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7/31/2019 Miskelly Assignment PPT
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CONFIDENCE
CREDIBILITYCONSISTENCY
Chasing the investors dollar
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N.Miskelly
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The mining industry must:
Develop efficient means to obtain capitalProvide investors with transparent and
comprehensive information
To meet both these needs, an internationalreporting standard will have to be
utilised.
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Australia lead the way with the JORC Code
JORC introduced in 1989 and becomes themodel for other national Resource andReserves Codes
CRISCO (Committee for Mineral ReservesInternational Reporting Standards) play a
major role in code development.
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JORC stands for the Joint Ore ReservesCommittee
Established in 1971 after the Poseidon Boomand Bust
Made up of a volunteer committee andrepresentation by invitation from other
related bodies
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Misleading information on Nickel and Golddiscoveries
Share price jumps from a $0.80 to $280 withPoseidon Boom and Bust
Prices drop when mine cant produceInvestors lose moneyImage of mining shares taintedMining reporting standards changed
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Poseidon share price rise and fall
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Questionable reporting standards by GoldCoast-based company called Australian
Mining Investments (AMI)
25 million tonnes of copper mineralisationinstead of reported 59 million tonnes
Lack of transparency in report
Can damage investor confidence
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JORC is a volunteer committee of:The Australian Institute of Mining and
Metallurgy
Minerals Council of AustraliaAustralian Institute of Geoscientists
Representation by invitation from:Australian Stock Exchange (ASX)Securities Institute of AustraliaOthers deemed appropriate
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Sets minimum standards for public reporting (in Australiaand New Zealand) of Exploration Results, Mineral Resources
and Ore 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 bya Competent Person; describes the qualifications and typeof experience required to be a competent person
Provides extensive guidelines on the criteria to beconsidered when preparing reports on Exploration Results,
Mineral Resources and Ore Reserves
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Transparencyclear
unambiguouspresentation
Materiality
all reasonableinformationexpected
Competencebased on workby Competent
Person
JORCCode
Transparency i.e. the reader of a
public report is provided with
sufficient information that is
clear, unambiguous and
understandable
Materiality i.e. public reports
contain all relevant information
reasonably required and expected
by investors and professional
advisors to make balanced
judgements
Competence i.e. public reports
are based on work, which is the
responsibility of suitable
qualified and experienced
person(s)
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General relationship between Exploration Results,
Mineral Resources and Ore Reserves
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The Competent Person must have a
minimum of five years experience
which is relevant to the style ofmineralization and type of deposit
under consideration and to the activity
which that person is undertakingJORC Code clause 8
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Australia is home to 14% of the worldsexploration expenditure
US$2.5B is being spent in Australia and or byAustralian companies
Over US$25B in equity raised for mineralexploration since 2004
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Cumulative average abnormal Returns of Exploration announcement
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Cumulative average abnormal Returns of Resource announcement
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Confidence: For people to gain confidence theaccuracy of the technical report should be
compatible with the accuracy of its contents and
that the companies have the correct tools toproduce a confident report
Credibility: No more Poseidon or CuDeco affairs
Consistency: JORC Resource and Reserveclassification has so many variables and so few
hard benchmarks companies must take
ownership
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Quality estimates and reports in a style thatthe investor can translate
Good estimates and poor reporting willbring criticism and some lack of
credibility, whereas a good report based
on a poor estimate could mean thedownfall of the company
N Weatherstone
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With increasing competition for miningcompanies to woo investor dollars they mustprovide transparent resource and reservereporting in line with a Internationallyrecognised code to instil confidence andcreditability in the industry
Also if investors are looking for certainty in
their mining investments well this issomething no code can deliver they must dotheir homework like with every form ofstock.
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References
International Mineral Resource and Mineral Reserve Classification andReporting System ,2002, W.S. Vaughan
The JORC Code- A Bankers View, 2001 Q. Amos AIG JournalPractical Interpretation of Mineral Resource and Ore Reserve
Classification Guidelines, Vivienne Snowden, AusIMM Guide to Good
Practice
Progress on International Standards for Reporting of Mineral Resourcesand Reserves, 2003, Norman Miskelly, CRIRSCO
`International Standards for Reporting of Mineral Resources andReserves- Status, Outlook and Important Issues, N. Weatherstone,
CRIRSCO
A Clarification of the Reporting Obligations Under the JORC Code- ASX
ReportThe Market Response to Exploration, Resource and Reserve
Announcements by Mining Companies, 2010, Bird, Grosse, Yeung ,UTS
Review of Compliance with the JORC Code,2009, ASX Media release, M.Gibbs