ASIC Position On Mining Companies’ Disclosure Of Production Targets

ASIC today released a public submission in response to issues papers recently released by the ASX and the Joint Ore Reserves Committee (JORC) on disclosure of mineral resources and ore reserves in which ASIC states its position on the level of certainty required for the disclosure of production targets.

The JORC Code provides a clear framework within which the level of geological certainty about minerals resources and ore reserves can be reported. The use of production targets in fundraising, market announcements or control transactions, without sufficient geological certainty having been established, can lead to the market being misled.

While exploration targets and inferred mineral resources under the JORC Code - as opposed to more certain mineral resources and ore reserves - are important to disclose, they are too uncertain to provide reasonable grounds for a production target or statement implying economic viability, according to ASIC.

‘Ensuring market integrity means public disclosures by companies must not be misleading,’ ASIC Deputy Chairman Belinda Gibson said.

‘When companies make production targets public, investors should be confident that they are based on reasonable grounds and they are likely to be achieved. Where production targets are based on an inferred mineral resource alone, the low level of geological certainty of the resource means that an investor cannot rely on the target.’

Download ASIC's public submission

Background

• An inferred mineral resource is a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence: clause 20.
• An exploration target is a statement that is conceptual in nature where there has been insufficient exploration to define mineral resources or ore reserves: clause 18.