Insights Into the Proposed Updates to the JORC Code
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the “JORC Code”), as developed by the Australasian Joint Ore Reserves Committee, sets out minimum standards, recommendations and guidelines for Public Reporting of Exploration Results, Mineral Resources and Ore Reserves in Australasia.
The first version of the JORC Code was released in 1989, although the committee behind the Code was formed in 1971 following regulatory concern around unacceptable practises associated with the Western Australian Nickel boom of the 1960s. Updated versions followed in 1992, 1996, 1999, 2004 and 2012.
Historically, the JORC Code formed the basis of all national codes used for reporting of resources and reserves accepted by member countries of the Committee for Mineral Reserves International Reporting Standards (“CRIRSCO”), and an update to one of these Codes typically has an impact on others as ideas and changes are incorporated internationally.
An updated draft of the JORC Code was recently published for public feedback with the intention of seeking comment from stakeholders ahead of a final review and update. The draft code, as published on 1st August 2024, includes changes to six areas:
- Structure and format;
- Competence and responsibility;
- Reasonable prospects;
- ESG;
- Risks: Opportunities and threats; and
- Reconciliation.
Structure and Format: The draft Code is structured differently to the current 2012 version with the intention of aligning better with the CRIRSCO template and improving clarity. The changes include division of the Code into numbered sections with sub-headings and numbered identifiers for each row of the JORC Table 1. The new draft also lays out changes to Table 1 which now has four parts including sections for a Documentation Checklist, Exploration, Mineral Resources and Ore Reserves. This restructuring should allow additional clarity for reporting requirements through better definition and extended guidance for each clause.
Competence and Responsibility: The Competent Person (“CP”) responsible for a publicly released report must have a minimum of five years of relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking and be a member of a suitable level in one of the acceptable professional organisations. Changes in the draft version of the update JORC Code set out new requirements for the CP to improve transparency and disclosure of the CPs experience. These changes include:
- A requirement for the CP to upload a publicly available CV to the JORC website;
- A requirement for the CP to complete an induction in the new Code; and
- Requirements for the CP to include summary statements defining experience relevant to each report.
In addition to the changes relating to transparency, the new Code sets out the role of a “Specialist”, allowing for definition of technical personnel upon whom a CP has relied on in production of the report. This is a tightening of requirements relative to previous Code versions where a greater level of self-certification was allowed. The new requirements will ensure that the experience of the author of each publicly released report is easily reviewable.
Reasonable Prospects: The 2012 JORC Code required Mineral Resources to be reported only where there were “reasonable prospects of eventual economic extraction”. The application and discussion of these prospects could vary wildly from report to report. The draft Code sets out changes with the intention of clarifying what is required in this area, improving consistency and reporting and improving awareness of all modifying factors (including those relating to ESG) that must be considered. These changes aim to ensure that a level of consistency is achieved in assessing prospects, reducing the possibility of those prospects being overstated.
ESG: The draft Code seeks to increase awareness of ESG considerations in reporting of Mineral Resources and Ore Reserves. This includes new Code clauses specifically related to ESG to ensure that due consideration is given, and appropriate disclosure made, to ESG factors at a suitable level at each stage of the project development from exploration through to development and eventual closure and rehabilitation. This is a major change from previous versions of the Code and should ensure ESG limitations and requirements are recognised early in the Project life cycle and can be addressed in a timely and appropriate manner.
Risk: Opportunities and Threats: The draft Code sets requirements for discussion of risk (the effect of uncertainty), made up of opportunities (potential upside) and threats (potential downside) to the project under review. The intention of this is to ensure that potential risks to the project are transparent to an investor, particularly where project specific risks are that could have a material impact on the project have been identified. The changes include a new section in the JORC Table 1 for completion for all stages of project reporting. It is down to the CP to identify and determine which opportunities and threats are material to the project and must include discussion on potential impacts and the control measures to manage and optimise (for opportunities) or mitigate outcomes (for threats). Whilst no examples are given, threats could range from political and security impacts to geo and environmental hazards, whilst opportunities could range from the potential for deposit expansion through additional exploration or acquisition of adjacent properties.
Reconciliation: The current version of the JORC Code does not require a form of the reporting of reconciliation of production against the estimated resources/reserves. The draft JORC Code includes a new clause that requires reconciliation of the estimate against mine production results or against any previous estimates. Reconciliation against production provides an invaluable tool for validation of a Mineral Resource estimate and assumptions made in the modifying factors used for reporting of Mineral Resources or Ore Reserves. Poor reconciliation results may point towards poor estimation or reporting methodology, or mining practises not in line with those used for estimation of resources/reserves, and the requirement for reporting of such results will force investigation and/or corrective measures to be undertaken.
A summary of the proposed changes is available online with an online survey for comment.
