AusIMM board director René Sterk discusses the impact of the JORC Code, clears up some of its misconceptions and details the importance of education in this space.
The Joint Ore Reserves Committee (JORC) has been an integral part of the Australian mining industry since its inception in 1971.
JORC was originally made up of members from parent organisations, the Minerals Council of Australia (MCA), the Australian Institute of Geoscientists (AIG) and the Australasian Institute of Mining and Metallurgy (AusIMM).
It was created out of a need for improved accuracy and accountability by miners in response to the Poseidon NL stock market bubble of 1969.
Poseidon’s discovery of the Windarra nickel deposit near Laverton, Western Australia, sparked an investor frenzy that saw the company’s share price rise from $1 in September 1969 to $280 in February 1970. When results from the deposit proved to be disappointing, a ripple effect ensued across the mining market.
“It was quite a catastrophe and this was how the code came into being,” says René Sterk, founder of RSC Consulting and AusIMM board director.
“It basically created a system of control and accountability so that announcements for investors and potential investors would have all the facts and information. It forced miners to be transparent.”
Poseidon’s mishap is included as a case study in an online course developed by AusIMM designed to teach people about JORC. The Online professional certificate in JORC Code reporting incorporates six modules over eight weeks. The course discusses not only the importance of the code within the context of the minerals industry and how best to interpret its results, but also clears up some of the misconceptions surrounding its use.
Primarily, the code is designed to provide a mandatory system for the classification of exploration results, resources and reserves through the lens of transparency, materiality and competence.
AusIMM is also developing a second shorter iteration of the course for company directors, investors and executives to understand the basics of the code in the context of appropriate public reporting.
Given the code’s ubiquitous nature, some misconceptions surrounding its aims have arisen over time. Sterk says the code is sometimes misinterpreted as a stamp of quality for operations, which can lead to potential misunderstandings. It is often used for reporting on international operations outside Australasia, such is the renown of the code.
“People talk about things such as JORC resources or JORC drilling — evoking the ‘JORC brand’ if you like — to lend some of the technical work that was done with more credibility,” he explains. “It’s a way to report your findings, not a way to describe the quality of your work.”
In this vein, the course examines how to maintain quality control standards when publicly reporting competent persons’ findings.
Competent persons are defined in clause 11 of the latest JORC Code (2012) as members or fellows of the AIG, AusIMM or other recognised professional organisations with a “minimum of five years’ relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking”.
Sterk identifies an industry issue wherein competent persons’ statements, whether they be managing exploration or mineral resource results, are reinterpreted in company investor releases and marketing documents by managing directors or PR, often without the input of the competent persons involved.
“There’s a difference between a public announcement and a technical document in that we need to be very careful that the competent persons are included in that process of making a public announcement,” Sterk says.
“It can lead to awkward situations where the competent person is simply not aware that their name has been included in a public announcement. Things come off the rails pretty quickly if some slightly non-transparent comments are made and the competent persons gets into trouble.”
The first intake of the course — angled primarily towards technical resources professionals — took place in October last year. The next course is scheduled for next month.
Response to the course has so far been overwhelmingly positive, according to Sterk.
“We had an incredible 98.4 per cent completion rate and a 9.8 out of 10 course satisfaction rate so that’s pretty staggering,” says Sterk.
“We have really been able to identify where upskilling needs to happen.”
This article also appears in the March edition of Australian Mining.