Note 8 (PDF 107 KB)
5A (The JORC Code) - Listing Rules (PDF 335 KB)
Update - 5 December 2007
Update - 3 May 2007
18 - Listing Rules (PDF 204 KB)
18 March 2008
Important information for ASX Listed Entities
I. Company Announcement matters
ASX Company Announcements Office - Easter Hours for Thursday, 20 March 2008
ASX's Company Announcements Office (CAO) will close at 4.30 pm EDST (Sydney time) on Thursday, 20 March 2008.
Announcements received after 4.30 pm EDST (Sydney time) on this date will not be processed until the next business day. Companies are asked to ensure that they allow sufficient time for ASX staff to receive and process announcements at that time.
Company Announcements Platform - announcements with links to analysts' reports not to be lodged
8 (PDF 107KB), paragraph 91, states that ASX considers that it is not appropriate for analysts' reports on listed companies to be lodged as company announcements on the Company Announcements Platform.
ASX also considers that it is inappropriate for companies to lodge announcements on the Company Announcements Platform that contain a link to the analyst's report. The Company Announcements Office requests that such announcements not be lodged.
End of daylight saving
Companies are reminded that daylight saving ends in the various states on the following dates.
|NSW, Victoria, ACT, South Australia, Tasmania
The hours of operation of the Company Announcements Office will remain the same. The Company Announcements Office opens at 8.30 am Sydney time and closes at 7.30 pm Sydney time.
II. JORC Code matters
In excess of one third of all ASX Limited ("ASX") listed companies are mining and exploration entities. ASX monitors all announcements made by listed entities and has during the December 2007 quarter identified a number of
(PDF 335KB) compliance reporting issues that ASX believes would be assisted by ASX providing further guidance to companies.
These issues include:
- Reporting of "in situ" values
- Reporting historical or non-JORC compliant estimates
- Competent Person statement
- Reporting exploration targets
- Lack of drill hole information
- Combining categories of resources and reserves
- Incorrect use of reserves or resources to describe results
1. Reporting of "in - ground value" or "in situ value"
During the December 2007 quarter, ASX identified an increased usage of 'in-ground value' or 'in situ value' by companies when reporting exploration results or evaluation of deposits that commonly include a large proportion of Inferred Resources. Consequently, ASX seeks to provide clarification on the usage of 'in-ground value' or 'in situ value' when reporting exploration results.
The practice of reporting 'in-ground value' or 'in situ value' by companies is an attempt to convey the significance of the exploration results or deposit to the investing community by converting it to a dollar amount.
However, the use of 'in-ground values' has little to no relationship to economic viability, value or potential returns to investors and may therefore be misleading. The term implies economic viability without considering the application of the Modifying Factors (JORC Code
(PDF 335KB) Clauses 11 & 28), in particular, the mining, metallurgical, economic, marketing, legal, environmental, social, and governmental considerations. In determining project viability it is necessary to include all reasonable Modifying Factors (JORC Code
(PDF 335KB) Clause 28) to determine the economic value that can be extracted from the mineralisation.
Many deposits with large 'in-ground values' are never developed because they have a negative Net Present Value when all reasonable Modifying Factors are considered. By reporting an 'in-ground value' or 'in situ value' for exploration results or when evaluating deposits that commonly include large portions of inferred resources, companies are not properly representing the economic viability of the project, or the net economic value that can be extracted from the mineralisation.
In practice, the economically viable portion of a mineral resource is converted to ore reserves only after taking into account all Modifying Factors. Clause 27 of the
(PDF 335KB) states: "The words 'ore' and 'reserves' must not be used in describing Mineral Resource Estimates as the terms imply economic viability and are only appropriate when all Modifying Factors have been considered". Inferred Resources are not able to be converted to Ore Reserves, and it is also possible that portions of Indicated and Measured Resources may not convert to Ore Reserves nor contribute to the Net Present Value of a given mineralised body at the time of evaluation.
The publication of 'in-situ' or 'in-ground values' may also breach the principles of the
(PDF 335KB) as the use of these terms:
- is not transparent, in that the reader is not "provided with sufficient information, the presentation of which is clear and unambiguous, to understand the report and not be misled" (JORC Code
(PDF 335KB) Clause 4); and
- lacks materiality in that the statement of 'in-ground values' does not "contain all the relevant information which investors and their professional advisors would reasonably require, and reasonably expect to find in the report, for the purpose of making a reasoned and balanced judgement" (JORC Code
(PDF 335KB) Clause 4).
Consequently use of the terms 'in-ground value' or 'in situ value' is also contrary to the intent of Clause 27 of the Code, and should not be reported by companies.
2. Reporting historical estimates or estimates currently not reported in accordance with the JORC Code
Companies seeking to list on ASX wishing to include information in their prospectus which is not JORC compliant need to approach ASX for a waiver, and, subject to certain conditions, waivers may be granted. Listed companies seeking to announce information that does not comply with the
(PDF 335KB) will also need to approach ASX for a waiver, and, in certain circumstances, waivers may be granted (see
Companies Update dated 5 December
2007). Where companies lodge announcements which are based on historical estimates that are not reported in accordance with the
(PDF 335KB) and not the subject of an ASX waiver, or do not come under Clause 18 of the
(PDF 335KB), it is likely that ASX will request the company to make a further announcement retracting the comments made in the earlier announcement. In addition ASX may pursue further supervisory action.
3. Competent person statement
In releasing public reports that contain information in relation to Exploration Results, Mineral Resources and/or Ore Reserves, companies are required under clause 8 the
(PDF 335KB) to do the following:
- disclose the name(s) of the Competent Person or Persons, state whether the Competent Person is a full-time employee of the company, and, if not, name the Competent Person's employer;
- ensure that the Competent Person has a minimum of five years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which that person is undertaking; and
- ensure that the public report is issued with the prior written consent of the Competent Person or Persons as to the form and context in which it appears.
The ASX Companies Update dated 3 May 2007 outlined ASX's view that it regards the completion of a consent form to be good practice and will accept the completed form (in a format proposed by ASX or another equivalent format) as evidence that the required written consent has been obtained. ASX may request the company to release to the market evidence that it has obtained the consent of the competent person to the inclusion, in the form and context in which it appears in the public report, of the information prepared by the Competent Person. ASX may in certain instances also write to the Boards of listed companies requesting further information pursuant to
listing rule 18.7 (PDF 204 KB)
to determine whether ASX believes that the company is in compliance with the rules. In these circumstances the request and response will be released to the market.
4. Exploration Targets
Clause 18 of the JORC Code
(PDF 335KB) facilitates the reporting of exploration targets in public reports. There are, however, a number of reporting conditions that must be satisfied before an exploration target is reported. The reporting conditions include:
- Any such information relating to exploration targets must be expressed so that it cannot be misrepresented or misconstrued as an estimate of Mineral Resources or Ore Reserves.
- Any statement referring to potential quantity and grade of the target must be expressed as ranges and must include:
- a detailed explanation of the basis for the statement; and
- a proximate statement that the potential quantity and grade is conceptual in nature, that there has been insufficient exploration to define a Mineral Resource, and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
It is not sufficient to disclose an exploration target without also disclosing all of the information required under the second reporting condition. Where an exploration target is reported ASX requires the information that satisfies reporting condition 2 to be disclosed with the same prominence as the exploration target and in a proximate location. Where an exploration target is reported in a company presentation, ASX expects the information that satisfies reporting condition 2 also to be included in the presentation slides. If a public report does not comply with clause 18, ASX will require a company to make a retraction or clarifying announcement.
5. Lack of drill hole information
ASX has identified an increase in the reporting of isolated assays, and isolated drill holes without placing them in perspective. Pursuant to clause 17 of the
(PDF 335KB), a company should not report an isolated assay or drill hole without also disclosing the results from all relevant assays or drill holes. It is not necessary for the company to report all assays or drill holes provided that an explanation is given as to why the results are not considered relevant (e.g., cut off grade). In reporting
Exploration Results, companies must comply with the requirements of clause 17.
6. Combining categories of resources and reserves
Clauses 25, 33, and 34 of the JORC Code
(PDF 335KB) do not allow statements in public reports which provide only total figures for Mineral Resources or Ore Reserves.
Mineral Resource estimates must be allocated to the defined categories of Measured, Indicated, and Inferred. Ore Reserve estimates must be allocated to the defined categories of Proved and Probable. Mineral Resources estimates must not be aggregated with Ore Reserves estimates to report a single combined figure.
In situations where figures for both Mineral Resources and Ore Reserves are reported, a statement must be included in the report which clearly indicates whether the Mineral Resources are inclusive of, or additional to, the Ore Reserves.
7. Incorrect use of reserves or resources to describe results
The reporting of Exploration Results is common in the early stages of exploration when the quantity of data is generally not sufficient to allow any reasonable estimates of Mineral Resources. Public reports of
Exploration Results must not be presented so as unreasonably to imply that potentially economic mineralisation has been discovered.
Companies are encouraged to refer to Table 1 of the JORC Code
(PDF 335KB) for the list of main criteria which should be considered when preparing reports on Exploration Results.