BACKGROUND TO JORC.

In Australia in the late 1960s there was considerable concern about unacceptable reporting practices associated with the so-called Poseidon nickel boom and bust in Western Australia. Responding to the resulting challenge and opportunity to self-regulate, the Australian Mining Industry Council, now the Minerals Council of Australia (MCA), established a committee to examine the issue. It was promptly joined by The Australasian Institute of Mining and Metallurgy ( The AusIMM), resulting in the formation of the Australasian Joint Ore Reserves Committee (JORC). The Australian Institute of Geoscientists (AIG) became JORC's third parent body in 1992. Other organisations represented on JORC are the Australian Stock Exchange (ASX) and the Securities Institute of Australia (SIA). JORC was established as a permanent committee, and has been in continuous existence since 1971.

Between 1972 and 1989, a number of reports were issued by JORC which made recommendations on public reporting and Ore Reserve classification and which gradually developed the principles now incorporated in the JORC Code. The recommendations had the status of guidelines only, but were over time gradually adopted by most Australasian mining and exploration companies. The core concept on which the Code is built, the Competent Person, was introduced in JORC's first publication in 1972.

In February 1989, JORC released the first version of the JORC Code. Apart from updating and improving on previous documents and formally introducing into Australasia the concept of Mineral Resources as the pre-cursor to Ore Reserves, the 1989 publication differed from those preceding in two critical ways. It was immediately incorporated into Australian Stock Exchange (ASX) listing rules, thereby becoming binding on companies listed on the ASX and it was also immediately adopted by The AusIMM as an Institute Code, and therefore became binding on members of The AusIMM. Through these processes, it became mandatory for both individuals and companies to conform with the Code and this has been the dominant factor underpinning its success. It was adopted as an AIG Code in 1992 and, in the same year, was incorporated into New Zealand Stock Exchange (NZX) listing rules.

Guidelines to the JORC Code were published in 1990 and the combined Code and Guidelines were revised in 1992, 1993, 1996 and 1999, and a further revised version was released on 17 December 2004.

The JORC Code is now well accepted in Australasia, and in recent years it has been used both as an internal reporting standard by a number of major international mining companies, and as a template for countries in the process of developing or revising their own reporting documents, including the United States of America, Canada, South Africa, and the United Kingdom/Europe, Chile and Peru.

The purpose of the JORC Code is to provide a minimum standard for reporting of exploration results, Mineral Resources and Ore Reserves in Australasia, and to ensure that public reports on these matters contain all the information which investors and their advisers would reasonably require for the purpose of making a balanced judgement regarding the results and estimates being reported. It achieves this by :-

· establishing and prescribing the minimum standards for public reporting of Exploration Results, Mineral Resources and Ore Reserves in Australasia;
· setting out a system for the classification of tonnage (or volume) and grade (or quality) estimates as either Mineral Resources or Ore Reserves and for the subdivision of each into categories which reflect different levels of certainty or confidence;
· specifying the qualifications and experience required for a Competent Person;
· setting out the responsibilities of the Competent Person and companies' Boards of Directors with regard to reporting of Exploration Results, Mineral Resources and Ore Reserves, and
· providing a summary list (Table 1 - Assessment Criteria) of the main criteria which Competent Person(s) and others should consider in the course of preparing reports on Exploration Results, Mineral Resources and Ore Reserves.

The JORC Code does not regulate the procedures used by Competent Persons to estimate and classify Mineral Resources and Ore Reserves, nor does it regulate companies' internal classification and/or reporting systems.

The principles of the JORC Code are summarised in Clause 4 of the 1999 Code as Transparency, Materiality and Competence. Transparency requires that a public report contains sufficient information, the presentation of which is clear and unambiguous, so that a reader is able to understand the report and is not misled. Materiality requires that a public report contains all the relevant information which a reader could reasonably be expected to need in order to make a balanced judgement about the matters being reported. Competence requires that the public report is based on work which is the responsibility of a suitably qualified and experienced person who is subject to an enforceable professional code of ethics, that is, that public reports are based on work undertaken or supervised by a Competent Person.

Reasons for the success of the JORC Code in Australasia include :-

· the regulatory backing;
· the intentional avoidance of overly prescriptive definitions and operational requirements;
· industry's ability and willingness to discipline Competent Persons;
· the origins of the Code;
· the nature and composition of the Joint Ore Reserves committee, and
· JORC's commitment to communication and to on-going revision of the Code.