miskelly assignment ppt

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

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