Authors: Geoff Kerrigan, Senior Associate; Louis Mitchell, Solicitor
Recent media reporting indicates that the long-awaited update to the JORC Code may be ‘imminent’, with the JORC working towards a target date for releasing a final draft of the amendments to the JORC Code in ‘late 2023’.
Key areas under review include:
greater prominence for ESG risk in reserve and resource estimation (with a proposed new clause of the code and a Table 1 criterion to specifically address ESG issues being considered);
the practical application of the ‘reasonable prospect of eventual economic extraction’ test; and
the interface between the JORC Code and the ASX Listing Rules.
The proposed revisions to the code follow an extensive survey and consultation process (with over 500 online submissions) and have been developed in consultation with the Minerals Council of Australia, AusIMM and The Australian Institute of Geologists. The Minerals Council of Australia has indicated that ASX and ASIC had ‘no material feedback’ on the draft updates to the code.
The collaborative work being undertaken by industry and the relevant regulators to update the code is well received and demonstrates Australia’s ongoing commitment to being a leading jurisdiction for mining investment.
The Australasian Joint Ore Reserve Committee (JORC) is responsible for the development and ongoing update of the Australasian Code for Reporting of Exploration results, Minerals Resources and Ore Reserves (JORC Code). The JORC Code provides for the classification minerals exploration results, mineral resource estimates and ore reserve estimates according to levels of confidence geological information and economic assessment. Under the ASX Listing Rules, all exploration results, mineral resource estimates and ore reserve estimates must be reported in accordance with the JORC Code.
The current version of the JORC Code was published in 2012 and took effect on 1 December 2013.
The genesis of the JORC Code review was an online survey open to all relevant stakeholders in 2020 – 2021, which sought feedback on the current JORC reporting framework and key issues for review. Responses were received from over 500 stakeholders, primarily from geologists and mining engineers.
Survey participants were asked where they would like to see greater clarity in the JORC Code. The following key areas were identified in the survey responses:
The Reasonable Prospects of Eventual Economic Extraction Test (including the incorporation of ESG considerations into the RPEEE test)
Relationship between the JORC Code and the ASX Listing Rules
The definition of a ‘Scoping Study’
Table 1 reporting requirements
The definition of ‘Competent Persons’
Disclosure of additional information on ESG and technological factors
Re-reporting of reserve and resource information by companies
The ‘ground up’ consultation process and involvement of subject matter experts in designing and informing the JORC Code review is commendable. Whilst the timetable for reforms has been pushed out (in part due to COVID-related disruptions), the proposed modernisation and potential for more detailed guidance around the practical operation of the reporting framework is a welcome development.
Whilst the potential changes in relation to the ‘reasonable prospect for eventual economic extraction’ test and increased focus on ESG factors are aligned with the broader theme of increased engagement by mine developers and investors on ESG related issues, they also have the potential to be a key area of focus for mining companies, investors and the competent persons required to provide competent person sign-offs.
Given the potential for the JORC Code review to result in substantive changes to the related ASX Listing Rules and ASX Guidance Notes, a transitional period between the finalisation of the code revisions and the revised provisions taking effect may be appropriate (as was the case for the 2012 update).
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