ASX has released a consultation paper considering
changes to resource and reserve disclosure obligations for listed
mining and oil & gas companies.
Developments in international standards relating to the
reporting of mineral and petroleum information, an increase in
demand for Australian resources and the need for consistency and
confidence in public reporting by mining and oil & gas
companies are key drivers behind a consultation paper,
Reserves and Resources Disclosure Rules for Mining and Oil &
Gas Companies, released by the ASX on 5 October 2011.
The review of reserves and resources reporting contemplated by
its consultation paper is being guided by a desire to achieve
greater alignment and harmonisation with international best
practice, with a view to reducing compliance costs arising from
currently inconsistent reporting obligations for companies
reporting in multiple jurisdictions.
It will be interesting to see how ASX proposes to balance that
objective with its stated desire of achieving improvements without
unduly increasing the compliance burden for affected companies.
This challenge is likely to be particularly acute in the mineral
exploration and mining sector where the general industry perception
is that a system akin to Canada's prescriptive NI43-101 regime
would introduce a significant layer of cost in respect of periodic
and transactional reporting.
Mineral exploration and mining companies
The review will examine the following matters relating to
exploration information, mineral resources, ore reserves and
associated production targets:
the disclosure of key assumptions to support mineral resource
and ore reserve estimates and the adequacy of the disclosure of
exploration results, exploration targets and production
whether the completion of, at least, a preliminary feasibility
study should be required to support an initial ore reserve
whether listed entities should be required to report the
results of their annual review of their mineral resources and ore
reserves holdings and their aggregated mineral resources and ore
reserves holdings, with a reconciliation of estimates from the
Oil & gas companies
In relation to petroleum reserves, petroleum resources and
associated production targets, the review will examine:
the introduction of a new listing rule requiring the reporting
of petroleum reserves and other petroleum resources in accordance
with the "Petroleum Resources Management System"
(SPE-PRMS), together with general reporting requirements to
a possible requirement that company level reserves and other
aggregated resources information be disclosed annually;
an update to the reporting requirements under Listing Rule 5.9
relating to the disclosure of exploration and drilling results to
provide more meaningful information to assess the significance of
the disclosure of key assumptions to support initial estimates
of reserves, contingent resources and prospective resources, and
the adequacy of the disclosure of production targets and related
financial information; and
the alignment of the Listing Rule requirements relating to the
minimum qualifications and experience required to be recognised as
a "qualified reserves and resources evaluator" with best
What should you do now?
Listed mining and oil & gas companies should consider the
issues and proposals set out in the consultation paper and how they
may impact on their disclosure obligations. Companies should
consider taking the opportunity to engage with the ASX directly or
through their industry associations, given the potential
significant impact on their reporting requirements and associated
compliance costs. ASX plans to hold roundtable events and meetings
with stakeholders and has requested comments by 27 January
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
Persons listed may not be admitted in all states and
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