The updated South African Code for the reporting of Mineral Resources and Mineral Reserves – SAMREC 2007 – is currently being incorporated into the listing rules of the JSE.
SAMREC working group chairperson, BHP Billiton’s Matt Mullins tells Mining Weekly that it is expected that listed mining companies on the JSE will approve the incorporation of SAMREC 2007, and that it will form part of the exchange’s listing rules by the end of the year.
The code is designed for public reporting of exploration results, mineral resources and mineral reserves.
The aim of the code is to inform investors or potential investors and their advisers.
The revision of SAMREC started in 2004, and in May and June, the Geological Society of South Africa (GSSA) and the South African Institute for Mining and Metallurgy (SAIMM) approved the updated code.
The three principles of the rewritten code – materiality, transparency, and competence – act as a shield, protecting the investment community from misleading information concerning the evaluation and reporting of mineral resources and reserves.
Mullins says that SAMREC 2007 is being published at a time when the mining industry is undergoing an unparalleled sustained boom.
“Providing confidence to investors in mining companies concerning the resources and reserves in which they are investing is more important than ever.
“These resources and reserves underpin the value of the industry,” he adds.
Mullins points out that the mining industry has changed significantly since the publication of the first SAMREC code, in March 2000.
In the last seven years, the industry’s global market capitalization has increased more than fivefold from under $200-billion in 2000 to more than a trillion dollars in 2007.
The total market capitalisation of the mining sector listed on the JSE, including secondary listings, is R2,2-trillion or about $300-billion.
This means that a third of the global market capitalisation of the resources industry is tradeable on the JSE.
The SAMREC update initiative
More than a hundred professionals were involved in the updating of the original SAMREC code.
The working group was organised into subcommittees to investigate mainly commodity-specific reporting requirements, and to look at specific requirements for the update.
A key requirement was the full investigation of international reporting developments in the last six years.
The SAMREC team took into account the progress made in the widespread adoption of consistent reporting standards worldwide.
These standards are embodied in codes, guidelines and standards published and adopted by the relevant professional bodies worldwide, such as the Canadian Institute for Mining, Metallurgy and Petroleum (CIM standards) and the Australian Institute of Mining and Metallurgy (the JORC code).
Every subcommittee chairman was required to form a subcommittee drawn from as wide a range of industry people as possible, such as large mining groups, small mining groups and consultants.
In addition, a number of key industry forums were represented, ranging from the Department of Minerals and Energy to the JSE Ltd.
“I am pleased that all industry representatives played a key role in the update of the code.
“Of particular importance is the JSE, which is the code’s major client,” Mullins says.
In summary, the changes incorporated into SAMREC 2007 include an improved format; the addition of a definitions section; the recognition of professionals abroad as competent persons; tightening up the use of inferred resources; improved explanations for resources; a minimum level of study to declare reserves; recognition of the fact that, while the code is principles-based, it does contain some prescription; and the development of a definitive brand.