- New reserves and resources reporting regime for listed mining and oil & gas companies.
- New requirements underpinned by the JORC Code and SPE-PRMS.
- Proposed 12 month transitional period.
- ASX is seeking comments on the proposed new Listing Rules and Guidance Notes by 26 October 2012.
On 18 September 2012, ASX released a Consultation Paper setting out proposed amendments to the ASX Listing Rules, and the associated Guidance Notes, applicable to reserves and resources reporting by ASX listed mining and oil & gas exploration and production companies.
The new reporting requirements follow on from the ASX Consultation Paper released in October 2011 ‘ASX Listing Rules Review Issues Paper: Reserves and Resources Disclosure Rules for Mining and Oil & Gas Companies’ and feedback received from 122 written submissions and 54 roundtables and consultation meetings.
In parallel to the ASX initiative, JORC has prepared a revised and updated JORC Code (Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves), which, together with the Petroleum Resources Management System (SPE PRMS)1 for oil & gas companies, will underpin the new requirements in the ASX Listing Rules. JORC is also currently consulting on its proposed revisions to the JORC Code, which is available on its website.2
For Mining Companies
Under the proposed new Listing Rules, mining companies will be required to report in accordance with the JORC Code (other than historical or foreign estimates of mineralisation) with new requirements for the disclosure of additional information triggered in relation to the reporting of:
- exploration results for material projects of the company;
- initial (or materially changed) estimates of ore reserves and mineral resources for material projects of the company; and
- historical or foreign estimates for material projects of the company.
The new disclosure requirements for reporting exploration results, estimates of ore reserves and mineral resources for material projects includes a requirement to append to the market announcement, on an ‘if not, why not’ basis, a report based on the relevant sections of Table 1 of the JORC Code. In addition, prior written consent from a competent person for the disclosure of the estimates and the supporting information will be required the first time the estimates (or materially changed estimates) are reported to the market. ASX proposes to streamline the competent person sign off process for subsequent disclosures of the same material.
New reporting requirements applicable to the reporting of longer term projections (greater than 2 years) of future production and associated forecast financial information for the company as a whole or for material projects are also proposed. Disclosing production targets and associated forecast financial information based on historical and foreign estimates of mineralisation and solely on an exploration target will be prohibited.
The supporting information that will be required to be disclosed for a production target includes the material assumptions, the relevant proportions of each of the categories of mineral resources and ore reserves, and any exploration potential, which underpin the production target and associated forecast financial information. ASX has proposed more onerous disclosure requirements for production targets and associated forecast financial information based on an inferred mineral resources and an exploration target.
For Oil & Gas Companies
Oil & gas companies will be subject to a number of general requirements applicable to all public reporting of petroleum resources to complement the requirement to report in accordance with SPE PRMS.
In addition, new requirements for the disclosure of additional information will be triggered in relation to the reporting of the initial (or materially changed) estimates of reserves, contingent resources and prospective resources for material projects of the company. Prior written consent from a qualified petroleum reserves and resources evaluator for the disclosure of the estimates and the supporting information will be required the first time the estimates (or materially changed estimates) are reported to the market. As with the sign off process for mining company disclosures, ASX proposes to streamline the qualified petroleum reserves and resources evaluator sign off process for subsequent disclosures of the same material.
In relation to disclosure of exploration and drilling information, ASX proposes to remove the guidance from Guidance Note 8 ‘Continuous Disclosure: Listing Rule 3.1’ which sets out the expectation that companies adopt a regime of structured reporting at regular intervals for each drilling programme following disclosure of progress in that programme under listing rule 3.1. As a result of removing this guidance, reporting on the progress of a drilling programme will only be required under the Listing Rules when the company expects the information to have a material effect on the price or value of its securities. Companies that voluntarily report on drilling progress must comply with the updated disclosure requirements contained in the proposed new Listing Rules.
ASX has also proposed to update the minimum professional qualifications and experience required to be recognised as a qualified petroleum reserves and resources evaluator for the purpose of preparing estimates of publicly reported petroleum resources and providing prior written consent for the disclosure of those estimates and the supporting information.
Annual reporting requirements
The existing quarterly reporting regime for reserves and resources reporting will remain and in addition, ASX has introduced a requirement to include a statement in the annual report which must include:
for mining companies –
- a summary of the results of the company’s annual review of its mineral resources and ore reserves;
- the company’s mineral resources and ore reserves holdings as at the company’s end of financial year balance date (or such other appropriate disclosed date);
- a comparison with the previous year’s holdings including an explanation of any material changes from year to year; and
- an explanation of the progress made in evaluating historical or foreign estimates of mineralisation so that they can be reported under the JORC Code, or if after 3 years, why those estimates have not been verified and reported in accordance with the JORC Code and what the company’s intention is with regard to verifying those estimates;
for oil and gas companies –
- the company’s reserves (1P and 2P) broken down into different criteria (such as product and geographical area);
- the proportion of reserves (1P and 2P) based on unconventional resources;
- a reconciliation of the company’s total 1P reserves and 2P reserves by product against that from the previous year with an explanation of any material changes;
- if reported, the company’s total and aggregated contingent resources (2C) broken down by certain criteria and a reconciliation of those resources against the previous year with an explanation of any material changes; and
- an explanation of why any material concentrations of undeveloped reserves in material projects have remained undeveloped after 5 years and the company’s intention as to their future development; and
- for both mining and oil & gas companies - a summary of the governance arrangements and internal controls that have been put in place with respect to its mineral resources and ore reserves or petroleum reserves (as applicable) and the estimation process.
ASX is proposing a 12 month transition period for companies to comply with the new reporting requirements following regulatory clearance for the amendments. ASX has not released details around the how the transitional period will work, whether there will be an ‘opt-in’ mechanism during the transition period or whether the new requirements will not be included in the Listing Rules until the end of the transitional period. We expect to hear more information about how the transitional period will work prior to release of the final Listing Rules and Guidance Notes. In the mean time, ASX is encouraging interested parties to express their views on the adequacy of the transitional period during the consultation period.
ASX is seeking comments on the proposed amendments to the Listing Rules and the draft Guidance Notes by 26 October 2012.