The CRIRSCO Template and its relationship to UNFC-2009 and PRMS. Stephen Henley CRIRSCO

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1 The CRIRSCO Template and its relationship to UNFC-2009 and PRMS Stephen Henley CRIRSCO

2 Who is CRIRSCO? Minerals reporting standards The CRIRSCO classification Mapping to PRMS Mapping to UNFC

3 Who is CRIRSCO? CRIRSCO is a consortium of national reporting organisations (NROs), currently: JORC (Australasia) SAMREC (South Africa) CIM (Canada) PERC (Europe) SME (USA) Comision Minera (Chile)

4 CRIRSCO FAMILY OF STANDARDS FIRST EDITIONS JORC (1989) IMM (1991) SME Guidelines (1992) CIM (2000) SAMREC (2000) Chile (2007) Philippines (2007) INTERNATIONAL DEVELOPMENTS 1997: Denver Accord 1998: Geneva Convention with UNECE

5 CRIRSCO RELATIONSHIPS IASB - IFRS ICMM NRO JORC EXCHANGES ASX, NZX SPE - PRMS Partnership SAMREC JSE Template CRIRSCO CIM CSA UNFC PERC UKLA SME SEC Chinese Code Mongolia Chile Santiago Russian Code Peru Lima Philippines PSX

6 The NROs have each defined standards for public reporting of resources and reserves of solid minerals CRIRSCO was set up to assist convergence of these standards Future standards development is guided by the agreed CRIRSCO TEMPLATE

7 RUSSIA and UKRAINE September 2010: CRIRSCO in Moscow PERC includes Russian members, one of whom sits on the CRIRSCO committee Mapping now agreed between Russian minerals reporting system and CRIRSCO Template Protocol signed for development of Russian CRIRSCO-aligned standard, by end-2012 Ukrainian participation in the process is agreed, leading to a Ukrainian CRIRSCO standard

8 SCOPE: from CRIRSCO Terms of Reference CRIRSCO s remit includes all forms of solid minerals, including base and precious metals, gemstones, bulk commodities, aggregates, industrial minerals and energy minerals such as coal and uranium. It does not include non-solid energy minerals such as oil and gas and water or geothermal energy. CRIRSCO engages with the developers of oil and gas reporting standards to ensure to the extent possible that resource and reserve definitions are compatible or mutually understandable to third parties

9 SCOPE: from CRIRSCO TEMPLATE clause 5 The Template is applicable to all solid minerals, including diamonds, other gemstones, industrial minerals, stone and aggregates, and coal, for which Public Reporting of Exploration Results, Mineral Resources and Mineral Reserves is required by the relevant regulatory authorities.

10 THE CRIRSCO TEMPLATE NOT JUST A CLASSIFICATION It includes:- Definitions of Competence Reporting Definitions and Guidelines Classification for use in reports by public companies

11 CRIRSCO STANDARDS Transparency Clear unambiguous presentation Materiality All reasonable information expected Classification STANDARD Definitions and Guidelines Competence Impartiality 11

12 WHAT CRIRSCO DOES 1. Sets minimum standards for public reporting of Exploration Results, Mineral Resources and Mineral Reserves 2. Provides a mandatory system for classification of tonnage/grade estimates according to geological confidence and technical/economic considerations 3. Provides definitions for mineral resource and ore reserve classes that are compatible with international agreements 4. Requires Public Reports to be based on work undertaken by a Competent Person; describes the qualifications and type of experience required to be a Competent Person 5. Provides extensive guidelines on the criteria to be considered when preparing reports on Exploration Results, Mineral Resources and Mineral Reserves 12

13 WHAT CRIRSCO DOES NOT DO 1. Regulate the procedures used by Competent Persons to estimate and classify Mineral Resources and Ore Reserves (methodology) 2. Regulate companies internal classification or internal reporting systems 3. Deal with breaches of the Code by companies (This is a function for the Stock Exchanges) 4. Deal with breaches by individuals, these are dealt with under code of ethics of the relevant professional association 13

14 THE COMPETENT PERSON Rules of Conduct and Guidelines Duty To: The Public and Society; The Profession, Employers and Clients; Professional Bodies, Colleagues and Associates; The Environment, Health and Safety 14

15 THE COMPETENT PERSON Must have a defined minimum of relevant experience Must be a member of a recognised professional organisation with a code of ethics and disciplinary procedures

16 THE COMPETENT PERSON CRIRSCO-aligned standards require publicly reported reserve and resource information to be based on work undertaken by a Competent Person The Competent Person is named in the public report It is the Competent Person s responsibility to ensure that the estimates have been performed properly The Competent Person may be either an employee or a consultant 16

17 THE CRIRSCO CLASSIFICATION Exploration Results MINERAL RESOURCES MINERAL RESERVES Increasing level of geological knowledge and confidence Inferred Indicated Measured Probable Proved Consideration of mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors (the Modifying Factors").

18 REPORTING EXPLORATION RESULTS Exploration Results include data and information generated by exploration programmes that may be of use to investors but which may not be part of a formal declaration of Mineral Resources or Mineral Reserves. CAUTIONARY STATEMENT It is inappropriate to use such information for deriving estimates of tonnage and grade". 18

19 RESOURCE AND RESERVE CATEGORISATION CRIRSCO standards do not allow statements in public reports which provide only total figures for Mineral Resources or Mineral Reserves Mineral Resource estimates must be allocated to the defined categories of Measured, Indicated and Inferred Mineral Reserve estimates must be allocated to the defined categories of Proved and Probable. 19

20 RESOURCE AND RESERVE CATEGORISATION Categories of Mineral Resource estimates may NOT be aggregated in reports of any kind with categories of Mineral Reserve estimates. This is because Mineral Reserves estimates have already been adjusted for expected dilution and mining losses and therefore are not comparable with Mineral Resources. 20

21 So why not a single CRIRSCO reporting standard? CRIRSCO-aligned standards are written to meet the requirements of different regulatory regimes The TEMPLATE provides a common basis for national standards, extended or modified as required to meet local needs

22 Role of the NRO Simple example: JORC Special relationship with its national stock exchange regulatory regime More complex example: PERC Multiple national regimes, multiple professional organisations

23 JORC JOINT ORE RESERVES COMMITTEE (AUSTRALASIA) Professional & Industry Organizations Regulatory Organizations Responsible Entities Aus IMM AIG MCA ROPO ASIC JORC ASX Compliance & Guidance Standards JORC Code Competent Person Incorporated as Appendix Listing Rules Those Required To Comply Professionals Publicly listed companies Relationship Key Compliance Responsible for Guidance May Act As Accountability or Oversight Communication Link 23

24 PERC PAN EUROPEAN RESERVES & RESOURCES REPORTING COMMITTEE Professional & Industry Organizations Regulatory Organizations Responsible Entities AMA Companies Russia: NAEN SveMin IGI EFG PERC IOM 3 GS ROPO LSE UKLA ESM A AIM EU Exchanges Compliance & Guidance Standards PERC Code Competent Person Incorporated by reference. In common with: JORC, SAMREC, CIM, SME, (Russian) Financial Services Directive Listing Rules AIM Guidance Notes Those Required To Comply Professionals Publicly listed companies NOMADS Relationship Key Compliance Responsible for Guidance May Act As Accountability or Oversight Communication Link

25 CODE CONVERGENCE Adoption of CRIRSCO type Standard Reporting Standard recognized by National Regulator Australia Canada South Africa Europe Chile USA SME USA SEC UNFC Competent Person Requirement Reporting of Mineral Resources allowed Inferred Resources allowed in economic studies Commodity price process specified by management ROPO type reciprocal system Level of study required for Mineral Reserves ** Level of Study ROPO 3** Appropriate assessments and studies determined by the Competent Person Pre feasibility study Expected (UK/W Europe); Required (Canada/Chile) Feasibility Study for new projects Feasibility Study for Proved Reserves; Pre feasibility Study for Probable Reserves Recognised Overseas Professional Organisation Allowed under certain restricted circumstances 25

26 Mapping of CRIRSCO with other classifications Russia: GKZ classification for minerals SPE: PRMS UNFC 2009

27 CRIRSCO UNFC PRMS PRODUCTION RESERVES UNRECOVERABLE PROSPECTIVE RESOURCES UNRECOVERABLE Range of Technical Uncertainty 27 UNDISCOVERED IIP Potentially Commercial TOTAL PETROLEUM INITIALLY-IN-PLACE (IIP) Sub-Commercial DISCOVERED IIP Commercial Increasing Commercial Certainty Exploration Results Mineral Resources Inferred Indicated Measured (the modifying factors ) Mineral Reserves Probable Proved Separate but Cross-referenced CONTINGENT RESOURCES Geological Knowledge and Confidence

28 Mapping to PRMS and UNFC: first step

29 PRMS CRIRSCO TEMPLATE

30 Exploration Results Only a notional mapping between CRIRSCO Exploration Results and PRMS Prospective Resources CRIRSCO restricts reporting of Exploration Results to the actual data. Estimates of tonnage or grade are not allowed

31 UNFC (2009) CRIRSCO TEMPLATE

32 Exploration Results As with PRMS mapping. CRIRSCO restricts reporting of Exploration Results to actual data NOT estimates of tonnage or grade Why not? Because there is insufficient factual basis for any such estimates Note CRIRSCO standards are intended for market-sensitive reporting. Allowing flights of fancy opens the door to scams

33 NO GEO-FANTASY IN CRIRSCO CRIRSCO standards do not allow the reporting of anything not based directly upon geological data There is thus no need for any undiscovered categories

34 PUBLIC REPORTING FOR THE MARKETS CRIRSCO standards are intended for public reporting by mining companies A Mineral Resource must have reasonable prospects for eventual economic extraction. (Template, cl.19) No need for any discovered uneconomic or unrecoverable categories

35 UNFC (2009) CRIRSCO TEMPLATE Socio Economic Viability E3 E1 E2 111 = Proved Reserves 112 = Probable Reserves Detailed 221 = Measured Resources 222 = Indicated Resources 223 = Inferred Resources F1 Project Feasibility F2 F3 F4 334 = Exploration Results G1 G2 G3 G4 Geological Knowledge 35

36 How the CRIRSCO-UNFC mapping might be useful A method for governments and NGOs to incorporate market data (using the CRIRSCO classification) into databases and broader statistical summaries A mechanism for companies to use, if they wish (for inhouse planning NOT for public reporting) a standardised classification beyond the publicly reported CRIRSCO categories