Last month, the Australian Securities Exchange (ASX) released its consultation paper on changes to the Listing Rules which will require enhanced disclosure of reserves and resources by listed resource companies. The Joint Ore Reserves Committee (JORC) has also released an updated JORC Code.
The intention of the changes is to ensure that sufficient information, regarding the technical parameters and assumptions underpinning reserves and estimates, are disclosed to enable investors to make informed decisions.
How will you be impacted?
Assuming no significant changes are made to the proposals in the consultation paper, mining companies will be faced with some key additional reporting requirements.
- When reporting results for the first time (or reporting a material change to previously announced results), mining companies must annex a report on an “if not, why not” basis, specifying the reasons for any deviations from the key criteria and assumptions listed in Table 1 to the JORC Code. The announcement itself must also summarise the material aspects of this report.
- Exploration reports must be accompanied by a table setting out drill-hole and intercept information on an “if not, why not” basis.
- Mining companies will now be able to report historical or foreign resource or reserve estimates (which previously required an ASX waiver) subject to certain conditions.
- Mining companies must provide all underlying material assumptions for longer-term projections of future production, and must also provide cautionary statements (which are to have equal prominence as the projection) where a proportion of those production targets includes exploration targets or inferred mineral resources.
Mining companies will need to take ASIC’s approach into account when reporting to the ASX and drafting disclosure documents. Although the ASX rules allow disclosure of production and exploration targets, ASIC has indicated it considers forward-looking statements, based on inferred resources, to be misleading unless the inferred resources are immaterial in the formation of the statements. Although the ASX is intending a 12 month transition period until the rules come into force, resource companies should consider acting now to ensure they are ready to comply with the new disclosure requirements.