Compliant Exploration for JORC and CIM Definition Standards / NI Certification

Transcription

1 Compliant Exploration for JORC and CIM Definition Standards / NI Certification Dr Norman Lock Private Consultant norman.lock@yahoo.co.uk Presentation to CBMINA Belo Horizonte, August, 2014

2 Comply with What? Código de Mineração Brasileiro SAMREC JORC CIM Definition Standards (NI43-101) BM&FBOVESPA, JSE, ASX, TSX, AIM, etc. Financial & Funding Institutions WHY? Rules of the game Rules of the game $

3 Typical Problem Areas Broken audit trail Not representative (geology, grade, geotechnical) Contamination (grade) Database Definitive master copy Availability Up to date Accurate Contents

4 DEMONSTRABILITY The principle of demonstrability You must be able to demonstrate clearly that none of the mentioned problems exist, and that you comply with the applicable codes and regulations. Does the clear view above the clouds continue below??

5 Five Stages of a Project Stage 1 Excitement, Euphoria Stage 2 Disenchantment Stage 3 Search for the Guilty Stage 4 Punishment of the Innocent Stage 5 Distinction for the Uninvolved

6 What is a Bankable Project? Approved for bank financing by credit committee Feasibility (or pre-feasibility) study shows clear pay-back period with substantial debt tail The project is technically sound The project is what it seems -you will be audited!

7 Components of a Typical Feasibility Study Country environment Land tenure Financial environment Exploration data acquisition Environmental studies Geotechnical and hydrological investigations Socio-economic aspects Operating cost estimates Capital cost estimates Financial analysis Project risk analysis

8 Inherent Project Risk Technical risk Production risk Environmental risk Political risk Management risk Financial risk

9 Data Required for Feasibility Studies Drilling and sampling Assaying Surveying Geology Density data Geotechnical Metallurgical Environmental

10 Goals of Data Collection Compile relevant data as soon as possible Data will give the most likely outcome Data are demonstrably of high quality Data are easily accessible and inter-related Robust resource models Effective mine planning & production scheduling Project funding

11 Steps in Compliant Exploration Programs Planning Documentation Environment Geophysical Surveys Geochemical Surveys Surveying Field Mapping & Geology Trenching & Pitting Drilling Logging Sampling Assaying Bulk Densities Geotechnical Investigations Data Management Resources and Reserves

12 Compilation for Public Disclosure (Australia and Canada) ASX CP JORC TSX QP CIM/NI43-101

13 Comparison between Australia and Canada National Instrument is not a reporting code CIM Definition Standards is the equivalent of JORC Both JORC and CIM similar to CRIRSCO

14 Comparison between Australia and Canada However: JORC is required by ASX CIM is incorporated into NI NI is a legal document NI references CIM TSX references NI (and thus CIM)

15 Competent/Qualified Person JORC Minerals industry professional Professional Association membership (AusIMM, AIG, Recognised Professional Organisation) 5 years relevant experience Binding on AusIMM & AIG NI Engineer or geoscientist Professional Association membership (PGeo, PEng, Accepted Foreign Associations) 5 years relevant experience NB. MAusIMM excluded

16 Comparison between Australia and Comment: Canada JORC has no prescribed report format/template NI is well known for the report template But: JORC reports must include Table 1 Checklist as Appendix if not, why not

17 Comparison between Australia and Canada JORC Table 1 checklist Section 1 Sampling Techniques and Data Criteria Sampling techniques Drilling techniques Drill sample recovery Logging Sub-sampling techniques and sample preparation Quality of assay data and laboratory tests Verification of sampling and assaying Location of data points Data spacing and distribution Orientation of data in relation to geological structure Sample security Audits or reviews Section 2 Reporting of Exploration Results Criteria Mineral tenement and land tenure status Exploration done by other parties Geology Drill hole Information Data aggregation methods Relationship between mineralisation widths and intercept lengths Diagrams Balanced reporting Other substantive exploration data Further work Section 3 Estimation and Reporting of Mineral Resources Criteria Database integrity Site visits Geological interpretation Dimensions Estimation and modelling techniques Moisture Cut-off parameters Mining factors or assumptions Metallurgical factors or assumptions Environmental factors or assumptions Bulk density Classification Audits or reviews Discussion of relative accuracy/ confidence NI template 1. Summary 2. Introduction 3. Reliance on Other Experts 4. Property Description and Location 5. Accessibility, Climate, Local Resources, Infrastructure and Physiography 6. History 7. Geological Setting and Mineralisation 8. Deposit Types 9. Exploration 10. Drilling 11. Sample Preparation, Analyses and Security 12. Data Verification 13. Mineral Processing and Metallurgical Testing 14. Mineral Resource Estimates 15. Adjacent Properties 16. Other Relevant Data and Information 17. Interpretation and Conclusions 18. Recommendations 19. References

18 Mineral Resources JORC reasonable prospects for eventualeconomic extraction (could be long for bulk commodities) always a material matter, and must be explicitly disclosed and discussed technical and economic support for the cut-off assumptions CIM reasonable prospects for economic extraction assumptions must be presented explicitly Not in CIM Defn Stds but see Guidelines

19 Mineral Resources (Inferred) JORC sufficient to imply but not verify geological andgrade (or quality) continuity exploration, sampling and testing information CIM reasonably assumed, but not verified, geological and grade continuity limited information and sampling

20 Mineral Resources (Inferred) JORC Reasonably expectedthat the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration CIM Cannot be assumedthat all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration.

21 Mineral Resources (Inferred) JORC Confidence in the estimate of Inferred Mineral Resources is not sufficient to allow the results of the application of technical and economic parameters to be used for detailed planning in Pre-Feasibility or Feasibility Studies CIM Confidence in the estimate is insufficientto allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viabilityworthy of public disclosure. Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies

22 Mineral Resources (Inferred) JORC Caution should be exercised if Inferred Mineral Resources are used to support technical and economic studies such as Scoping Studies CIM Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic studies But allowed in NI Preliminary Economic Assessments

23 Mineral Resources (Indicated) JORC sufficient confidence to allow the application of Modifying Factors within a technical and economic study CIM confidence sufficient to allow the appropriate application of technical and economic parameters sufficient quality to support a Preliminary Feasibility Study

24 Mineral Resources JORC Categories must not be reported in a combined form unless details for the individual categories are also provided Mineral Resources must not be reported in terms of contained metal or mineral content unless corresponding tonnages and grades are also presented Mineral Resources must not be aggregated with Ore Reserves. CIM NI prohibits combining Inferred with Measured and Indicated NI is identical NI is identical

25 Mineral Resources JORC The words ore and reserves must not be used in describing Mineral Resource estimates as the terms imply technical feasibility and economic viability CIM NI (CP) > Use of Term Ore We consider the use of the word ore in the context of mineral resource estimates to be potentially misleading because ore implies technical feasibility and economic viability that should only be attributed to mineral reserves

26 Technical Studies (Scoping Study) JORC an order of magnitude technical and economic study of the potential viability of Mineral Resources Cautionary statements CIM Not defined BUT,NI defines a Preliminary Economic Assessment an economic analysis of the potential viability of mineral resources Cautionary statements

27 Technical Studies (Preliminary Feasibility Study) JORC comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined CIM comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, is established and an effective method of mineral processing is determined

28 Technical Studies (Feasibility Study) JORC comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of applicable Modifying Factorstogether with any other relevant operational factors and detailed financial analysis that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable) The confidence level of the study will be higher than that of a Pre- Feasibility Study CIM comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerationstogether with any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable) The confidence level of the study will be higher than that of a Pre-Feasibility Study

29 Exploration JORC An Exploration Target is a statement or estimate of the exploration potentialof a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnes and a range of grade(or quality), relates to mineralisation for which there has been insufficient exploration to estimate a Mineral Resource. CIM NI allows -potential quantity and grade, expressed as ranges, of a target for further exploration conceptual basis for determination is disclosed

30 Conclusions Comply with what? Problem areas Demonstrability Bankability and feasibility Project risk Data requirements Data collection for feasibility Steps in a compliant programme

31 Conclusions JORC similar to CIM Defn Stds (+NI43-101) JORC and CIM/NI linked to National Stock Exchange rules JORC requires Table 1 CIM/NI requires report template JORC: CP binding CIM/NI43-101: QP excludes MAusIMM JORC: Mineral Resources defined as "eventual extraction" JORC: Inferred are "reasonably expected" to convert whereas CIM: Inferred "cannot be assumed" CIM: prohibits combining Inferred with Measured and/or Indicated. JORC: requires full and clear disclosure

32 QUESTIONS? Dr Norman Lock Private Consultant Presentation to CBMINA Belo Horizonte, August, 2014