Your Cheat Sheet for the New JORC Code Updates

The Joint Ore Reserves Committee (JORC) has initiated an update to the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code), which has not been updated since the last version was released in 2012.  A consultation draft of the updated JORC Code (together with the draft Guidance Notes and ‘Table 1’) was released on 1 August 2024 for public feedback.

In this article, we provide a summary of the proposed changes and next steps.

JORC Code

The JORC Code is a professional code of practice that sets minimum standards for public reporting of exploration results, mineral resources and ore reserves.  The JORC Code is incorporated into the listing rules of the Australian Securities Exchange (ASX) and compliance is therefore mandatory for all ASX-listed mineral exploration, development and production entities.

While the proposed updates to the JORC Code are not yet binding, it is important for entities and their advisers to be aware of the potential changes.

Proposed Key Changes

While there are many elements of the JORC Code that have been updated, the JORC has identified six key areas with notable changes.

Structure and Format

1. It is proposed that the JORC Code will be re-structured, to align with the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) template¹ (international reporting template for the public reporting of exploration targets, exploration results, mineral resources and mineral reserves – November 2019).
2. The structure and formatting of various sections have been changed to improve readability and provide additional clarity of requirements.
3. The guidance elements included in the 2012 JORC Code will also be extracted to an external ‘guidance notes’ document.
4. Table 1 will be available as an editable Word and Excel document.

Competence and Responsibility

5. There are a number of changes designed to improve transparency and disclosure by “competent persons”. This includes, amongst other things:
   1. a new requirement to upload a “CV of record”, complete an online induction into the new JORC Code and include a summary statement of experience to the relevant public report; and
   2. a change to the competent person definition regarding “relevant experience in” which has been updated to “experience relevant to”.²
6. There will also be new clauses allowing the competent person to rely on “specialists”.
7. There will also be a clarification of competent person versus company responsibilities.

Reasonable Prospects

8. Changes to improve disclosure surrounding reasonable prospects, including:

• 1. removal of the word ‘eventual’ and change to ‘reasonable prospects for economic extraction’;
  2. clarification that modifying factors apply throughout a project lifecycle and should be assessed with more detail as a deposit/project develops from exploration target through to mineral resources and at prefeasibility study / feasibility study level of ore reserves;
  3. addition of the requirement for a ‘reasonable prospects assessment” of the modifying factors to be completed by the competent person as a process of assessing if a deposit has reasonable prospects;
  4. inclusion of ESG criteria within Table 1, Section 5 modifying factors that need to be addressed when assessing reasonable prospects of economic extraction (RPPE); and
  5. additional requirements to justify on an ‘if so, why so’ basis all assumptions used in assessing RPEE and disclose against the criteria listed in Table 1.

ESG

9. There are also several ESG related updates, including a requirement to disclose material ESG considerations “as appropriate” to the study stage from exploration results to closure.

Opportunity and Threats Reporting

10. The new JORC Code will include an additional section and clauses related to opportunities and threats which the competent person will be required to disclose (e.g., in relation to exploration targets, mineral resources and ore reserves).

Reconciliation

11. The new JORC Code (and guidance note) will also include a new section and clauses relating to the reconciliation of production to reported estimates.

Devil in the details

Other than the headline changes, the updated JORC tables also looks set to introduce specific reporting requirements for royalties, litigation, permitting and rehabilitation guarantees concerning mineral resources or ore reserves. If these changes are brought into effect, it is likely that reporting entities will need to be up to date in their legal diligence ahead of disclosing mineral resource estimates or ore reserves, or run the risk of misleading the market.

Next Steps

Feedback on the draft JORC Code will close on 31 October 2024 with a final draft being released in late 2024.  It is currently expected that the new JORC Code will be released in 2025.

As noted, the JORC is seeking comment from stakeholders via an online survey ahead of the final review and update of the JORC Code. The JORC is also hosting engagement events, which the ASX encourages all listed entities in the resources sector to attend, as well as completing the online survey.

The survey (which will be available until 31 October 2024), proposed changes and events lists are available here.

If you need any further information, please reach out to our national capital markets practice, which are market leaders across the industry.

For more information, please contact Jeremy Newman or Benny Sham.

¹International Reporting Template for the public reporting of Exploration Targets, Exploration Results, Mineral Resources and Mineral Reserves – November 2019.

²The current drafting states “A Competent Person must have a minimum of five years relevant experience in the style of mineralization or type of deposit under consideration and in the activity which person is undertaking.”