Your Guide to the 2024 draft JORC Code – do the proposed changes go too far?

However, as discussed in this note, it is possible that concerns from participants and representative bodies within the industry – about the extent of some of the proposed changes – may challenge this timing.

The JORC Code

As readers will know, the Australasian Code for Reporting of Exploration Targets, Exploration Results, Mineral Resources, and Ore Reserves (the JORC Code) – authored by the voluntary Joint Ore Reserves Committee (JORC) of the Australasian Institute of Mining and Metallurgy (AusIMM), Australian Institute of Geoscientists (AIG) and Minerals Council of Australia (MCA) – establishes the minimum standards, recommendations, and guidelines for the public reporting of Exploration Results, Mineral Resources and Ore Reserves in Australia and elsewhere where the Code is applied.

The JORC Code seeks to provide a comprehensive framework for classifying these publicly shared results, based on principles of transparency, materiality, and competence, to ensure that investors and the market are reliably informed. Importantly, the ASX Listing Rules require listed entities to comply with the JORC Code in reports about the orebodies underpinning their mines and development projects.

The current edition of the JORC Code - published in 2012 – has served as the benchmark for mineral reporting in Australia and south east Asia for over a decade, and the current review and update process is intended to ensure that the Code remains comprehensive and in-line with current best practice.

The review

The release of the Draft JORC Code follows an extensive review and consultation process which commenced in 2021, with over 500 stakeholders participating in identifying key areas for review. It is important to note that the amendments made in the Exposure Draft JORC Code are only proposed changes at this stage; they are subject to further review and sign-off.

Following the closing of the stakeholder feedback period, JORC will prepare a final draft for approval by the relevant industry bodies (MCA, AusIMM and AIG), and also the ASX. Once approval is obtained, the Draft JORC Code will be recommended to ASIC for Ministerial approval.

As noted, the final revised JORC Code is currently planned to be published by JORC in 2025, with a 1-year transition period before reporting under the new version of the Code becomes mandatory.

What are the changes?

Broadly, the Draft JORC Code seeks to enhance the level of detail expected to be included in public reporting of Exploration Results, Mineral Resources and Ore Reserves. Some of the key relevant changes in the Draft JORC Code are as follows:

Structure and Format

The Draft JORC Code now comprises three separate documents:

Draft JORC Code;
Draft JORC Code – Table 1; and
Draft JORC Code – Guidance Notes.

Whereas the 2012 JORC Code comprised a single document, the Draft JORC Code can now be read solely for the mandatory reporting requirements, accompanied by the separate Guidance Notes as needed.

Additionally, Table 1 - which sets out factors required to be considered when determining economic viability - has been extracted from the body of the Code and restructured to align with the internationally recognised CRIRSCO (Committee for Mineral Reserves Interactional Reporting Standards) template.

Entities that are required to report on Exploration Targets, Exploration Results, Mineral Resources and Ore Reserves (for example, under ASX Listing Rules 5.7 to 5.9) must ensure they have addressed all the necessary aspects in Table 1 of the JORC Code, which is now provided in two forms:

a checklist (for ‘Competent Person’ documentation); and
a template format for Public Reports.

Under the Draft JORC Code, entities can report against Table 1 in either document format within the relevant Public Report, but must address all criteria on an “if not, why not” basis.

Both formats introduce an additional column - ‘Checklist’ and ‘Table 1 Documentation Checklist’ respectively - which JORC strongly recommends is completed to ensure the commentary on specific criteria can be easily located within the relevant Public Report.

Competent Persons

Any public reporting of Exploration Results, Mineral Resources or Ore Reserves must be based on and fairly reflect documentation prepared by a Competent Person in accordance with the JORC Code.

The Draft JORC Code refines the definition of ‘Competent Person’ by including an additional requirement for a Competent Person to have a minimum of 5 years of experience relevant to the activity which that person is undertaking. This requirement is additional to the existing requirement for a Competent Person to have at least 5 years’ experience relevant to the style of mineralisation or type of deposit under consideration. This further 5-year experience requirement will be, on its face, difficult to meet for new or emerging ‘Competent Persons’, if narrowly construed. Our assumption is that, if an existing/experienced ‘Competent Person’ is being supported by another expert in preparing a Public Report, that support will be recognised for the purpose of ‘clocking up’ the necessary 5 years’ experience to meet this new additional criterion.

The Draft JORC Code also proposes additional administrative requirements for a person to act as a Competent Person:

They must submit a dated CV of Record, in English, outlining their area(s) of practice to the JORC website;
They must complete an online induction into the current version of the JORC Code and provide a record of the same; and
They must provide a declaration of their current membership of a recognised/relevant ‘Professional Organisation’.

Specialists

One of the more significant amendments proposed by the Draft JORC Code is the introduction of the ‘Specialist’ role. Under the Draft JORC Code, a Competent Person may rely on an appropriate Specialist (or another Competent Person) where they do not have the necessary specialist expertise on required content for a Public Report. This means that a Public Report may include information from multiple Competent Persons and Specialists.

It is proposed that a Specialist must be:

a qualified professional with a minimum of 5 years of contextual experience relevant to the project type being reported; and
a member of a relevant Professional Organisation (e.g. AusIMM) that has enforceable ethics and disciplinary processes.

Importantly, a Competent Person is intended to retain responsibility for critically reviewing a Specialist’s documentation and ensuring that documentation is reported in a way that is not misleading or deceptive. If utilised, a Specialist will be required to provide written consent to the issue of a Public Report in the same manner as a Competent Person (using the Consent Form provided in Appendix 3 of the Draft JORC Code).

Modifying Factors

It is common knowledge that escalating environmental, social and governance (ESG) expectations have affected risks involved in resource development projects (see AusIMM Bulletin, March 2024).

Accordingly, it may come as no surprise that the Draft JORC Code proposes to include additional detail and clarification surrounding ‘Modifying Factors’ (particularly the requirement for their application throughout a project lifecycle), and therefore includes new additional ESG criteria within Table 1 (regarding Modifying Factors that need to be addressed when assessing Reasonable Prospects for Economic Extraction (RPEE)). This proposed addition reflects a trend in some other jurisdictions (e.g. Canada, South Africa) to similarly bolster their equivalent resources/reserves reporting codes.

The Draft JORC Code also proposes a requirement for a Competent Person to undertake a ‘Reasonable Prospects Assessment’ of these expanded Modifying Factors as part of the process for assessing whether a deposit has ‘Reasonable Prospects’ (as defined in the JORC Code).

Our understanding is that these proposed additional requirements, centred on ESG factors, are causing concern among some mining and exploration industry bodies. This is on the basis that the inclusion of such factors for consideration by a Competent Person may be extending the JORC Code beyond its intended function, and overlapping with the relevant entity’s governance and other obligations to consider and manage ESG risks. Our sense is that this set of proposed changes, and the extra responsibility that it imposes on a Competent Person, may be a key ‘sticking point’ in ensuring that the updated Draft JORC Code secures broad acceptance across the industry. An alternative, compromise approach might be for the Competent Person to be required to make a determination on RPEE that assumes and records a set of outcomes on ESG factors that would not materially add to the costs of development and mining of an orebody. It will be interesting to see the landing that is reached by the industry on this issue.

Reconciliation of estimates

In order to address the lack of requirements regarding the reconciliation of estimates as against performance results, the Draft JORC Code also proposes to include a new clause which would require disclosure of:

an update to a prior published estimate (such as a Mineral Resource and/or Ore Reserve estimate); or
the reconciliation of the mined part of an estimate to the mine production results.

Such a requirement would bring the Code into alignment with the existing requirement under ASX Listing Rule 5 (see ASX Listing Rules 5.9 and 5.11-5.17) for comparison of mineral resources and ore reserves.

Risk: Opportunities and Threats

Finally, the Draft JORC Code proposes to include a new section related specifically to risks, opportunities, and threats. This section seeks to impose a further requirement on Competent Persons to report a balanced assessment and analysis of the potential effects, and likelihood of impacts, on the technical or economic viability of Exploration Targets, Mineral Resources and Ore Reserves, including identifying those threats that are material. This could present a significant extra burden for Competent Persons, leading to increased time and cost for their services and reports. Again, our understanding is that there is some concern amongst industry groups about this potential extra cost, and the associated question of whether this additional level of disclosure is an overstep for public listed entities (in light of existing continuous disclosure and periodic reporting obligations).

Implications

For entities involved in the minerals exploration and mining sector, this proposed modernisation of the JORC Code is a significant development. The amendments have the potential to be a key focus area for mining/exploration companies, and especially the Competent Persons who are required to provide competent person sign-offs. Given the ambit of the proposed changes, we expect that any substantive changes implemented would be followed by amendments to the ASX Listing Rules to incorporate the revised JORC Code – we assume these would be addressed through the transition period following finalisation of the revised JORC Code.

How we can help

The public consultation period on the Draft JORC Code is open until 31 October 2024.

KWM regularly advises listed clients in relation to compliance with the JORC Code, particularly in the context of their ASX Listing Rule Chapter 5 disclosure obligations. We will continue to monitor developments in relation to the Draft JORC Code, and note that industry bodies like AMEC are holding forums and seeking input from the industry, including for the purposes of preparing submissions to JORC.

JORC has published several documents to aid investors and industry participants in understanding the proposed amendments, including publishing its own summary of the proposed changes. The materials published by JORC can be found here.

The public consultation period is the time for stakeholders to provide their input and feedback on the proposed changes. If you would like to submit feedback to JORC directly, you can do this via their online survey (which can be accessed here). Alternatively, please reach out to one of our contacts if KWM can assist you with preparing submissions and/or feedback to JORC.