5 - Listing Rules (PDF 113KB)
5A - Listing Rules (DOC 335KB)
7 - Listing Rules (PDF 238KB)
5 December 2007
Important information for ASX Listed Entities
JOINT MARKET STATEMENT - ASX & JORC
Historical estimates and foreign resource and reserve estimates, currently not reported in accordance with the JORC Code
In some instances mining companies listed on ASX are in a position where they want to report, or believe they are required to report, material statements of historical estimates or foreign resource and reserve estimates, currently not reported in accordance with the JORC Code. Historical estimates are those prepared pre-1989, which is when the JORC Code was introduced to the ASX Listing Rules as an Appendix.
This Joint Statement by ASX and JORC sets out the circumstances in which ASX will consider waiving the company's obligation under listing rule 5.6, which requires a report prepared by a mining entity to be in accordance with the JORC Code, in order to accommodate the reporting of historical pre-JORC Code estimates. This Statement also sets out the minimum requirements for disclosing information in relation to such estimates.
This statement is intended to provide certainty to the market in terms of when and how historical non-JORC Code compliant reporting may be made. It is also intended to reinforce that there are only exceptionally limited circumstances in which ASX will accommodate reporting that is not in accordance with the requirements of the JORC Code. Such reporting must, at a minimum, comply with the requirements of this Statement, and any other conditions that ASX imposes on the company. Nothing in this statement affects ASX's ability to take action against a listed company for breach of listing rule 5.6 or any other listing rule.
Circumstances to which this Statement applies
- Situations where previously prepared reports (which may or may not be published) include statements of historical (pre-JORC Code or before the requirement to name the Competent Person) estimates, or foreign resource and reserve estimates currently not reported in accordance with the JORC Code.
Circumstances to which this Statement does not apply
- Situations where exploration and evaluation programs are incomplete and companies want to report preliminary resources;
- Situations where appropriate studies have not yet been completed to the point to allow the conversion of mineral resources to ore reserves;
- Situations where the company wishes to refer to resource or reserve estimates, currently not reported in accordance with the JORC Code, and relating to areas adjacent to or near to the company's tenements;
- A company is under no circumstances to treat the historical estimate as a current reserve or resource, for example by including the estimate in economic analysis or in the company's current reserve or resource estimates. The company must make appropriate JORC Code disclosures in accordance with Chapter 5 of the listing rules in relation to those estimates, before the historical estimate can be treated as a current reserve or resource.
- Any other situation where a company is seeking to avoid reporting in accordance with the JORC Code and which does not involve reporting historical or foreign estimates in the spirit of this Statement.
Requirements for non-JORC Code Compliant Historical and Foreign Reporting
A company which requests a waiver from listing rule 5.6 for the purposes of reporting statements of historical estimates or foreign resource and reserve estimates, currently not reported in accordance with the JORC Code must, at a minimum:
- Clearly disclose that the historical or foreign estimate is not reported in accordance with the JORC Code and it is uncertain that following evaluation and/or further exploration the resource or reserve will ever be able to be reported in accordance with the JORC Code.
- Clearly identify and disclose the source(s) and date of all the historical estimate(s).
- Confirm that the historical estimate is relevant and state why it is relevant.
- Comment on the reliability of the historical estimate with reference to any items in Table 1 of the JORC Code which are relevant to understanding the reliability of the estimate. Specifically comment on the nature of the historic work programs on which the historical estimate is based and the key assumptions and parameters underlying the historical estimate.
- Comment on the materiality of the historical estimate, with specific reference to:
- Why the estimate is material;
- What exploration or evaluation program the company intends to undertake;
- How the company intends to fund that program;
- Any impact on resources currently devoted to other exploration projects.
- State whether the historical estimate uses categories other than the ones set out in the JORC Code and, if so, include an explanation of the differences.
- Include any more recent estimate or data available to the company.
- Disclose the company's intention to evaluate those matters listed in Table 1 of the JORC Code (Appendix 5A of the listing rules) which are relevant to the estimate and/or conduct exploration for the purposes of allowing a Competent Person to take responsibility for the estimates of Mineral Resources or Ore Reserves in order that they may be reported by the Company in accordance with the JORC Code, and the time frame in which the Company intends to report those activities.
- Indicate that the report is consistent with the guidance contained in this Companies Update and Companies Update no 05/04 25 March 2004 (reprinted below)
- Include a statement by a Competent Person who accepts responsibility for the accuracy of the information disclosed in items 2 to 9 above.
The purpose of these ten requirements is to provide adequate warning to investors and to their professional advisers that the information disclosed by the company is not in accordance with the JORC Code. The materiality of the estimates disclosed can therefore be considered in this context.
Excerpt: Companies Update no 05/04 25 March 2004
JORC Code Compliance, Chapter 5 of ASX Listing Rules
In recent months ASX has noted some instances where companies, when reporting mineral resources and ore reserves, have announced resources which are not in compliance with the requirements of the JORC Code. In some instances, announcements have referred to a non-JORC compliant "resource of xx tonnes and yy grade...".
ASX, in consultation with JORC, takes the view that this represents unacceptable practice under the JORC Code, compliance with which is a requirement of Chapter 5 of ASX Listing Rules.
Chapter 5 of the ASX listing Rules requires ASX listed companies to prepare exploration results and mineral resources and ore reserves estimates in compliance with the JORC Code. The description of a resource or reserve estimate as a
"non-JORC compliant", resource or reserve estimate is not acceptable to ASX.
Where a listed company does release to the market a "non-JORC compliant" resource or reserve estimate without prior consultation with ASX, ASX will consider halting trading in the entity's quoted securities until the matter is clarified/rectified.
There may be limited occasions where a listed company believes it needs to provide a
"non-JORC compliant" estimate under the Continuous Disclosure requirements of the ASX Listing rules. In such cases a company will need to consult with ASX prior to making such disclosure.
Structured Capital Raising Programs - Listing Rule 7.3.2
ASX has recently reviewed its policy in relation to granting waivers from Listing Rule 7.3.2 to allow a longer period than three months in which to issue securities following shareholder approval under Listing Rule 7.1.
The three month rule prevents companies using the authority granted by shareholders for undefined issues to parties unknown - generally called
'issues at large' - beyond a timeframe that is considered reasonable. This acts to stop approval being used as authority for issues of securities in circumstances substantially different from those contemplated at the time of approval.
The policy review, however, recognises the need to provide more timing flexibility for companies adopting capital raising programs that are highly structured and linked to clearly specified work programs. There is no intention to alter the underlying policy of the rule - that the validity of shareholder approval for proposed 'issues at large' should be limited to a period of 3 months following shareholder approval.
- Circumstances in which waivers will be considered
In determining whether a capital raising program is one to which relief from the three month rule may be given, ASX will be guided by the whether or not:
- The company has a detailed and structured capital raising program that is clearly linked to a well articulated program of work or project that is supported by detailed research or analysis;
- There is a high level of certainty that the work program or project will proceed as proposed;
- There is evidence of commitment by identified investor(s) to the program and the activities that it will support.
- The capital raising program is subject to shareholder approval and there is sufficient certainty about the matters listed in paragraph B at the time of shareholder approval. The above is not intended to be an exhaustive statement of the factors that ASX may take into consideration when deciding whether or not the waiver should be granted.
- Information to be made available to Shareholders
ASX needs to be satisfied that at the time of shareholder approval there is sufficient certainty in relation to:
- The specific identity of the allottees of the issue. It is not sufficient to state the basis upon which allottees will be identified or selected, i.e., ASX will expect shareholders to be provided the names of natural persons or companies which are the real investors -- not, for example, 'investors to be identified by XYZ stockbroker' or nominee accounts.
- The price at which the securities will be issued (which may be either a fixed price, or a percentage that is at least 80% of the average market price at the time of issue subject to its
being no less than a fixed floor price approved by security holders). The Notice of Meeting is expected to contain discussion on the risk of economic dilution of shareholders' interests arising from the pricing formula. In particular, the risk that the securities may be issued at a substantially lower price than the price current at the time of shareholder approval must be clearly set out.
- The maximum number of securities that will be issued. The explanatory notes to the Notice of Meeting should explain the effect of potential variations in the prevailing share price on the number of securities that may be issued. This may be in the form of examples of different scenarios based on different issue prices indicating the number of securities that may be issued and the percentage of issued capital they will represent.
- The full terms and conditions of the capital raising facility.
- The purpose to which the funds being raised will be used. ASX will expect shareholders to have been provided with:
- Detailed specifics and an explanation of the research or exploration/work program, rather than general statements such as 'the funds are to fund exploration or research';
- The timing around the work and when the results can reasonably be expected.
- Details of factors that that might affect the company's ability to carry out the work program or project as proposed.
- A commitment that the capital raising program will be suspended pending further shareholder approval in the event that the work program or project is changed materially.
- Information to be made available to the market on a quarterly basis
Among any of the conditions ASX might apply to the grant of a waiver will be a requirement that the company, on a quarterly basis, or as otherwise required by ASX, provides a detailed report on its progress in relation to the work program or project and the extent to which it has used the capital raising facility approved by shareholders.
- Period allowed under the waiver
ASX will require that authority for issues under a program be refreshed at least annually. However if a company seeks approval for a capital raising program at an annual general meeting, to ensure continuity of funding under the program and taking into consideration that the date of the next annual general meeting may be held more than 12 months in the future, waivers may be granted on the basis that shareholder authority for the issue has a maximum life of 15 months from the date of approval. If the approval is sought for a capital raising at a general meeting other than the annual general meeting, it may be appropriate for the period of the shareholder authority to extend only until the next annual general meeting, at which meeting the company can seek a renewal of authority for issues under the program. Any waivers granted will be limited in time to the period (of up to 15 months) to be approved by shareholders. Companies that wish to extend the capital raising program past the initial period approved by shareholders will be required to apply for the waiver again before seeking another shareholder approval.