JORC Code
From IntFX
The JORC Code outlines:
- The difference between pre-resource mineralisation, identified Mineral Resources and Ore Reserves.
- The economic constraints which must be applied to estimating Ore Reserves.
Known as the Joint Ore Resources Committee, the JORC is a professional organization which monitors the movement and regulation of the resources market in Australasia. Set up as a reaction force to the unacceptable reporting practices during the Poseidon nickel boom-and-bust in Australia , JORC continued its mandate as a regulating body with the usual action of reporting the trends of the resources market and making recommendations on public reporting and ore reserve classification. These gradually evolved to the principles now included in the JORC Code.
The JORC code was initially made under the principle of a number of guidelines. However, as more Australian exploration companies adopted the code, JORC has become a relevant organization on critical ore reserve and mineral issues until today. Its first successful acknowledgement on its relevance to the resources market happened in 1989 when the Australian Stock Exchange imposed the JORC code on its listing rules. In this way, all companies listed in the Australian Stock Exchange are bound under the JORC code. It also became binding after the AusIMM (Australian Institute of Mining) adopted it as an institute code. In 1992, AIG (Australian Institute of Geoscientists) also adopted the JORC code followed by the New Zealand Stock Exchange in the same year. This structural alignment of major stock markets and institutions under the JORC gave the code the ascendency for exhaustive guidelines of the valuable resources market.
The acceptance of the JORC code in Australasia as the reporting standard for major mining companies gave precedence for other international mining companies to follow suit. Eventually, other countries such as the United State, Canada, South Africa, and United Kingdom borrowed principles from the JORC code and made the code the template for their own reporting codes that apply to their national industries.
Purpose for the JORC Code
The main objective of the JORC code is to provide standards and guidelines for reporting details on mineral explorations and discoveries of the mineral resources and ore reserves in Australia. These reports usually contain the information as the basis for investment decisions. Therefore the JORC code puts the accountability on exploration companies to provide accurate information to generate a level playing field.
The purpose of the JORC Code is achieved by setting a minimum standard for public reporting for the results of exploration. The JORC code is also applied in classifying and validating measurements in a consistent manner. This way, all measurements are standardized which minimizes the variance in perception on such a quantitative data.
JORC reporting must be prepared by a “Competent Person” with appropriate qualifications and experience, and JORC reporting must be accompanied by a statement from such person. The JORC code outlines the required qualification and experiences of the Competent Person.
Furthermore, the JORC code puts the leadership of mining companies under responsibility if such misleading and inaccurate public reports are found.
The JORC code’s success is attributed by many factors. Yet the most important factor is that it has achieved regulatory status that gives the code more capabilities to establish a level playing field. Its mandate continues as a standard followed by the international investor community.
