05/10/2011 - 11:40

ASX considering stricter mining disclosure

05/10/2011 - 11:40

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The Australian Securities Exchange is evaluating stricter rules for the disclosure of reserves and resources by listed mining and oil & gas companies, in order to align Australian standards with international practice.

The ASX has released a consultation paper, saying it was “responding to stakeholder interest in improving the standards of public reporting of reserves and resources”.

It has called for comments from all interested parties, saying the review was aimed at promoting confidence in resources and reserves reporting, reducing the potential for such information to mislead the market and ensuring it aligns with best practices in other countries.

"The reporting requirements and standards applicable to reserves and resources are integral to company reporting in the mining and oil and gas industries as a large proportion of the material announcements ... include reserves and resources information," the ASX said in a statement.

Under the JORC resources sector reporting code, reserves are mineral or hydrocarbon deposits that have been proved-up through drilling and are a higher category than resources.

The review also was aimed at promoting greater efficiency in the capital formation process for listed mining and oil & gas companies, the ASX said in a statement.

Combined, listed mining and oil & gas companies represent about 32 per cent of the total equity market capitalization of listed companies.

By number, they are even more significant: the 830 mining and exploration companies, and the 130 oil & gas companies, represent 45 per cent of all ASX-listed companies.

The guiding principles for the review include that “greater international alignment and harmonisation should be pursued where feasible and appropriate”.  

Key issues examined in the discussion paper include whether particular drill-hole and intercept information should be disclosed, and whether the current requirement for “proximate cautionary statements” should be applied more strictly.

It also examines whether a preliminary feasibility should be required to support an initial ore reserve determination, “in order to provide for greater international harmonisation”.

Another issue is whether companies should have to disclose the assumptions underpinning any production target.

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