Current rules for resource disclosure in the mining industry owe their advent to the Poseidon bubble that was triggered by the discovery of a nickel deposit by exploration company Poseidon NL in Western Australia in September 1969.
At the time, Poseidon shares had been trading at A$0.80 each and peaked at A$280 each in February 1970.
As a result, the Australian government established the Rae Committee, which, in 1974, recommended changes to the regulation of stock markets that led to Australian securities legislation. Ironically, the deposit subsequently became a mine that operated for a number of years.
The Joint Ore Reserves Committee (JORC) was established in 1971 and sponsored by the Australian mining industry. JORC comprises representatives of the Mineral Council of Australia, Austral/Asia Institute of Mining and Metallurgy, Australian Institute of Geoscientists, Australian Stock Exchange, Financial Services Institute of Austral/Asia and the accounting profession. The JORC Code was imposed as a mandatory system for classification of minerals, exploration results, mineral resources and ore reserves according to the level of confidence in the geological knowledge, and technical and economical considerations for public reporting. The JORC Code was first published in 1989 and is incorporated in the listing rules of the Australian and New Zealand stock exchanges. The JORC Code was the first to set out in detail the requirements for disclosure on mining properties and was the genesis for a number of codes that have adopted its concepts in countries around the world.
The world of mining disclosure is gradually converging because of the efforts of organisations such as CRIRSCO, JORC, SAMREC, CIM and the application of regulators such as the Canadian Securities Administrators and stock and securities exchanges such as AIM, Toronto, Hong Kong, Australia and emerging exchanges in South America and Asia.
In time, one expects that disclosure will be common and yet still allow for local rules and regulations unique to each jurisdiction.
Brian E Abraham, partner at Dentons Canada LLP, provided the above commentary. For those interested we suggest reading the full report, titled ‘Global Mining Resource Disclosure‘, which was originally published by Lexology.