The CRIRSCO Template, Mineral Resource Mineral Reserve Reporting and International Developments

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The CRIRSCO Template,Mineral Resource /
Mineral Reserve Reporting and International
Developments
Peter Stoker Principal Consultant AMC
Consultants Pty Ltd
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Introduction Disclaimer

• Peter Stoker is a Consulting Geologist with 40
  years experience. Peter is Chairman of the Joint
  Ore Reserves Committee (JORC) and was Secretary
  from 1999 to 2005. Peter is also a member of
  CRIRSCO.
• While Peter Stoker is Chairman of the
  Australasian Joint Ore Reserves Committee (JORC),
  the views presented are his own and should not be
  taken as necessarily representing those of the
  committee.

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Outline

• CRIRSCO Template - Principles Based Reporting
• Competent Persons and ROPOs
• Other Reporting systems
• International Developments
• Convergence, mapping and the future

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The CRIRSCO International Reporting Template
Prepared for the assistance of Countries wishing
to adopt CRIRSCO style Codes Used for dialogue
with international organisations such as SPE,
IASB, UN-ECE, etc., Does not deal with specific
National issues If involved in reporting
READTHE RELEVANT NATIONAL CODE !!!!
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The CRIRSCO International Reporting Template
Recently translated into Chinese by Chin
Communications for CRIRSCO to assist in
facilitating mutual recognition of reporting
systems.
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The CRIRSCO Template a Template for best
practice reporting - what it does

• Sets minimum standards for public reporting of
  Exploration Results, Mineral Resources and
  Mineral Reserves
• Provides a mandatory system for classification of
  tonnage/grade estimates according to geological
  confidence and technical/economic considerations
• Requires Public Reports to be based on work
  undertaken by a Competent Person describes the
  qualifications and type of experience required to
  be a Competent Person
• Provides extensive guidelines on the criteria to
  be considered when preparing reports on
  Exploration Results, Mineral Resources and
  Mineral Reserves.

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Relationship between Mineral Resources
and Mineral Reserves (Classification Figure 1)
Exploration Results
MINERAL RESERVES
MINERAL RESOURCES
Inferred
Increasing level of geological knowledge and
confidence
Probable
Indicated
Proved
Measured
Consideration of mining, metallurgical, economic,
marketing, legal, environmental, social and
governmental factors (the Modifying Factors").
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CRIRSCO style standards/Codes - Principles based
CRIRSCO style standards/Codes are principles
based not prescriptive Codes. The principles in
Clause 3, CRIRSCO Template are
Materiality all reasonable information expected
Transparency clear unambiguous presentation
CRIRSCO Template
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Competent Persons and ROPOs

• What is a Competent Person
• Am I a Competent Person
• Empowerment of the Competent Person
• The Code provides guidance for Competent Persons

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What is a Competent Person? (Clause 10)

• 10. A Competent Person is a person who is a
  Member or Fellow of a recognised professional
  body relevant to the activity being undertaken,
  and who is subject to enforceable Rules of
  Conduct.
• A Competent Person must have a minimum of five
  years experience 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 preparing a report on
  Exploration Results, the relevant experience must
  be in exploration. 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.

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Is there a register of Competent Persons?

• The Competent Person system is generally one of
  SELF DECLARATION
• There is no register of Competent Persons in
  Australia, Canada, South Africa or Western
  Europe.
• JORC has considered this issue many times and
  decided such a system would be exceptionally
  difficult to operate and practically unworkable
  in the Australian and New Zealand environment.
• This can be different in other jurisdictions, for
  instance in Chile and the Philippines, where
  registers of Competent Persons are maintained.

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Am I a Competent Person?

• So the questions for the individual are
• Do I belong to an appropriate professional
  organisation?
• (appropriate membership of the local recognised
  professional body or a ROPO)
• Do I have at least the required minimum relevant
  experience?
• (must 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)
• The key qualifier in the definition of a
  Competent Person is the word relevant.
• 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.
• Am I satisfied in that I could face my peers and
  demonstrate competence in the commodity, type of
  deposit and situation under consideration? If
  doubt exists, the person should either seek
  opinions from appropriately experienced
  colleagues or should decline to act as a
  Competent Person.

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Summary of Competent Person Issues

• Regulation of the estimator, not the estimation
• Requirement for membership of a self regulating
  professional body (Local professional
  organisation e.g. AusIMM or AIG in Australia or a
  ROPO, RFO etc.,) provides mechanism to make
  Competent Person accountable
• The CRIRSCO family of Codes and their
  implementation have created a climate which
  minimises the likelihood of abuse.

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Recognised Overseas Professional Organisations
(ROPOs)

• The aim of the system is to enhance the Competent
  Person provisions of the JORC Code and ASX
  Listing Rules by promoting and facilitating
  international reciprocity of Competent Persons.

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ROPOs (an Australian example) Recognised
Overseas Professional Organisations

• Earlier than 2004 the JORC Code required that
  Competent Persons must belong to AusIMM or AIG
• this was seen as being unduly restrictive
• The ASX, acting on the advice of JORC with
  approval of JORCs parent bodies, promulgates a
  list of ROPOs (currently 24) to which Competent
  Persons may belong (usually but not exclusively
  overseas)
• This list is referenced in the 2004 JORC Code,
  and available on the ASX website.
• Other systems
• NI 43-101 includes a list of RFAs as Appendix A
• SAMREC includes provisions for ROPOs as agreed by
  SSC
• PERC Exposure Draft includes provision for
  recognition of other professional institutions
  elsewhere of equivalent status.

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Recognised Overseas Professional Organisations
(ROPOs)

• A Recognised Overseas Professional Organisation
  (ROPO) must
• be a self-regulatory organisation covering
  professionals in the mining and/or exploration
  industry
• admit members primarily on the basis of their
  academic qualifications and experience
• require compliance with the professional
  standards of competence and ethics established by
  the organisation and
• have disciplinary powers, including the power to
  suspend or expel a member.

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Recognised Overseas Professional Organisations
(ROPOs)

• ROPOs must undertake to apply their ethical
  procedures and must report when requested
  (annually) by JORC.
• In 2004/5 four ROPOs were removed from the list
  for failure to supply the information, all four
  subsequently reapplied for re-admission after
  their members complained and are included in the
  current list.
• In 2006/7 one ROPO from South Africa reported it
  had taken action against a member reported for a
  breach of the JORC Code in a public report to the
  ASX.
• The ROPO convention facilitates international
  reciprocity of Competent Persons.

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Recognised Overseas Professional Organisations
(ROPOs)

• Canada has a similar (if less rigorous) system
• South Africa has implemented a ROPO system
• The SME in USA has set up a similar system
  (although of course the SME guide is not
  recognised by the USA SEC)
• And PERC (the Pan European Reporting Committee)
  have included provision for such a system in the
  current exposure draft of the revised PERC Code.

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Current list of ROPOshttp//www.asx.com.au/profes
sionals/pdf/ropo_letter_september_2007_standalone.
pdf

• Institute of Materials, Minerals and Mining
• Geological Society of London
• Institute of Geologists of Ireland
• European Geologist (EurGeol) members of the
  European Federation of Geologists
• Mining and Metallurgical Society of America
• American Institute of Professional Geologists
• SME Registered Member of the Society of Mining,
  Metallurgy and Exploration Inc.
• Engineering Council of South Africa
• South African Council for Natural Scientific
  Professions
• Geological Society of South Africa
• South African Institute of Mining and Metallurgy
• South African Council for Professional and
  Technical Surveyors
• Professional Engineers Ontario
• Association of Professional Engineers and
  Geoscientists of British Columbia
• Association of Professional Engineers and
  Geoscientists of Manitoba
• Association of Professional Geoscientists of
  Ontario
• Association of Professional Engineers and
  Geoscientists of Newfoundland
• Association of Professional Engineers, Geologists
  and Geophysicists of the Northwest Territories
• Association of Professional Geoscientists of Nova
  Scotia

UK and Europe
USA
South Africa
Canada
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National and International Reporting Standards

• JORC Code (Australasia) - 2004
• SAMREC Code (South Africa) - 2007 Updated Code
  issued
• The Reporting Code (UK/W Europe) 2003, Revised
  PERC Code in preparation
• Chilean Code (Chile) - issued 2004, implemented
  fully 2008.
• Peruvian Code (Peru) - issued 2004
• CIM Definition Standards 2005 (with NI 43 -101
  and best practices guidelines)
• Philippines PMRC - issued December 2007
• SME Guidelines (USA) - issued 2007 Not recognised
  by US SEC
• CRIRSCO International Reporting Template - issued
  2006
• Industry Guide 7 (USA - SEC) completely
  different style
• Russia - Classification of Reserves of Mineral
  Deposits and Prognostic Resources of Solid
  Minerals - 11 Dec 2006 (in force from 1 Jan 2008)
• China - Solid Mineral Reserve Classification 1999
  (being revised)
• UN-ECE Framework Classification 2004
  (International Governments)

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Comparison Between CRIRSCO style Codes, Industry
Guide 7 and UNFC Note mapping exercises in
progress or possible between CRIRSCO and Russian
and Chinese systems. From Developments in
International Mineral Resource and Reserve
Reporting, Stephenson Weatherstone,
International Mine Management 2006 Conference,
AusIMM 2006
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Comparison of UNFC with CRIRSCO-Style Reporting
Standards
Note however that Geoscience Australia use the
JORC Code for the National Inventory
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Situation in USA

• In USA, the philosophical equivalent to NI 43-101
  / CIM Definitions Standards is the SME Guide for
  Reporting Exploration Results, Mineral Resources
  and Mineral Reserves, 2007 edition (SME Guide)
  aimed to bridge the gap between the SEC and
  industry positions.
• However, public disclosure of exploration
  results, mineral resources and mineral reserves
  in the USA is regulated by the Division of
  Corporation Finance of the US Securities and
  Exchange Commission (SEC).
• SEC does not recognise the SME Guide or similar
  CRIRSCO-style reporting standards, instead
  requiring mining companies to comply with its
  Industry Guide 7

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Comparison of USA SEC with CRIRSCO-Style
Reporting Standards
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International Developments (CRIRSCO)

• Committee for Mineral Reserves International
  Reporting Standards (CRIRSCO) represents the
  national reporting organisations in Australia,
  Canada, South Africa, UK and Western Europe,
  United States and Chile.
• CRIRSCO now a taskforce of ICMM
• CRIRSCO IASB IASB extractive industries working
  group about to recommend CRIRSCO Template and SPE
  PRMS definitions for IFRS
• CRIRSCO SPE mapped minerals oil and gas
  definitions
• CRIRSCO UNECE attempting to map definitions
  with a potential revision of the UNFC being
  considered to ensure equivalence
• Russia and China Protocol and initial discussions

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Why so important? CRIRSCO and IASB

• CRIRSCO and the IASB Extractive Activities
  Project Team (EAPT) have been in close
  consultation for over three years seeking
  agreement on the definitions of Resources and
  Reserves the IASB may adopt in the new
  International Financial Reporting Standards.
• The IASB is hoping to adopt high level
  definitions that will encompass both Minerals and
  Oil and Gas, hence CRIRSCOs engagement with the
  SPE in mapping the two systems definitions.
• From this engagement with IASB and SPE it appears
  likely that the IASB will recommend adoption of
  the mapped CRIRSCO and SPE definitions.
• IASB - International Accounting Standards Board
• SPE Society of Petroleum Engineers
• UNFC - United Nations Framework Classification

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CRIRSCO and the Russian GKZ

• At a meeting in October between CRIRSCO and the
  GKZ a Protocol was signed agreeing on the way
  forward for 'harmonisation' of Russian CRIRSCO
  systems and the criteria for mutual recognition
  of Competent Persons.
• Included in the protocol are agreements that
• it is the intention of this Protocol that
  neither the Russian system nor the CRIRSCO system
  of reporting mineral resources and reserves is to
  be changed as the direct result of this Protocol.
  Any changes which may be made in either system
  are entirely at the discretion of the relevant
  organisation

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CRIRSCO and the Russian GKZ

• Protocol continued
• the purpose of this Protocol is to define an
  agreed method by which mineral resources and
  reserves, reported by companies in Russia
  according to the current Russian classification
  system, can be expressed in terms that are
  compliant with the CRIRSCO family of reporting
  codes in Russia and elsewhere
• as the next practical step a 'conversion
  handbook' of guidelines for competent persons, to
  be prepared and published jointly by CRIRSCO and
  GKZ before the end of 2009.

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Acknowledgements To my colleagues from JORC,
JORCs parent bodies and CRIRSCO for assistance
over time with preparation of much of the
material used today.
The assistance of the Ministry of Land and
Resources PRC to attend China Mining is
gratefully acknowledged.
Preparing this talk and travelling to China
Mining was supported by
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