral
Resources are inclusive of, or additional to those Resources which have been modified to
produce Mineral Reserves.
There are reasons for, in some
situations, reporting Mineral Resources inclusive of Mineral Reserves and, in other
situations, reporting Mineral Resources additional to Mineral Reserves. Reporting
companies have to make it clear which form of reporting have adopted. Appropriate forms of
clarifying statements may be:
"The Measured and Indicated
Mineral Resources are inclusive of those Mineral Resources modified to produce the Mineral
Reserves."
Or
"The Measured and Indicated
Mineral Resources are additional to Mineral Reserves."
In the former case, if any Mineral
Resources have not been modified to produce Mineral Reserves for economic or other
reasons, the relevant details of these unmodified Mineral Resources must be
included in the report. This is to assist the reader of the report in making a judgement
of the likelihood of the unmodified Measured and Indicated Mineral Resources eventually
being converted to Mineral Reserves.
For reasons stated in the first
guideline of paragraph 31 and in this paragraph, the reported Mineral Reserve figures
cannot be added to the reported Mineral Resource figures. The resulting total is
misleading and is capable of being misunderstood or, more seriously, of being misused to
give a false impression of a company’s prospects.
36. Table 1 provides, in
a summary form, a list of the main criteria which should be considered when preparing
reports on exploration results, Mineral Resources and Mineral Reserves. These criteria
need not be discussed in a Public Report unless they materially affect estimation or
classification of the Mineral Resources and Mineral Reserves. However, changes in economic
or political factors alone may be the basis for significant changes in Mineral Reserves
and should be reported accordingly.
See guidelines to Clause 27 regarding
references to Table 1.
Reporting of
Mineralised Stope Fill, Stockpiles, Remnants,
Pillars, Low Grade Mineralisation
and Tailings
37. The Code applies to
the reporting of all potentially economic mineralised material including mineralised stope
fill, stockpiles, remnants, pillars, low grade mineralisation and tailings where there are
reasonable prospects for eventual economic extraction. Unless otherwise stated, Clause 1
to 36 of this Code (including Figure 1 and Table 1) apply.
The opinion of a mining engineer or
relevant professional should be sought when making judgements about the mineability of
fill, remnants and pillars.
If there are not reasonable prospects
for the economic extraction of a particular portion of the fill or stockpile, then this
material cannot be classified as either Mineral Resources or Mineral Reserves.
If some portion is currently
sub-economic but there is a reasonable expectation that it will become economic, then this
material may be classified as a Mineral Resource. Such stockpile material may include old
dumps and tailings. If technical and economic studies have demonstrated that economic
extraction could reasonably be justified under realistically assumed conditions, then the
material may be classified as a Mineral Reserve.
The above guidelines apply equally to
low grade mineralisation, often intended for stockpiling and treatment towards the end of
mine life. For clarity of understanding, the tonnage and grade estimates of such material
must be itemised separately in Public Peports, although, in addition, they may be
aggregated with total Mineral Resource and Mineral Reserve figures.
Stockpiles are defined to include both
surface and underground stockpiles, including broken ore in stopes, and can include ore
currently in the ore storage system. Mineralised material in the course of being processed
(including leaching), if reported, must be reported separately.
Mineralised remnants, shaft pillars
and mining pillars which are potentially mineable must be included in the Code definitions
of Mineral Resources and Mineral Reserves.
Mineralised remnants, shaft pillars
and mining pillars which are not potentially mineable must not be included in Mineral
Resource and Mineral Reserve statements.
TABLE 1
LIST OF ASSESSMENT AND
REPORTING CRITERIA
Table 1 is a check list and guideline
which those preparing reports on exploration results Mineral Resources and Mineral
Reserves should use as a reference. The check list is not prescriptive and, as always,
relevance and materiality are overriding principles that determine what information should
be publicly reported. It is, however, important to report any matters that might
materially affect a reader’s understanding or interpretation of the results or
estimates being reported. This is particularly important where inadequate or uncertain
data affect the reliability of, or confidence in, a statement of exploration results or an
estimate of Mineral Resources and/or Mineral Reserves.
The order and grouping of criteria in
Table 1 reflects the normal systematic approach to exploration and evaluation. Criteria in
the first group ‘Sampling Techniques and Data’ apply to all succeeding groups.
In the remainder of the table, criteria listed in preceding groups would often apply to
succeeding groups and should be considered when estimating and reporting.
CRITERIA |
EXPLANATION |
|
SAMPLING
TECHNIQUES AND DATA
(criteria in this group apply to all succeeding groups)
|
| Drilling
techniques. |
Drill type
(eg. core, reverse circulation, etc.) and details (eg. core diameter). Measures taken to
maximise sample recovery and ensure representative nature of the samples. |
| Logging. |
Whether
samples have been logged to a level of detail to support appropriate Mineral Resource
estimation, mining studies and metallurgical studies. Whether logging is qualitative or
quantitative in nature. Core (or trench, channel etc.) photography. |
| Drill
sample recovery. |
Whether
sample recoveries have been properly recorded and results assessed. In particular whether
a relationship exists between sample recovery, grade and sample bias (eg. preferential
loss/gain of fine/coarse material). |
| Other
sampling techniques. |
Nature and
quality of sampling (eg. cut channels, random chips etc.) and measures taken to ensure
sample representivity. |
| Sub-sampling
techniques and sample preparation. |
If core,
whether cut or sawn and whether quarter, half or all core taken. If non-core, whether
riffled, tube sampled, rotary split etc. and whether sampled wet or dry. For all sample
types, the nature, quality and appropriateness of the sample preparation technique.
Quality control procedures adopted for all sub-sampling stages to maximise representivity
of samples. Measures taken to ensure that the sampling is representative of the in situ
material collected. Whether sample sizes are appropriate to the grainsize of the material
being sampled. |
| Quality
of assay data and laboratory tests. |
The nature,
quality and appropriateness of the assaying and laboratory procedures used and whether the
technique is considered partial or total. Nature of quality control procedures adopted
(eg. standards, blanks, duplicates, external laboratory checks) and whether acceptable
levels of accuracy (ie. lack of bias) and precision have been established |
| Verification
of results. |
The
verification of selected intersections by either independent or alternative personnel. The
use of twinned holes, deflections or duplicate samples. |
| Data
location. |
Accuracy and
quality of surveys used to locate drill holes (collar and down-hole surveys), trenches,
mine workings and other locations used in Mineral Resource estimation. Quality and
adequacy of topographic control. |
| Data
density and distribution. |
Data density
for reporting of exploration results. Whether the data density and distribution is
sufficient to establish the degree of geological and grade continuity appropriate for the
Mineral Resource and Mineral Reserve estimation procedure and classifications
applied. Whether sample compositing has been applied. |
| Audits
or reviews. |
The results
of any audits or reviews of sampling techniques and data. |
|
REPORTING OF
EXPLORATION RESULTS
(criteria listed in the preceding group apply also to this group)
|
| Mineral rights and land ownership. |
Type,
reference name/number, location and ownership including agreements or material issues with
third parties such as joint ventures, partnerships, historical sites, wilderness or
national park and environmental settings. In particular the security of the tenure held at
the time of reporting along with any known impediments to obtaining a license to operate
in the area. |
| Exploration work done by other parties. |
Acknowledgment
and appraisal of exploration by other parties. |
| Geology. |
Description
of the nature, detail, and reliability of geological information (rock types, structure,
alterations, mineralisations, and relation to known mineralized zones, etc.). Description
of geophysical and geochemical data. Reliable geological maps and cross sections should
exist to support interpretations. |
| Data compositing (aggregation) methods. |
In
reporting exploration results, weighting averaging techniques, maximum and/or minimum
grade truncations (eg. cutting of high grades) and cut-off grades are usually material and
should be stated. Where composite intercepts incorporate short lengths of high grade
results and longer lengths of low grade results, the procedure used for such compositing
should be stated and some typical examples of such composites should be shown in detail.
The assumptions used for any reporting of metal equivalent values should be clearly
stated. |
| Relationship between mineralisation widths and
intercept lengths. |
These
relationships are particularly important in the reporting of exploration results. If the
geometry of the mineralisation with respect to the drill hole angle is known, its nature
should be reported. If it is not known and only the down-hole lengths are reported, there
should be a clear statement to this effect (eg. ‘downhole length, true width not
known’). |
| Diagrams. |
Where
possible, maps, plans and sections (with scales) and tabulations of intercepts should be
included for any material discovery being reported if such diagrams significantly clarify
the report. |
| Balanced reporting. |
Where
comprehensive reporting of all exploration results is not practicable, representative
reporting of both low and high grades and/or widths should be practiced to avoid
misleading reporting of exploration results. |
| Other substantive exploration data. |
Other
exploration data, if meaningful and material, should be reported including (but not
limited to): geological observations; geophysical survey results; geochemical survey
results; bulk samples - size and method of treatment; metallurgical test results; bulk
density, groundwater, geotechnical and rock characteristics; potential deleterious or
contaminating substances. |
| Further work. |
The
nature and scale of planned further exploration work (eg. tests for lateral extensions,
depth extensions, infill drilling). |
ESTIMATION
AND REPORTING OF MINERAL RESOURCES
(criteria listed in the first group, and where relevant in the second group,
apply also to this group) |
| Database
integrity. |
Measures
taken to ensure that data has not been corrupted by, for example, transcription or keying
errors, between its initial collection and its use for Mineral Resource estimation
purposes. Data validation procedures used. |
| Geological
interpretation. |
Description
of geological model and inferences made from this model. Discussion of sufficiency of data
density to assure continuity of mineralization and provide an adequate data base for the
estimation procedure used. |
| Estimation
and modelling techniques. |
The nature
and appropriateness of the estimation techniques applied and key assumptions, including
treatment of extreme grade values, domaining, interpolation parameters, maximum distance
of extrapolation from data points. The availability of check estimates, previous estimates
and/or mine production records and whether the Mineral Resource estimate takes appropriate
account of such data. The assumptions made regarding recovery of by-products. In the case
of block model interpolation, the block size in relation to the average sample spacing and
the search employed. Any assumptions behind modelling of selective mining units (eg.
non-linear kriging). The process of validation, the checking process used, the comparison
of model data to drillhole data, and use of reconciliation data if available. Detailed
description of the method used and the assumptions made to estimate tonnages and grades
(section, polygon, inverse distance, geostatistical, or other method). Description of how
the geological interpretation was used to control the resource estimates. Discussion of
basis for using or not using grade cutting or capping. If a computer method was chosen,
description of programs and parameters used. Geostatistical methods are extremely varied
and should be described in detail. The method chosen should be justified. The
geostatistical parameters, including the variogram, and their compatibility with the
geological interpretation should be discussed. Experience gained in applying geostatistics
to similar deposits should be taken into account. |
| Cut-off
grades or parameters. |
The basis of
the cut-off grades or quality parameters applied, including the basis, if appropriate, of
equivalent metal formulae. |
| Mining
factors or assumptions. |
Assumptions
made regarding possible mining methods, minimum mining dimensions and internal (or, if
applicable, external) mining dilution. It may not always be possible to make assumptions
regarding mining methods and parameters when estimating Mineral Resources. Where no
assumptions have been made, this should be stated. |
| Metallurgical
factors or assumptions. |
The basis
for assumptions or predictions regarding metallurgical amenability. It may not always be
possible to make assumptions regarding metallurgical treatment processes and parameters
when reporting Mineral Resources. Where no assumptions have been made, this should be
reported. |
| Tonnage
factors (in situ bulk densities). |
Whether
assumed or determined. If assumed, the basis for the assumptions. If determined, the
method used, the frequency of the measurements, the nature, size and representativeness of
the samples. |
| Classification. |
The basis
for the classification of the Mineral Resources into varying confidence categories.
Whether appropriate account has been taken of all relevant factors. I.e. relative
confidence in tonnage/grade computations, confidence in continuity of geology and metal
values, quality, quantity and distribution of the data. Whether the result appropriately
reflects the Competent Person’ s view of the deposit. |
| Audits
or reviews. |
The results
of any audits or reviews of Mineral Resource estimates. |
ESTIMATION
AND REPORTING OF MINERAL RESERVES
(criteria listed in the first group, and where relevant in other preceding
groups, apply also to this group) |
| Mineral
Resource estimate for conversion to Mineral Reserves. |
Description
of the Mineral Resource estimate used as a basis for the conversion to a Mineral Reserve.
Clear statement as to whether the Mineral Resources are reported additional to, or
inclusive of, the Mineral Reserves. |
| Cut-off
grades or parameters. |
The basis of
the cut-off grades or quality parameters applied, including the basis, if appropriate, of
equivalent metal formulae. The cut-off grade parameter may be economic value per block
rather than grade. |
| Mining
factors or assumptions. |
The method
and assumptions used to convert the Mineral Resource to Mineral Reserve (ie either by
application of appropriate factors by optimisation or by preliminary or detailed design).
The choice of, the nature and the appropriateness of the selected mining methods and other
mining parameters including associated design issues such as pre-strip, access, etc. The
assumptions made regarding geotechnical parameters (eg. pit slopes, stope sizes, etc.),
grade control and pre-production drilling. The major assumptions made and Mineral Resource
model used for pit optimisation (if appropriate). The mining dilution factors, mining
recovery factors, and minimum mining widths used and the infrastructure requirements of
the selected mining methods. |
| Metallurgical
factors or assumptions. |
The
metallurgical process proposed and the appropriateness of that process to the style of
mineralisation. Whether the metallurgical process is well-tested technology or novel in
nature. The nature, amount and representativeness of metallurgical testwork undertaken and
the metallurgical recovery factors assumed. Any assumptions or allowances made for deleterious
elements. The existence of any bulk sample or pilot scale testwork and the degree to which
such samples are representative of the orebody as a whole.
The tonnages and grades reported for
Mineral Reserves must state clearly whether these are in respect of material to the plant
or after recovery. |
| Cost
and revenue factors. |
The
derivation of, or assumptions made, regarding projected capital an d operating costs. The assumptions made regarding
revenue including head grade, metal or commodity prices exchange rates, transportation and
treatment charges, penalties, etc.. The allowances made for royalties payable, both
Government and private. |
| Market
assessment. |
The demand,
supply and stock situation for the particular commodity, consumption trends and factors
likely to affect supply and demand into the future. A customer and competitor analysis
along with the identification of likely market windows for the product. Price and volume
forecasts and the basis for these forecasts. |
| Others. |
The effect,
if any, of natural risk, infrastructure, environmental, legal, marketing, social or
governmental factors on the likely viability of a project and/or on the estimation and
classification of the Mineral Reserves. The status of titles and approvals critical to the
viability of the project, such as mining leases, discharge permits, government and
statutory approvals. |
| Classification. |
The basis
for the classification of the Mineral Reserves into varying confidence categories. Whether
the result appropriately reflects the Competent Person’s view of the deposit. The
proportion of Probable Mineral Reserves which have been derived from Measured Mineral
Resources (if any). |
| Audits
or reviews. |
The results
of any audits or reviews of Mineral Reserve estimates. |
