Miners warned to clearly report on reserves

The ASX has warned mining companies not to mislead investors and ensure they are completely transparent in reporting mineral resources and reserves.

ASX chief compliance officer Ken Lewis said new laws introduced in December 2013 to provide more accurate and reliable investment information had experienced teething problems, and that inadequate reporting by some companies was “effectively creating reserves” on paper, Courier Mail reported.

“Some companies are not disclosing the relevant proportions of resources and reserves underpinning the target,” Lewis said.

“They are leaving out the required cautionary statement if a proportion of the target is based on an inferred resource.”

The 2013 rules state that resource companies must provide the most recent results with information about drilling, sampling and assay techniques as well as verification, however information about unproven reserves was causing companies to fall short of those requirements.

Lewis also said that cautionary statements were not displayed prominently enough on disclosure documents, and that hiding such information in footnotes and elsewhere was not acceptable.

Lewis did not name companies who had failed to fully and adequately inform investors.

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