A recent judgement in a case relating to a dispute between parties involved in a Western Australian iron ore project contained several important lessons for Competent Persons preparing statements of Exploration Results, Mineral Resource and Ore Reserve estimates. The judgement was handed down on 14th August, 2015 following hearings in the Federal Court of Australia during June 2015.
Technical reports tendered as evidence in the case were ruled to be inadmissible by the Judge hearing the case. Some of the shortcomings identified by the Judge have been addressed by the 2012 edition of the JORC Code(JORC 2012), largely through mandating the transparent and material assessment of all items included in Table 1 of the JORC Code and mandating the use of an “if not – why not” approach, which itself is an important means of ensuring transparency. The reporting of Exploration Potential has also been further clarified in JORC 2012.
Important lessons arising from the judgement for geoscientists acting as Competent Persons include:
- Any report presented to any company, publicly listed or private, has potential to be legally discoverable with the potential to be made public. The JORC Code, first and foremost, is a standard of best practice that AIG recommends members follow, rigorously, at all times.
- Maintenance of document control and versioning for announcements and reports of Exploration Results, Mineral Resources and Ore Reserves is critical:
- Where more than one person contributes to preparation of an announcement or report, all authors should be named, even through the responsibility for the document will rest with the nominated Competent Person(s);
- Reports issued in draft form should be clearly marked as drafts;
- All versions of a report should bear the date on which it was completed;
- Any updates to a report should bear a new version and date so that the chronology and process of preparing a report can be clearly and unambiguously established.
- Statements of Exploration Potential are forward-looking predictions of what a resource may become with exploration and evaluation, or a target that must be achieved for the explorer or developer of a project to consider it a viable future prospect. This differs markedly from Resource or Reserve estimates which are based on actual data. The guidelines for stating Exploration Potential in JORC 2012 need to be clearly followed. This includes clearly distinguishing Exploration Potential from Resources and Reserves, that extensive work is required to realise Exploration Potential and that statements of Exploration Potential are subject to considerable uncertainty.
- The work of others used in preparing report of Exploration Results, Mineral Resources and Ore Reserves must be reported in context. The assessed reliability of the data and the extent to which it was reviewed and relied upon in preparing any report must be transparently described.
It is worth noting that the situation regarding JORC compliance is currently somewhat different between Australia and New Zealand. New Zealand Petroleum and Minerals has taken the very significant step of requiring JORC 2012 compliance for all reports of Exploration Results, Mineral Resources and Ore Reserves by both companies and state owned corporations. This includes the requirement for reports to be prepared by a Competent Person. This effectively extends JORC compliance to all entities who hold prospecting, exploration and mining permits in New Zealand, not just publicly listed companies. AIG considers this an effective means of extending the benefits of JORC Code compliant reporting to New Zealand’s entire exploration and mining industry.
The AIG Complaints Committee reviewed the conduct of the Competent Person named in the documents relating to exploration results, resources and reserves and elected not to refer the matter to the Institute’s Ethics and Standards Committee. The Complaints Committee found no evidence of professional misconduct warranting further action.
Chairperson, Complaints Committee
21 November 2015