Client Update: Changes to reserves and resources disclosure rules
24 September 2012
In brief: Proposed new disclosure rules will affect the way mining and oil and gas companies report on their reserves and resources. The proposals seek to strike a balance between providing meaningful information to investors about listed entities' reserves and resources assets while managing compliance costs for listed companies. Partner Ted Hill (view CV) and Lawyer Lachlan Clancy report.
The Australian Stock Exchange (ASX) and Joint Ore Reserves Committee (JORC) review of reserves and resources disclosure rules for mining and oil and gas companies has taken an important step forward with the Draft ASX Listing Rules and Guidance Notes for Enhanced Disclosure and the Exposure Draft of the JORC Code (2012) being released simultaneously on 18 September 2012.
The release of the proposed changes to the reporting of reserves and resources follows a two-year consultation process involving industry groups, investor groups and other interested parties. According to the ASX, the proposed changes will implement an enhanced principles- and disclosure-based regime that seeks to strike a balance between providing meaningful information to investors about listed entities' reserves and resources assets while managing compliance costs for listed companies.
If implemented, the revised ASX Listing Rules and JORC Code will materially affect the way that mining companies and oil and gas companies report on their reserves and resources:
- For mining companies, the changes will introduce new provisions dealing with the reporting of production targets, exploration targets, metal equivalents and in situ values, and will also require further information to be provided when reporting exploration results, estimates of ore reserves and mineral resources for material projects. Listed mining companies will be required to include a mineral resources and ore reserves statement in their annual reports.
- For oil and gas companies, the changes will introduce an industry-wide requirement to report according to the Society of Petroleum Engineers Petroleum Resources Management System (SPE-PRMS) and will introduce consequential changes related to the acceptance of SPE-PRMS as the industry standard for reporting. Oil and gas companies will also be required to provide additional information when reporting on exploration activities, petroleum reserves, contingent resources and prospective resources for material projects. Similarly to mining companies, listed oil and gas companies will be required to include an annual reserves statement in their annual reports.
A 12-month transition period from the time of regulatory clearance of the amendments is proposed so that companies can become compliant with the new reporting requirements.
Submissions on the draft ASX Listing Rules and/or the exposure draft of the JORC Code (2012) must be received by the ASX/JORC by no later than 26 October 2012. If you would like assistance with a submission, please contact one of our specialists.
We have compiled a concise and consolidated summary of the proposed changes. A table setting out a high-level overview of the key changes that will affect the mining industry can be found
here and a table setting out a high-level overview of the key changes that will affect the oil and gas industry can be found
- Ted HillPartner,
Ph: +61 3 9613 8588
- Igor BogdanichPartner,
Ph: +61 3 9613 8747
- Erin FerosPartner, Sector Leader - Mining,
Ph: +61 7 3334 3313
- Richard MalcolmsonPartner,
Ph: +61 2 9230 4717
- Marae CiantarPartner,
Ph: +65 6535 6622