The SAMREC Code and Uranium

Ken Lomberg

Chairman of the SAMREC Working Group

Senior Principal - Coffey

2009 EDITION

The SAMREC Code, sets out minimum standards,

recommendations and guidelines for Public

Reporting of Exploration Results, Mineral

Resources and Mineral Reserves in South

Africa.

Commonly used by:

• Stock exchanges

• Capital Raising

• Bank Transactions

• Public funding

• Mergers and Acquisitions

Pertinent Aspects of the SAMREC CODE

• A required minimum standard for the Public Reporting of

Exploration Results, Mineral Resources and Mineral Reserves

• Considered relevant to all solid minerals

• Guidelines

• Present information about mineral assets to

– investors and potential investors

– Advisors

– Satisfy regulatory requirements

• The principles that are applicable to the Code:

– Materiality

– Transparency

– Competency

Organisational Structure

SA

MR

EC

/SA

MV

AL

Com

mitte

e

JSE Securities Exchange Commission

Southern African Institute of Mining and

Metallurgy (SAIMM)

Geological Society of South Africa (GSSA)

The Law Society of the Northern Provinces

South African Council for Professional Land

Surveyors and Technical

Surveyors (PLATO)

Engineering Council of South Africa (ECSA)

South African Council of Natural Scientific

Professions (SACNASP)

SAMREC Working

Committee

SAMVAL Working

Committee

Committee for Mineral Reserves International

Reporting Standards (CRIRSCO)

Investment Analysts Society

United Nations Economic Commission for

Europe (UNECE)

Oil and Gas Working

Committee

Chamber of Mines

General Council of the Bar of SA

The Banking Association of South Africa

Council of Geoscience

Directorate of Mineral Economics/Minerals

Bureau

South African Institute of Chartered Accountants

(SAICA)

PERTINENT ASPECTS OF THE

SAMREC CODE

• Not prescriptive set of rules

• Vast jurisdiction

– Commodities,

– Mineralisation styles,

– Locations etc

• Data integrity

Table 1

• T1. GENERAL

• T2. PROJECT DATA

• T 3. SAMPLING

• T 4. INTERPRETATION/MODELLING

• T 5. TECHNO-ECONOMIC STUDY (INCLUDING MODIFYING

FACTORS)

• T 6. RISK ANALYSIS

• T 7. RESOURCE AND RESERVE CLASSIFICATION CRITERIA

• T 8. BALANCED REPORTING

• T 9. AUDITS AND REVIEWS

• T 10. OTHER CONSIDERATIONS

• T 11. QUALIFICATION OF COMPETENT PERSON(S) AND

OTHER KEY TECHNICAL STAFF. DATE AND SIGNATURE

PAGE

The Competent Person

Documentation detailing Exploration Results, Mineral

Resources and Mineral. Reserves from which a

Public Report is prepared must be prepared by, or

under the direction of, and signed by a Competent

Person.

A Competent Person must have a

minimum of five years’ experience

relevant to the style of mineralization

and type of deposit or class of deposit

under consideration and to the activity

he or she is undertaking.

Why SAMREC and why Relevant

• Family of Codes

• Same approach

• Identical definitions

• Conformity – investor confidence

• Compare Projects/Mines

South African Framework

Geological Model

Verified Database

Statistics

Block Model Development

Variography

Outlier Analysis

Compositing

Estimation & Classification

Mineral Resource Statement

Structural Plan

Block Model

Facies Definition Lithologica

l Model Mineralization Model

Mineral Resource Modelling

Mineral Reserve Modelling

Mineral Resource Block Model

Mine Design

Scheduling

Footwall & Hangingwall Determinati

on

Costing

Estimation & Classification

Mineral Reserve Statement

Dilution

Head Grade Tonnage

Feasibility Study

Geological, Facies & Structural Model

Classification Diagram

General Requirements

• The general guidelines of the Estimation of Mineral

Resources and Mineral Reserves apply to uranium

deposits.

• “Reasonable expectation of eventual economic

extraction”

Uranium is Unique

• The distinguishing aspect of uranium, and its associated

daughters, is radioactivity.

• This characteristic is highly beneficial in

– assay determination,

– grade control and

– ore sorting,

• Potentially negative aspects

– environmental,

– health and safety concerns.

• Tightly regulated activities

– exploration,

– development and mining

Requirements of the Competent Person

• the radioactive nature of uranium, thorium and

potassium minerals, and the characteristics of the

radioactive decay series, which result in various

uranium isotopes and other daughter products

• equipment and techniques used in acquiring

radiometric data, and with methods for Quality

Assurance (QA) and Quality Control (QC)

Understand

Disequilibrium

• An imbalance between the

uranium content and the

radioactivity emitted by a

given volume of mineralized

rock.

• This imbalance is caused by either differential mobilization of the more

soluble uranium from the deposition site, relative to its daughter isotopes, or

by a lack of time for the accumulation of the daughter isotopes to reach a

state of equilibrium after the uranium has been deposited.

• Generally when the decay series is in equilibrium the gamma plus beta

radiation is proportional to the amount of uranium present.

Equivalent Assay

• Determination of uranium content by radiometric methods

• Mobilization of the uranium out of the deposition site e.g.

sandstone-hosted uranium deposits

– results in an overestimation of the uranium content, based on

radiometric measurements.

– Conversely, in a geologically young environment, a deficiency of

daughters relative to uranium will cause an underestimation of uranium

content based on radiometric methods.

• The degree of disequilibrium may

vary from place to place within a

deposit.

Resource Database

• Radiometric assaying of rock samples (e.g. core,

muck, channel, etc.) allows for fast and

inexpensive uranium determinations once

appropriate procedures are established and

instruments are calibrated.

• QC for radiometric data should be as rigorous as

that for chemical assays from an analytical

laboratory

• Radiometric data must be validated against

chemical assay data in order to:

– 1) ensure proper calibration of assaying and

logging tools, and

– 2) determine the degree to which disequilibrium

may be present.

• Radiometric analysis, does not obviate the need

for data validation through chemical assays.

Reporting

• The Competent Person should make the reader aware of

– database limitations and special economics considerations.

– the use of radiometric determinations,

– types of equipment employed,

– possible Disequilibrium,

– drill hole contamination,

– and any other pertinent characteristics should be clearly

elucidated.

• .

Reporting

• Economic considerations with respect of

– transportation and marketing may be of special significance for a

uranium project

– political concerns,

– permitting,

– pricing, supply/demand projections.

Acknowledgements

• Conference Organizers

• GSSA

• SAIMM

• Coffey

The SAMREC Code and Uranium

Ken Lomberg

Chairman of the SAMREC Working Group

Senior Principal - Coffey

WEBSITE

ALL SLIDES AND NEWS RELEASE

WWW.SAMCODE.CO.ZA