Best Practices and Reporting Guidelines for Exploration and Mining Companies

Transcription

1 October 1999 Best Practices and Reporting Guidelines for Exploration and Mining Companies Mineral Exploration Best Practices Guidelines Guidelines for Technical Reports Disclosing Mineral Exploration Information In February 1999, the TSE-OSC Mining Standards Task Force released its final report, Setting new standards. While the report contained suggested best practice and reporting guidelines, it also recommended that industry develop its own national best practices and exploration reporting guidelines. Since August 1999, a committee, consisting of representatives of the Prospectors and Developers Association of Canada (PDAC), the Toronto Stock Exchange (TSE), the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), the Canadian Council of Professional Geoscientists (CCPG) and the Mining Association of Canada (MAC), has been working to develop a set of guidelines for use by exploration and mining companies in Canada. Committee members include mining and exploration industry professionals representing diverse backgrounds, experience, and geographic locations in Canada and the key industry associations. They are: Dave Comba (PDAC), Velasquez Spring (PDAC), Graham Farquharson (CIM), Henrik Thalenhorst (CIM), Marcel Vallée (CIM), George Cavey (CCPG), Bill Pearson (CCPG), Hugh Squair (OSC), John Drury (OSC), Paul Severin (MAC) and Maureen Jensen (TSE). The following draft Guidelines for technical reports disclosing mineral exploration information and Mineral exploration best practices guidelines represent the work of the committee. They are designed to assist Qualified Persons (QPs) in the design, implementation and reporting of exploration program results and to help QPs determine whether they have discharged their responsibilities adequately. It is anticipated that the use of the guidelines will also bolster investor confidence in publicly released exploration information. The mandate of the committee did not include the estimation or the classification of resources and reserves. These are detailed subjects in their own right and should be part of more detailed documents. Since there is an industry committee currently working on the classification and definition of resources and reserves, this work has been incorporated into the guidelines by reference. The committee strongly recommends that the industry work file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (1 of 10) [ :33:10 AM]

2 towards developing guidelines for the estimation of resources and reserves to ensure that best practices are identified and established for use by QPs. The following are draft guidelines, and final guidelines will be published in early We encourage members of the PDAC to submit any comments they have by December 15,1999, to: Best Practices and Reporting Guidelines Committee c/o Mr. David Comba Prospectors and Developers Association of Canada 34 King Street East, 9th Floor Toronto, Ontario M5C 2X8 Tel: Fax: Mineral Exploration Best Practices Guidelines Preamble: These guidelines have been prepared to assist the Qualified Person in the planning and supervision of exploration programs. Mineral exploration programs must be under the supervision of the Qualified Person who will be responsible and accountable for the planning and conduct of all exploration activity and the implementation of quality control programs. The Qualified Person may base the exploration program on such geological premises and/or interpretation of existing information as he/she may decide and select such exploration methods and tools as he/she may judge to be appropriate. In planning, implementing and supervising any exploration work, the Qualified Person should ensure that the practices followed are based on criteria that are generally accepted in the industry or that can reasonably be justified on scientific or technical grounds. This set of broad guidelines or best practices has been drawn up to ensure a consistently high quality of work that will maintain public confidence and assist securities regulators. The guidelines are not intended to inhibit the original thinking or application of new approaches, that are fundamental to successful mineral exploration. Results should be summarized and reported in accordance with GUIDELINES FOR TECHNICAL REPORTS DISCLOSING MINERAL EXPLORATION INFORMATION. 1. Qualified Person All exploration work from which public reporting will ensue must be designed and carried out under the supervision of a Qualified Person ( QP ). A QP is defined in National Instrument as an individual, who is an engineer or geoscientist with at least five (5) years experience in mineral exploration, mine development, operations or project assessment, has experience relevant to the subject matter of the project or report and is a member in good standing of a recognized professional association. 2. Geological Concept file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (2 of 10) [ :33:10 AM]

3 The geological premise on which the exploration work is conducted including the deposit type, geological setting and style of mineralization sought, should be supported by relevant field data and reasoned scientific discussion. 3. Quality Control Throughout the process of mineral exploration, the QP responsible must ensure that quality assurance and quality control measures are in place and are being followed. Quality control programs should be systematic and apply to all types of data acquisition, across the full range of values measured and not just to high or unusual results. Unusual or unexpected results should be confirmed before they are reported to the public. 4. Exploration Methods & Data Collection Field work is to be conducted under the direct supervision of a QP at the site. Data should be properly recorded and documented at appropriate scales to facilitate interpretation and target identification. Sample locations and drill holes should be accurately located with respect to known reference points. The QP(s) supervising this work must ensure that any work by employees, contractors or consultants is done by competent personnel and that appropriate quality control and security procedures are practised. Whenever several persons carry out similar duties or when the data has been collected over a period of time, care should be taken to ensure the consistency of the data being used in correlation, interpretation and estimation. 5. Records The exploration process including planning, mapping, sampling, sample preparation, sample security and analysis or testing should be accompanied by detailed record keeping setting out the procedures followed and the results obtained. In addition to paper records, digital storage is encouraged in a standard format on a reliable media. A program of data verification should be in place to confirm the veracity of exploration results that are entered into the database. A summary of records should be included in a periodic technical report produced and signed by the QP. Any deviation from established practices must be well documented and justified. 6. Sampling All sampling programs must be carried out in a careful and diligent manner and implement scientifically established sampling practices designed and tested to ensure that the results are representative and reliable. The practices and procedures used in each sampling program must be appropriate for the objectives of the program. Samples must be collected under the supervision of a QP. Quality control programs appropriate to the type of sample and the mineralization must be designed and implemented. These programs should include such measures as the inclusion of external blanks, standards and duplicate samples, as well as duplicate analysis at other facilities. Where the volume of individual samples is reduced prior to shipping to a laboratory for analysis, appropriate reduction and splitting procedures to obtain representative subsamples file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (3 of 10) [ :33:10 AM]

4 must be applied. Check sampling on a regular basis is required. The drilling method will be selected by a QP and should be appropriate to the material being investigated and local drilling conditions. The drill hole size selected should provide sufficient sample material for analysis and reference. Accurate surface and downhole locational surveys should be undertaken using techniques appropriate for the hole size, angle and length of holes. A representative fraction of the drill sample material needs to be retained. If representative samples are not retained the QP must report and explain the reason for this decision. 7. Drill Hole Logging Drill logs, forms or software specifically suited to the type of drilling, the particular geological situation, and the minerals being sought, should be used for detailed geological logging of core or cuttings. Logs should be appropriately detailed for the type of drilling being conducted, the geological setting, type of mineralization, and geotechnical conditions. In all cases, core or sample recoveries will be noted on the logs. Drill logs should be accompanied by cross sections depicting basic geology and hole data including correlation with surface geology and any nearby holes. A photographic record of the core may be included. 8. Sample Security The security of samples from the sampling site to a laboratory or other testing facility is a vital component of the sampling process. Procedures should include the use of secure core logging, sampling, storage and preparation facilities, as appropriate, and the prompt, secure and direct shipping of samples to the laboratories. The QP should endeavour to put in place the best security procedures possible given the geographic and topographic conditions and the logistics created by the site location. 9. Sample Preparation The selection of sample preparation procedures should be approved by the QP and should be appropriate to the material being tested, the elements being analyzed and should be subject to the security measures as stated above. All samples that are reduced or split should be processed in a manner that ensures that the fraction analyzed or tested is representative of the whole sample. Representative fractions of the material to be analyzed or tested should be retained for an appropriate period of time, as decided by the QP. Quality control checks and audits should be undertaken as determined by the QP. 10. Analysis and Testing Analysis and testing of samples must be done by accredited or recognized laboratories qualified for the particular material to be analyzed or tested. The selection of a laboratory, testing or mineral processing facility will be the responsibility of the QP. All analytical or test results must be supported by duly signed certificates or technical reports issued by the laboratory or testing facility and should be accompanied by a statement as to the methods used. The reliability of the analytical and testing results should be measured using the results of the quality control samples inserted in the process by the QP. file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (4 of 10) [ :33:10 AM]

5 11. Data Verification and Evaluation A program of data verification should be in place to confirm the veracity of the exploration results and how these results are entered into the database. The density of the exploration data should be critically assessed as to their ability to support qualitative and quantitative conclusions. 12. Interpretation A comprehensive and ongoing interpretation of all the exploration data should be undertaken to assess the results of the work. The interpretation and assessment of the program results at the end of each phase should determine if the program objectives have been met, should identify valid exploration targets and justify and plan further work. Any changes in working hypotheses should be recorded. 13. Resource and Reserve Estimation Establishing a resource and a reserve is a fundamental step in project development. The classification and categorization of these estimates must be done in accordance with National Instrument and be prepared by QP(s) with relevant experience. The methods and parameters used in making the estimate must be in accordance with the principles generally accepted in Canada and must be presented and justified with the estimate. Reserve estimates must be based on input and information from a multidisciplinary team including the QP(s). 14. Environment and Safety All field work should be conducted in a safe, professional manner with due regard for the environment and the concerns of local communities and be in compliance with regulatory requirements. Baseline environmental data, appropriate to the stage of the program, should be collected. 15. Reporting A comprehensive technical report signed by the QP(s) should be prepared on completion of a particular phase or stage of work following the GUIDELINES FOR TECHNICAL REPORTS DISCLOSING MINERAL EXPLORATION INFORMATION. Guidelines for Technical Reports Disclosing Mineral Exploration Information Preamble: These guidelines have been prepared to assist the Qualified Person ( QP ) in the preparation of technical reports disclosing exploration information. They are not prescriptive but are intended to indicate minimum requirements for technical reporting. The guidelines apply to all technical reports on exploration work. It is recommended that the QP prepare a report on the completion of a particular phase or stage of exploration work. file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (5 of 10) [ :33:10 AM]

6 Mineral exploration involves the application of concepts and ideas and the acquisition of factual data as well as interpretations based on these concepts, ideas and data. Reports of exploration information must be as factual as possible, but, by necessity, will include geological interpretations, projections and extrapolations based on the factual information being reported and on the experience of the QP supervising the data acquisition. It is essential for technical reports to discuss any exploration matters known to the QP, which might materially affect the reader s understanding of the information being reported or its reliability. Generation and interpretation of data pertaining to exploration information and preparation of technical reports are the responsibility of the QP. Interpretations must be reasonable and in conformity with the available data and MINERAL EXPLORATION BEST PRACTICES, and any assumptions made must be clearly stated. The information must be complete and not selective and negative results must be reported with the positive results to permit reasoned assessment by investors and others. 1. Title Page The title page should include the title of report, general location of the project, name of the QP(s) with professional designation and the effective date. 2. Table of Contents The table of contents should list the contents of the report including figures and tables. 3. Figures and Tables Maps, sections and tabulations of data shall be included to assist in understanding the exploration information being reported. Summary or compilation maps should be included in the text. All maps should be legible and clearly reproducible and have an astronomic north arrow, geographical coordinates, legend and title. Bar scales must be included on all plans (maps) and sections. All maps, drawings and diagrams that have been created by the QP and that are based on the work that the QP has done or supervised, must be sealed, signed and dated by the QP(s). Where information from other sources, either government or private, is used in preparing these maps or diagrams, acknowledgement should be given. 4. Summary The summary should include the objective of the program, a succinct description of the exploration work carried out, the results achieved, the interpretation thereof and the recommendations for future work. 5. Introduction/Terms of Reference This should include the identification of the corporate entity for whom the report was prepared, and the QP s mandate as well as the purpose and scope of the report. The extent of the QP s involvement including field and office time must be stated. A general description of sources and data should be included. Currency, units of measure and conversion factors should be specified. 6. Property Description file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (6 of 10) [ :33:10 AM]

7 A brief description of the mineral property being investigated is required including its location, size, access, infrastructure, climate and physiography. While the QP is not responsible for verifying tenure or ownership of the mineral rights, a listing of claim or concession numbers with the corresponding areas and current status should be provided. A summary of all agreements under which the mineral rights are held, including ownership, should be noted. The QP should state that the description of the mineral title in the technical report is not a legal opinion, but is a description of such title as understood by the QP based on written information provided by the corporate entity. The QP should quote or reference such information. 7. History A summary description of the exploration history including details of all relevant past work and results should be provided. Information on past production data and resource/reserve estimates, including criteria used, should be referenced. The QP should comment on the reliability of the historical data and whether resource/reserve estimates are in accordance with National Instrument If a reporting system other than National Instrument has been used, the QP should include an explanation of the differences and reliability. 8. Geological Setting A brief description of the regional and local geological setting should be provided. 9. Deposit Type(s) An explanation of the mineral deposit type(s) being investigated or explored for, the reasons for this exploration, and the geological model or concepts being applied in the investigation must be set out. 10. Property Geology and Mineralization A description and an interpretation of the property geology and mineralization based on historic and new data and supported by appropriate maps and cross sections should be provided. 11. Field Surveys Field surveys include geological, geophysical, geochemical, geotechnical and environmental surveys, trenching or other relevant surveys carried out by or under the supervision of the QP. Each of these surveys should normally be reported under separate sections. A description of the method(s) used and the reasoning for their use in light of the geological target must be set out. Descriptions of any equipment used, type of grid, data acquisition procedures and baseline work, sampling procedures and density, data processing methods, quality control programs, compilation procedures, and presentation method(s) must be included. There must be a discussion of the reliability or uncertainty of the acquired data. The relationship between the sample length and the true thickness of the mineralization must be stated, if known, and if the orientation of the mineralization is unknown, this must be stated as well. Location of the field information must be clearly shown on an appropriate file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (7 of 10) [ :33:10 AM]

8 base and the data presented with adequate scales and legends. Interpretation of the data in consideration of the original objectives is required, as well as conclusions and recommendations. If a separate report has been completed this should be referenced. 12. Drilling This section should provide a description of the type and extent of drilling that has been undertaken including procedures followed and a summary and interpretation of all results. The relationship between the sample length and the true thickness of the mineralization must be stated, if known, and if the orientation of the mineralization is unknown, this must be stated as well. Complete drill logs with core or sample recoveries must be included. All drill logs should accompany the report with cross sections depicting basic geology and drill hole data including correlations with surface geology and any nearby holes. If a separate report has been completed this should be referenced. 13. Sampling Method and Approach The type of sampling that has been undertaken including procedures followed must be described in this section and a summary of all samples collected, provided. A description of the sampling technique(s), and reason(s) for selection including information on sample spacing, sample size, and quality control and assurance programs should be stated. There should be a discussion and evaluation of sample quality, of whether the samples are representative or other factors that may have resulted in sample biases. This information can be reported under any relevant section. 14. Field Sample Preparation and Security A description of the field sample preparation methods and quality control procedures employed prior to dispatch to an analytical or testing laboratory, including the method or process of sample splitting and reduction must be provided. A statement as to the security measures taken to ensure sample integrity is required. 15. Analyses and Testing Procedures The names and locations of the analytical laboratories or testing facilities must accompany the reporting of the data. Sample preparation procedures prior to analysis/testing must be reported and the particular analytical/test methods and quality control programs used must be described. Copies of the original laboratory certificates must be available for verification from the corporate entity for whom the report was prepared. Certificates should be appended to the report where appropriate. Analytical or test data must be reported as received by the reporting entity. Results from different analytical or testing techniques should be reported separately. When analytical or testing data are reported in aggregated or composited form by calculating averages for more than one sample interval, the procedures used during aggregating, and the reasons therefore, must be described in detail. Analytical or test data should not be aggregated unless the methods used have equivalent accuracies. The choice of the intervals aggregated into a composite should be governed by appropriate geological and geotechnical considerations. file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (8 of 10) [ :33:10 AM]

9 16. Data Verification Describe what quality control steps and data verification procedures have been taken and the results obtained, to ensure that the technical data being reported are accurate and representative. 17. Mineral Processing/Metallurgical Testing Where mineral processing and/or metallurgical testing analysis has been carried out, results should be described including details on sample selection representivity and testing and analytical procedures. The source of this information should be referenced. 18. Other Relevant Data or Information Any and all additional information that lends clarity to, or supports the interpretations and deductions made, needs to be provided. A general rule is that data which are reported, must contain sufficient detail to allow a considered and balanced judgement of the significance of the results. Relevance and materiality are the overriding principles that determine what information should be publicly reported. 19. Resource and Reserve Estimates The reporting of resource and reserve estimates must be in accordance with the classifications, categories and definitions set out in National Instrument Care should be taken that there is no reporting of tonnage/volume and grade/quality estimates until there is sufficient information to permit classification of reported quantities at least as Inferred Resources. A description of the methods used in resource/reserve estimation must be set out. If a separate report has been completed this should be referenced. 20. Interpretation of Results This section should include results and reasonable interpretations of all field surveys, analytical/testing data and other relevant information. There must be a discussion of the adequacy of data density and reliability as well as any areas of uncertainty. 21. Conclusions This section should succinctly state the conclusions. The QP must show whether the completed program has achieved its original objectives and whether the quality and quantity of information are sufficient to support the conclusions. 22. Recommendation(s) Where further work is recommended by the QP, the objective, description of work, schedule and a detailed budget for the program must be presented. The detailed recommended work program should not exceed two phases that can be completed within a realistic time frame. The second phase should be contingent on the successful completion of the previous phase. 23. References The report must include a detailed list of all references cited in the report and any file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (9 of 10) [ :33:10 AM]

10 non-public report or other information referenced should be available from the corporate entity, for which the report has been prepared. 24. Certificate of Qualified Person(s) A certificate as set out in National Instrument , Section 8.1, must be provided for each QP. file:///e /www/pdac/pdac/members/communiq_copy(1)/guidelne.htm (10 of 10) [ :33:10 AM]