.....jorc stds article re aim etc....

  1. 1,539 Posts.
    Great article courtesy mining news."Caveat emptor" boys and girls....
    "Good morning class. Welcome to the senior school, or what you youngsters used to call the big school – the place where we must stick to the rules because you are all stock exchange listed, and because you manage other people's money.

    Today, we'll start the lesson by going back to something you all studied in junior school, the JORC code, what it means, why it's so important, and why you must not do what some naughty boys have done recently and forgotten the code when lodging reports at the stock exchange.

    If it had been just one of you, Deputy Principal Dryblower (master of school discipline) would not feel so strongly about JORC, which we all know stands for the Australasian Joint Ore Reserves Committee, the book which serves as the umpire when it comes to reporting ore reserves and resources.

    Dryblower is sad to say he has recently had two boys in his office on code breaches.

    First was on January 29 when Leyshon Resources made a silly little mistake and fell back on the Chinese geological reporting system for some of its data.

    Easy to do, really. Dryblower's dear friends in that big, friendly, communist dictatorship called China have such an excellent record with official statistics that he can understand why the most doubting person would accept their geological reporting system as accurate and reliable.

    The problem was in the detail of Leyshon's acquisition of a copper and gold project in northeast China, with the Australian Stock Exchange objecting to drill results from the 1960s and 70s which the company admitted were "not to JORC standard".

    The ASX, naturally, was a little upset - but a day after the report was released, and only after Leyshon shares had jumped from 3.3c to 5.5c, up a cool 66%. It fired off a stern letter pointing out the rules about JORC, reminding Leyshon that "the public reporting of mineral resources (and/or reserves) that is non-JORC compliant is not permitted".

    Sorry, said Leyshon, pointing out that its original report contained "a limited reference" to Chinese-standard geological reporting, and what was said is hereby retracted.

    In Dryblower's view, a good outcome all round. Leyshon lodged the report, the ASX scored a point, Leyshon made a withdrawal, and the share price stayed around 4.5c, a 36% gain.

    Second breach was last week when AIM Resources reported on March 4 that it was acquiring a platinum asset in South Africa. The following day it too acknowledged (after an ASX query) that JORC had been overlooked, or mislaid, or someone nicked the company's copy of the code and the ASX rules.

    In fact, it was along these lines: "The directors wish to make clear that the in situ resources reported are not yet necessarily compliant" with the JORC code.

    Oh, that must be alright then, because the report appears to have been made under the "not yet necessarily compliant" sub-section of the code – which Dryblower is having trouble locating, because the dog appears to have eaten that part of his copy of the code.

    While withdrawing the relevant part of its original announcement, AIM said the release accurately reflected information from an in-house study undertaken by Anglovaal subsidiary Midvaal, a shareholder in the project's vendor, and that it had been reviewed by the company's technical consultants. It noted that it is not unusual for large PGM resources in the Bushveld to be outlined by a relatively few drill holes.

    In any event, the argument over reporting standards is a little after the event. AIM shares jumped from 4.9c before the initial report to a high on the day the report of 11c (an ultra cool 124%), before easing back to around 7.9 – a gain of "just" 61%.

    Deputy Principal Dryblower (master of school discipline) is unsure whether he feels elated (because some lucky devils have made a pile on the market), or angry (because some lucky devils have made a pile on the market).

    But, he is sure of one thing, any more breaches of the JORC code and the game of rising markets that we're all playing with such gusto will come tumbling down because a teensy, weensy little factor called "public trust" will blow out the window – just like it has every other time people disregard the rules."
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