Reporting Metal Equivalents and Industrial Mineral Exploration Results, Resources and Reserves
The AIG Complaints Committee has recently dealt with several complaints relating to reporting in compliance with the JORC Code (2012). These have related to the use of metal equivalents and industrial mineral resources. The complaints raised suggest that these are aspects of public reporting in compliance with the JORC Code (2012) that are not completely understood by some Competent Persons.
The use of metal equivalents is, without doubt, convenient when reporting resources for polymetallic deposits, where the value of the principal mineral of economic interest is supplemented by other, less abundant or less valuable components. Reporting of metal equivalents is covered by Clause 50 of the JORC Code (2012). Clause 50 sets out minimum conditions for metal equivalent reporting that include:
- Reporting of individual grades for all metals included in the equivalence calculation.
- Assumed commodity prices for all components (prices must be stated explicitly – it is not acceptable to refer to “prevailing spot prices”, company “long-term planning prices”, “broker consensus prices” or similar concepts. Some latitude is provided in Clause 50 for price information that is considered to be commercially sensitive, where companies are able to provide sufficient information for investors to understand the methodology used to determine the prices used.
- Assumed metallurgical recoveries for all components, with a clear explanation of how the recoveries used were determined (e.g. metallurgical test results, detailed mineralogy, performance of similar deposits etc.).
- A clear statement that the company believes that all components contributing to the metal equivalence value used have potential to be recovered and sold.
- The metal equivalence calculation formula used.
The subject of the equivalence calculation should be the metal that contributes most value to the result. If not, an explanation of why another metal has been used must be provided.
A metal equivalent cannot be reported if meaningful metallurgical recovery information is not available.
Note that metallurgical recoveries, alone, present a simplistic view of mineral value. Polymetallic mineralisation frequently contain components that detract from mineralisation value. In addition, smelter contracts rarely provide payment for the full value of minor components, with smelters and refiners frequently retaining part, if not all of their value. The proportion of value returned to producers also depends on the grade of the minor component in question. Best practice should dictate reporting of metal equivalents used in statement of Ore Reserves taking these factors into account and which should be available for projects at that stage of development.
Reporting of in-situ or in-ground values for polymetallic mineralisation is explicitly discouraged by Clauses 28 and 51 of JORC (2012). Financial metrics for describing resources and reserves are onsidered to be inconsistent with the JORC Code’s underlying principles of transparency and materiality.
Reporting industrial minerals Exploration Results, Mineral Resources and Ore Reserves differs from reporting results for metalliferous deposits because their prospects for economic development are determined more by their quality and conformance with physical and chemical specifications, than their concentration. In essence, an industrial mineral is valued, sold and utilised in mineral form, rather than refined to produce a metallic component for sale. Industrial minerals include, for example, talc, limestone, gypsum. It also includes minerals like graphite, which may be used industrially because of their carbon content, but physical factors such as flake yield and size are the principal determinants of value.
Reporting of industrial minerals is covered by Clause 49 of the JORC Code (2012).
Assays are not always relevant in industrial mineral evaluation and reporting, where reporting of physical properties and compliance with established product specifications is more important in assessing prospects for eventual economic extraction. This frequently requires more work to determine than mineral abundance, and may prevent reporting of Mineral Resources until this work has been completed. A Mineral Resource must have reasonable prospects for eventual economic extraction, which need to be stated by Competent Persons in compliance with the JORC Code’s underlying principles of transparency and materiality.
Competence is a fundamental concept in public reporting in compliance with the JORC Code, set out in Clause 4 of JORC (2012). Clause 11 of the code states that “a Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking”,
What constitutes relevant experience is critical in determining competence. This can be a difficult area in which exercise of professional judgement is required.
It can be useful to ask the question “would I be considered competent by a panel of my peers?” This, essentially, may be how competence is determined should it be questioned in a professional practice complaint. AIG members are able to discuss competence, without prejudice, with the Complaints Committee should advice be required.
Chair, Complaints Committee
At the AIG strategy meeting, held in Sydney at the beginning of July, Council resolved to produce summaries of the initiatives and issues discussed and examined by Council at each meeting, to better inform members of developments affecting AIG and the Institute’s direction. The aim of this is to improve transparency and, importantly, both member engagement and feedback.
Council has changed the way in which it works:
- Meeting frequency has been increased to six-weekly, from a meeting every two months.
- Routine matters are now deal with by concise, written reports, which flag issues and decisions requiring Council’s attention and decisions.
This creates greater opportunities for considering strategic issues, AIG’s direction and value proposition for members.
Key Issues from the August Council Meeting
- We welcome 36 new members. An additional four Graduate members (GAIG) transferred to Member (MAIG).
- AIG is in a strong financial position, able to support new initiatives.
Several proposals were accepted by Council.
- We are establishing a jobs board where prospective employers can promote full-time, part-time, casual and contract opportunities for geoscientists at no cost, across the full spectrum of geosciences in Australia.
- A consultants and contractors directory is being established where AIG members can flexibly promote their skills and services. The directory will be searchable and actively promoted by AIG.
AIG Chief Executive Officer
Consideration is being given to enagement of a Chief Executive Officer to provide a resource able to act as a spokesperson for the institute and manage major initiatives. Historically, AIG has relied almost entirely on hard work by a small core of volunteers. Some years ago, we moved to sourcing back-office support (membership database, accounts, clerical and publications support) from several third-party, contract providers. An important part of the CEO’s role is perceived to be promotion of AIG’s role and work within the broader Australian scientific and business community, and to the public more generally. The role is proposed to be part-time at first and necessary to underpin the next phase of AIG’s development and growth.
Distinguished Lecturer Programme
Consideration is being given to implementing an AIG Distinguished Lecturer Programme. This would see a prominent, Australian geoscientist deliver lectures of particular relevance and interest to members and guests throughout Australia. A Council sub-committee has been formed to develop a proposal and report back to the next Council meeting in early October.
Education and Continued Professional Development
AusIMM is about to launch an on-line, structured training program for public reporting in compliance with the JORC Code. AIG was asked to exclusively recommend this course to members. This request was respectfully declined. Council agreed to promote the AusIMM course to members, but at the same time, seek and support the development of other training options for the benefit of members, recognising that there are a number of providers already delivering a range of excellent offerings in relation to application of the JORC Code. The plan is to develop a range of professional development resources, from short, very specific, targeted modules that may only take an hour to complete, to full day workshops, all of which will be made accessible by members everywhere. JORC will be an initial focus, but the plan is to extend the initiative to other aspects of professional geoscientific practice rapidly. Expressions of interest from members are very welcome.
Council will meet next 3 October 2018. Submissions and reports for consideration at that meeting are required by 12 September from all committees and working groups please.
Feedback is always welcome, direct to Councillors (contact details are in each issue of AIG News – the next issue will be published early in September) or via the AIG Linkedin Group.
Rebecca Whittle, a Year 11 student from Abbotsleigh high school in Sydney, has won a gold medal at the International Earth Science Olympiad in Thailand, securing Australia’s best gold medal performance at the UNESCO-sanctioned International Science Olympiads since 2009.
Rebecca competed against more than 140 students from 38 countries to win gold, finishing in the top 10 per cent of Earth Science students in the world.
Her medal is the second gold for Australia at this year’s International Science Olympiads, following a gold-medal performance by Sydney Grammar School student Hugo McCahon-Boersma at the International Physics Olympiad in July.
“This double gold achievement is our best performance at the International Science Olympiads since 2009. Our teams have put in the hard yards and earned this success,” says Ruth Carr, Executive Director of Australian Science Innovations.
Rebecca was part of a four-member team representing Australia at the International Earth Science Olympiad. The three other students won silver medals, putting them in the top 20 per cent of students and delivering Australia’s best overall performance at the competition since Australia began sending a national team in 2015.
The International Earth Science Olympiad competition involved two theory exams and four practical tests covering all aspects of Earth systems science and planetary astronomy. Topics included the geology of planetary bodies, the formation of rocks, rock and mineral identification, sea-level rise processes and the geochemistry of groundwater.
Rose Zhang from Narrabundah College in Canberra was also part of a team awarded a silver medal in the International Team Field Investigation that she completed with students from other countries. This part of the competition emphasises international collaboration and teamwork.
“We are very proud of our teams’ achievements this year that are a testament to their hard work and the Australian Science Olympiads program’s ability to nurture Australia’s top science students’ passion and talent for science,” says Carr.
The Australian students spent a year in exams and intensive training before competing on the international stage. They outperformed 6,000 other students from more than 280 schools in the qualifying exams, making a shortlist of 91 t to attend a two-week summer school at the Australian National University in preparation for the International Science Olympiad competitions.
The Australian Science Olympiad program is run by Australian Science Innovations and is funded through the Australian Government’s National Innovation and Science Agenda, with support from the Australian National University.
The Australian team results at the 2018 International Science Olympiads are as follows:
Learn more about the Australian Science Olympiad Competition at: www.asi.edu.au
International Earth Science Olympiad
8-17 August, Kanchanaburi, Thailand
|Wayne Wong||James Ruse Agricultural High School||NSW||Silver|
|Rose Zhang||Narrabundah College||ACT||Silver|
|Kim Zheng||James Ruse Agricultural High School||NSW||Silver|
Congratulations to all members of the Australian team for their great achievements.
Collection of data for the Fraser Institute’s 22nd annual survey of mining companies will begin next week and continue until Friday October 26th.
The data collected will allow the survey team to identify those provinces, states, and countries that pose the greatest barriers to investment in the mining sector, as well as the reasons underlying any significant shifts in the jurisdictional rankings from a year ago.
The report on the findings of last year’s survey, Survey of Mining Companies 2017, can be downloaded here.
AIG members are encouraged to contribute. Greater participation will help to ensure that the results reflect the views of professionals with first-hand knowledge of the mining investment climate in countries around the globe. Broad involvement in the survey will also increase the number of jurisdictions evaluated, thereby providing more governments with candid and anonymous opinions on their mining policies.
The survey can be completed in less than 15 minutes. All information collected through the survey remains confidential.
Executives, managers, and other experts with mining exploration and development companies, and their advisors, are asked to complete the 2018 survey questionnaire with respect to jurisdictions about which they are knowledgeable.
To participate in the survey, please contact Ashley Stedman, Senior Policy Analyst, Fraser Institute, Vancouver.
Australian citizens; or permanent residents of Australia; or New Zealand citizens may apply
Expressions of interest by Friday, 31st August 2018
The National Centre for Groundwater Research and Training (NCGRT) is seeking Expressions of Interest from the brightest minds from a wide range of science, engineering and social science disciplines to undertake a variety of groundwater PhDs across the country. NCGRT headquartered at Flinders University has 13 University partners who are in the top echelons of university rankings for water resources in the world. The PhD research positions offer a once in a lifetime opportunity to learn and work alongside some of the worlds most revered groundwater scholars and renowned influential thinkers. Candidates will conduct innovative research addressing the most pressing contemporary issues in groundwater science, management and policy.
All prospective PhD applicants who are approved for candidature must meet the eligibility requirements to apply for an RTP scholarship, or an equivalent at their nominated home university. Generous top-up scholarships may be available for suitable projects/students and will be negotiated with successful RTP scholarship recipients.
Research areas of interest: Hydrodynamics and Modelling of Groundwater Systems, Surface water –Groundwater Interactions, Groundwater-Vegetation- Groundwater Dependent Ecosystems, Geochemistry, Integrating Socioeconomics and Decision Support, Characterisation of Aquifers and Aquitards etc.
Applicants are required to fill out this EOI form along with a covering letter, academic transcript sand CV to assist us in matching you to your preferred area of interest and state location / University. Applications to be sent to email@example.com by COB Friday 31st August 2018. Shortlist notification by COB Friday 28 September 2018.
Awards will normally only be available to those who:
- Are Australian citizens; or permanent residents of Australia; or New Zealand citizens;
- Have completed at least four years of tertiary education studies at a high level of achievement and have an appropriate Honours 1 (or equivalent) undergraduate degree;
- Are enrolling as full-time students (part-time awards are available in certain circumstances);
- Will commence or are continuing a Masters degree by research or a Doctorate by research;
- Have had their candidature accepted in the area in which they propose to undertake their studies.
This award will not be available to students who have held a Commonwealth Government-funded postgraduate research award previously unless it was terminated within three months of it being awarded.
Follow this link to find out more and apply.