The mining industry worldwide, although it is a vital contributor to most national economies, has very limited global consensus on Mineral Reserve reporting standards. Since March 1997, the need for an international reporting standard took a greater urgency following the Bre-X scandal which proved to all investors that mining company – Public Reports & Reserve Statements should be standardised to some extent. Subsequently in October 1997 a mere five (5) CMMI participants (Australia, South Africa, UK, Canada and USA) met and reached provisional agreement at least, for the definitions of Mineral Resources & Mineral Reserves.
In South Africa, the self regulating national body, SAMCODES for the reporting of Exploration Targets, Mineral Resources and Mineral Reserves, provides the basis and guidelines similar to JORC in Australia, CBRR in Brazil and CIM in Canada. These bodies promote best practice in the international public reporting of Mineral Exploration Results, Mineral Resources, Mineral Reserves and hopefully global consensus on all reporting standards.
All shareholders today understand the need for our Public Reports to contain all the relevant information that investors and professional advisors would reasonably require (and expect to find) for the purpose of making reasoned and balanced judgements. It is for this reason that our boards should ensure that their public reports are based on work that can reasonably be justified to provide sufficient information with proof. This work must be based on work that is the responsibility of suitably qualified and experienced persons who are subject to an enforceable Professional Code of Ethics.
In order for public reports to be worth their intended value, they must be provided with sufficient information, the presentation of which is clear and unambiguous, easily understandable and not misleading. These reports include companies’ quarterly and annual Mineral Resource & Reserve statements and include for example, JSE (Johannesburg Stock Exchange) circulars and reports required by the Companies Act.
How do boards make sure that these reports do not fall short of section 12 of the Companies Act?
- One way of doing so, is by ensuring the sign-off by a professional Competent Person as required by the SAMREC code, who verifies and takes full responsibility for the authenticity of the information supplied.
- Further, the information must be based on reasonable assumptions which are cleary explained.
- The document must be consistent in its use of standardised terms and definitions.
- It must be unbiased and must identify the potential risks and uncertainties to potential investors and buyers.
- It must be balanced and not misleading.
- In a format that allows for comparing similar projects, and
- Understandable to a reasonable informed investor.
Currently, all Competent Person’s Reports for listed companies, must be submitted to the JSE for approval. The Readers Panel, as employed by the JSE, has a mandate to approve all documents pertaining to the Competent Person and Competent Valuator. In order to avoid embarrassment, Company boards should ensure that appointed Competent Persons is registered with Recognised Professional Organisations (RPO).
In order to find out more regarding suitable competent persons, their requirements and relevant experience – Phone +27 82 882 3224 or go to https://basico.co.za/