On 19 May 2016, the updated SAMCODES (South African Mineral Reporting Codes: SAMREC Codes and SAMVAL Codes) were released.

All new mining companies wishing to list on the Johannesburg Stock Exchange (JSE) or London Stock Exchange (LSE), using the SAMREC Code as reporting code, will have to adhere to the updated codes.

Mining companies already listed on either exchange will have one year’s grace period to align their mineral resource and mineral reserve statements with the updated codes.

The codes are continuously updated to ensure transparent reporting of mineral resources and mineral reserves by companies and to eliminate ambiguity and clarify the investment risk for investors.

This is accomplished by providing minimum guidelines for reporting and through the implementation of the “if not, why not?” concept to the contents of Table 1 of the Code.

This forces the CP to consider each element and to determine if the information required and which is omitted can have a material influence on the mineral resources and reserves reported.

Committee for Mineral Reserves International Reporting Standards

Since the previous update of the code CRIRSCO, Committee for Mineral Reserves International Reporting Standards, have defined fourteen definitions to ensure there is alignment between the different member’s countries (South Africa, Australia and Canada are members).

Therefore, for example mineral resources will have the same definition in each of the reporting territories across the world.

One of the definition changes that will influence current mineral resource estimates under the 2009 SAMREC Code is that of a mineral resource. A mineral resource under the 2016 SAMREC Code is as follows:

A ‘Mineral Resource’ is a concentration of solid material of economic interest in or on the Earth’s crust in such form, grade and quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics for a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge, including sampling.

Reasonable Prospect for Eventual Economic Extraction (RPEEE)

From the definition two important points come to the fore.

• The first is that a Mineral Resource cannot be estimated without sampling data.
• The second is that there must be a reasonable prospect for eventual economic extraction (RPEEE).

RPEEE should be demonstrated through the application of an appropriate consideration of the potential viability of mineral resources.

Such consideration should include a reasoned assessment of the geological, mining engineering, processing, metallurgical, and legal, infrastructure, environmental, marketing, socio-political and economic factors (modifying factors) that will influence the RPEEE of the mineral resources.

It is clear that the declaration of mineral resources is not anymore the domain of a singular CP, but becomes a multi-discipline endeavour.

The question is how do you determine RPEEE to move from an exploration target to mineral resources?

Moving from exploration target to mineral resource is normally still in the early stages of project development and falls outside the domain of technical studies (scoping, pre-feasibility and feasibility) as defined by the code.

These studies also focus on the viability of the mineral resources at a certain point in time, which is slightly different from the RPEEE conditions that must be considered for mineral resources to be stated.

This said, the solution does partly lie in technical studies. Technical studies provide base line values to demonstrate that a certain type deposit might be viable now or in the future depending on the range of values applied. This means that the CP who declares the mineral resources should have access to a database of technical studies and understand the sensitivities associated to the assumptions made.

The assumptions made under RPEEE can then be justified and mineral resources can be declared, which will have a high potential to be economic exploitable within a certain period of time.

It is therefore imperative for exploration companies and junior miners or other mineral project developers to align themselves with consultancies with the following criteria:

• • Multidisciplinary team that can assess all the criteria for RPEEE
  • The necessary experience in technical studies of mining projects at different levels to ensure that mineral resources are declared on justifiable assumptions.

VBKOM – Mining Engineers South Africa

VBKOM is uniquely positioned in the current market, not only to provide technical assistance with the development with any mineral project, but also to provide objective inputs and considerations for RPEEE based on our extensive experience in varies technical studies.

For more information about our services, please contact us.