reporting coal exploration friederichm july09

COAL EXPLORATION TECHNIQUESCOAL EXPLORATION TECHNIQUES AND REPORTING

21st July 2009 MGEI – IAGI SEMINAR BANDUNG21 July 2009 MGEI IAGI SEMINAR, BANDUNGMike FriederichM. Aus. [email protected] 1

AGENDA

Introduction

Resource Reporting Codes – an Introduction

Exploration StagesExploration Stages

Exploration Reportingp p g

Conclusion

Discussion

2MGEI – IAGI SEMINAR, BANDUNG

EXPLORATION STAGES

INFERRED RESOURCE

INDICATED RESOURCE

MEASURED RESOURCE

EXPLORATION RESULTSJORC STAGE: RESOURCE RESOURCE RESOURCE

STAGE RESEARCH RECONNAISSANCE FIELD MAPPING INITIAL DRILLING

DRILL TESTING

PRE-FEASIBILITY FEASIBILITY

Data collection; Reconnaissance Detailed Satellite Wide spaced Typically 2 to 4 Drilling typically Drilling typicallyData collection; prepare GIS data

Reconnaissance mapping

Detailed Satellite Imagery Interp

Wide spaced drilling

Typically 2 to 4 km spacing

Drilling typically 1 km spacing

Drilling typically 500m spacing

Study regional geological setting Outcrop Logging Field Mapping

Quality, seam thickness, resource potential

Estimate inferred resources

Initial geotechnical studies

Geotechnical drilling

Reliable Bulk Sample; or TASKS

Preliminary depositional model

Coal rank / quality assessment Scout Drilling

topographic maps

p ;large diameter core

Check environmental issues / land status

Estimate Indicated Resources

Estimate Measured Resources

I i fid

RESERVES Probable Proved

Increasing confidence


Three Principles of the Reporting Codes

The Codes like CRIRSCO and JORC for reporting coal resources and quality – and also for exploration planning. q y p p gThese codes have 3 principles, which give investors more certainty on the results:

•Transparency- clear and unambiguous presentation of information.

M t i lit• Materiality- all the information reasonably required and expected• Competencep- public reports based on work undertaken by Competent Persons

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Relationship – Exploration Results, Resources, Reserves


Coal Resources and Coal Reserves

A Coal Resource is that part of a deposit with reasonable prospects for eventual economic extraction. The location, quantity, quality, , q y, q y,geological characteristics and continuity of a Coal Resource are known, estimated or interpreted, from Points of Observation.

A Coal Reserve is the economically mineable part of a Measured or Indicated Coal Resource.


Mineral Resource / Reserve Estimations & associated reports

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Source Stephenson, 2005

MGEI – IAGI SEMINAR, BANDUNG

Reports – Public or Internal?

PUBLIC REPORTS (for share market investors etc)It is intended that the Public Reporting provides all the information that investors and their professional advisors would need, and reasonably expect to find, for the purpose of making a reasoned and balanced judgement regarding the E l ti R lt Mi l R O R b iExploration Results, Mineral Resources or Ore Reserves being reported. In some countries, Public Reports to the sharemarket are regulated by a Reporting Code.

INTERNAL REPORTSIf the reporting is an internal report for Company management, it has a similar purpose Company management needs anit has a similar purpose. Company management needs an impartial review of the results; and what these results mean for the resource potential. They also need to understand the work program and likely costs of future programs, and whether the

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p g y p g ,resource is likely to be economic.


AGENDA

Introduction




Conclusion

Discussion


Staged Coal Exploration

• Exploration proceeds in stages. There is a “decision point” between each stage: results are evaluated and a decision made whether or gnot to continue. For example early reconnaissance may show the area is too folded, with very steep dips; or that the rank of the coal is too low.

• The early stage is low cost, covering large areas

• If exploration results are good, the target area becomes more focussed and more expensive exploration methods are used.

• Advanced coal exploration is costly, using drilling; but at this stage the chances of success should be high, so risks are low.


RESEARCH STAGE

INFERRED RESOURCE

INDICATED RESOURCE

MEASURED RESOURCE



DRILL TESTING

















topographic maps





I i fid




Research – GIS Model• Base map of digital regional geology (1:250,000)• Petroleum exploration wells• Location of coal outcrops• Location of previous coal boreholes if any; with drilling results• Topographic data; digital terrain model if availablep g p g• Remote sensing imagery• Regional geophysics• Infrastructure (roads; ports)• Infrastructure (roads; ports)• National parks or nature reserves;• Coal Tenements (KP, Coal COW)

Coal Location Data

Digital Geology

GIS

12MGEI – IAGI SEMINAR, BANDUNGCoal

tenements and

Regional Structure

GIS DATASET

Research – GIS Model

• Look for trends of coal quality or thicknessthickness

• Look for errors in regional mapping• Look for areas that are open (not

held by other companies) for theheld by other companies) for the wrong reasons; eg because there has been an error in the regional mapping

GIS model of part of the Sydney Basin

mapping.• There will then be a list of questions

to be solved by field workGIS model of part of the Sydney BasinSource: SRK website


Research – GIS Model• Look for trends of coal

quality or thickness• Look for errors in regional g

mapping• Look for areas that are open

(not held by other companies) for the wrongcompanies) for the wrong reasons; eg because there has been an error in the regional mapping.

• There will then be a list of• There will then be a list of questions to be solved by field work

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From a company website


EXPLORATION STAGES

INFERRED RESOURCE

INDICATED RESOURCE

MEASURED RESOURCE



DRILL TESTING

















topographic maps





I i fid




Reconnaissance and Mapping StagesReconnaissance level work is done to confirm the regional geology; to locate and sample known coal outcrops toand sample known coal outcrops to determine the coal rank and some aspects of the quality; in some cases coal thickness may be assessed. Thecoal thickness may be assessed. The dips can be measured, so for example if the area is too strongly folded, that can be determined immediately, without ygoing into a more detailed program.


REMOTE SENSING before the mappingRemote sensing interpretation is done by specialised consultantsconsultants

Results are used to guide the location and focus of fieldlocation and focus of field mapping

The interpretation will usually p ygive more focussed detail in the areas of interest, than the regional geological maps.


Field MappingIn Indonesia, with heavy rainfall and the typical coal measure topography, reconnaissance & field mapping will provide a lot of detail on the local geology and coal outcrops may be located &detail on the local geology, and coal outcrops may be located & sampled. In drier areas, outcrop may be limited to occasional road cuttings. In these situations, regional oil & gas drilling, or stratigraphic boreholes, may be initial regional sources of datastratigraphic boreholes, may be initial regional sources of data

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Indonesia Bowen Basin, Australia


Magallanes Basin, Chile

Sampling

Systematic channel sampling is done on good outcropson good outcrops

The channel should be cut back into fresh coalfresh coal

“Ply by ply” sampling


Detailed Field Mapping

• Detailed mapping is done over the main target area; eg at 1:10,000 or 1:5000

• This mapping may use a remote sensing interpretation as a guide• This mapping may use a remote sensing interpretation as a guide.• Locations determined using GPS.• Coal outcrops should be recorded in detail. Attempts should be

made to follow coal along strike if possible to check continuitymade to follow coal along strike if possible to check continuity.• Measure coal thickness; strike; dip; take samples • Record coal lithotypes; partings;• Mapping gives an initial estimate of seam thickness; seam• Mapping gives an initial estimate of seam thickness; seam

correlation; and a preliminary estimate of the coal quality. However coking properties may be unreliable. Calorific value may be too low and moisture too high. Vitrinite reflectance is reliable.

• There may be recognisable marker beds such as limestone; basalt; or even the top of basement, that will be useful in assessing the overall correlation. GEOLOGICAL REPORT ith ll lt d

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• GEOLOGICAL REPORT with all results and maps.


Test Pits


Rank Changes across a basin

Rank changes like this typically show us where the centre of the basin was. The area in the east was more deeply buried.east was more deeply buried.

Data on rank changes can be acquired at an early stage during exploration and can be an indicator of where the best coal will be.

Outcrop samples can be acquired for vitrinite reflectance testing, which will indicate the approximate coal rank

Bowen Basin rank changes


Trenching

In some areas trenching mayIn some areas trenching may be done, where the topography and depth of weathering are suitable.


End of the Mapping Phase – Scout Drilling

The mapping phase often ends with a scout drilling program. The rig is typically light weight g p g g yp y g gand portable, as access is difficult at this stage, and the drilling is typically shallow drilling near outcrops.

Several widely spaced boreholes are drilled. They will:will:

‐ Confirm the coal qualityC fi thi k d th di‐ Confirm seam thickness and the dip

‐ Provide good information on drilling conditions and costs, to help plan the next phase, drilling.


The Report

MAPS are prepared showing all the exploration results – outcrops, strikes, dips, coal sample points; coal thickness; etc, and any revised interpretations on the regional geology A database is needed in GIS format A logical scale should be used The mapgeology. A database is needed, in GIS format. A logical scale should be used. The map should include the KP boundaries.

A REPORT is prepared. A checklist should be used, to ensure all points are covered. A suitable check list is provided later in this report It starts with previous work andsuitable check list is provided later in this report. It starts with previous work and regional geology, and ends with the recommendations and work program for the next phase.

Management needs to be aware of the most likely size and quality of the resourceManagement needs to be aware of the most likely size and quality of the resource target or the Base Case. However a potential range should also be provided – a Worst Case and Best Case, for the potential tonnes of coal and for the coal quality. Things like distance to a barge port are also important.

Exploration results including coal thickness, dips and quality, should be presented in tables. All data and ranges should be provided – not just the good results, this will be a biased report.

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Management also needs to be aware of the likely Work Program and Budget for the next phase, so that an informed “YES/NO” decision can be made at this point.


EXPLORATION STAGES

INFERRED RESOURCE

INDICATED RESOURCE

MEASURED RESOURCE



DRILL TESTING

















topographic maps





I i fid




Drilling Phase

• Plan the program. It should continue to be staged, with initial wide‐spaced drilling; followed by a YES/NO decision point; Surveying and t hi i f l l f i i li bltopographic mapping; for large scale surface mining, reliable topographic maps are needed for estimates of overburden volumes.

• Drilling, on a grid or traverse pattern.

• Good core recovery in coal is very important.

• Determine coal thickness and depth; core the coal seam which will• Determine coal thickness and depth; core the coal seam, which will be sampled for analysis.

• Downhole geophysical logging of all boreholes

• Determine the location of the coal subcrop by oxidation line drilling

• GEOLOGICAL REPORT with all results and maps.

MGEI – IAGI SEMINAR, BANDUNG 27

Core Recovery

• Good core recovery is essential for reliable quality data• Use downhole geophysical logs to determine the location & amount of core loss.• The Australian Guidelines to the JORC Code advise normally > 95% core recoverynormally 95% core recovery• It starts with the selection of the drilling contractor; and with the drilling contract itself.• Consistent high core recovery can be difficult in higher• Consistent high core recovery can be difficult in higher rank coals, which can be more friable.• Consider moving to PQ core if recovery is poor with HQ / HMLC. This size may be needed anyway for the volume and size needed for float / sink testing of higher ash coals.


coa s• Triple tube core barrel for better undisturbed core

Core Logging

• Lithologies are logged; standardise between geologists;• Logging is best done using a check list, and transferring results to a

spreadsheet for computer database storage.• Record at least:

– Coal brightness;– Any non‐coal partings within a coal seam; (colour; composition; hardness;)Any non coal partings within a coal seam; (colour; composition; hardness;)– Lithologies of roof and floor; again with color, composition, dip, etc)– Hardness and other geotechnical properties;– Dip; appearance of dip plane discontinuities

Presence and orientation of structures; cleat (in coal); joints;– Presence and orientation of structures; cleat (in coal); joints;– Presence of later mineralisation eg pyrite; carbonates

• Results are typically shown graphically in a log, at 1:100 scale (borehole) and 1:25 scale (coal seam).

• This log can be printed out directly from a number of computer programs; it is also done directly in the field to help planning & interpretation of the next boreholes, and to make instant correlations of coal seams.


Core Drilling Large Diameter Core

• At the stage of Feasibility or Pre‐feasibility, there is a need to take y,bulk samples for coke testing (coking coal) or combustion testing (thermal coal).g ( )

• In some situations these samples are easiest taken by excavators. However in other situations theyHowever in other situations, they are best taken by drilling many large diameter core samples.

l b l ll b• Special core barrels will be needed.


Core Photography

• Core should be photographed while in the core box or in split tubes before sampling. This gives a permanent record of the appearance of the coal and partings, and of fractures , cleats and dip planes, and will

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be used by the Mining Engineer and geotechnical specialists during the assessment of the resource.


Sampling ‐ PrecautionsCoal should be sampled as soon as possible after logging the coal.

For low rank coals great care must be taken to avoid the coal drying at allFor low rank coals, great care must be taken to avoid the coal drying at all before it gets to the laboratory. The coal must be stored in double sealed plastic as soon as possible, and kept out of direct sunlight. If the coal is allowed to dry, the as-received moisture will be too low; and the as-allowed to dry, the as received moisture will be too low; and the asreceived heating values will be too high. This can result in major errors when estimating quality and therefore the likely sales price of the coal.

Coking coals can lose some coking properties quickly (especially fluidity). Again coal with likely coking properties should be sampled as soon as possible, and if there is a delay in transport to a laboratory for analysis, should be stored on site in a freezer.

The Report on the drilling program should mention precautions taken to ens re that the anal sis is reliable incl ding the treatment of samples


ensure that the analysis is reliable, including the treatment of samples and precautions taken to ensure against coal drying.

Ply sampling

• Coal properties tend to follow laterally along strike.Th ill t i ll b i ifi t

PlyGeological roof

1• There will typically be significant quality differences within the seam.

• After the initial drilling phase, the project geologist will typically correlate

1

2 Mining Bench Roof

3

chproject geologist will typically correlate and name the seams; and will decide a typical ply naming system also.

• Later sampling will then follow these Mining Benc

4 Non‐coal Parting

5Parting

plies.• This depends on accurate correlation

of the plies.f

6Mining Bench Floor

6

Geological Floor7

• If plies are thick then sub‐ply samples can also be taken; but these should also follow stratigraphic boundaries so that they are consistent.

g

Mudstone

Hypothetical vertical section through a seam showing

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that they are consistent. Hypothetical vertical section through a seam showingthe sub-division into separate plies, which are sampledseparately; and the Mining Bench


Reconciliation with downhole geophysical logs

• The coal sample intervals must be reconciled with the downhole geophysical logs. Before doing this, we must be sure that the geophysical depths are correct and that there is no systematic depth error.

• The geologists log is adjusted so that the roof, floor and internal g g g j ,stone bands, match the geophysical log anomalies.

• The amount of core recovery is then determined; and the location of the core loss can be decidedof the core loss can be decided.

• Core recovery should be estimated as soon as possible. Most drilling contracts require a re‐drill if the core recovery is less than

h h l95% within the major coal seams.


Database

• Data must be entered into a reliable database.

• As the project advances and becomes larger, with more data, it will p j g , ,be necessary to assign responsibilities for database management eg the right to enter data; the right to make changes.

• As noted original data is kept This includes original paper data• As noted, original data is kept. This includes original paper data entry sheets, as these can be used to check for data entry errors later. Original survey data and surveyors notes must also be retained and may be needed for an audit of the surveyretained, and may be needed for an audit of the survey.

• Database validation will be needed


Geological Modelling

• Geological modelling is done within a computerised modelling system such as the Stratmodel system within the Minescapesoftware (Mincom).

• The software allows the user to define the seam names and seam relationships (eg splitting); minimum parting thickness; location p ( g p g); p g ;and orientation of faults; depth of weathering.

• The model can then be used as input to a mineable reserve and quality estimationquality estimation.


AGENDA

Introduction




Conclusion

Discussion


Reporting

After each stage of a staged Exploration Program, a Report is needed.

Th E l ti M t ill i ti t d t d thThe Exploration Management will require reporting to understand the results and recommendations / budgets for the next step. In some cases the Geologists report will become part of a larger Feasibility Study or an economic scoping study so Company management can make informedeconomic scoping study, so Company management can make informed decisions and to inform potential sources of finance for the project.

If the company is listed on a Share Market investors need to be fullyIf the company is listed on a Share Market, investors need to be fully informed of exploration results. In some countries, the sharemarket regulators require that resource reporting follows the standards set by a Mineral Code eg JORC.g

Some companies require that internal reporting for company management also follows the same standards. This gives a solid

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framework for reporting.


Reporting

The report content will depend on the stage.

All ill h th f ll i i iAll will share the following as a minimum:

All results will be in tables, either as a backup database or in an Appendix to the reportto the report.

The report will have a Location Map and a clear definition of the title (eg KP or PKB2B boundaries) and other Land Status eg KabupatenKP or PKB2B boundaries) and other Land Status eg Kabupaten boundaries; National Parks etc.

Geological results will be shown clearly in maps at appropriate scales and g y p pp pin cross sections.

The report will end with recommendations for the next stage; if the

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recommendation is to continue, then there will be a Work Program; and a budget; and a target in terms of the planned Resource Classification and the potential resource and quality that may be proved by the program.

Reporting – Early Stage

If the report is for early stage results, before th d l ti fthe declaration of a Resource, then the following is a suitable Check List to considerCheck List to consider.

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Tenement Data

FFrom a company website

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Geology – explain the coal stratigraphy

42From a company website

Reporting – Later Stage

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Maps…….

44Topography

Reporting Checklist

Sampling Techniques ‐ Type of sampling; techniques used to ensure

samples are representative

ll d l h h‐ Drilling type; details; core recovery; whether bias may have occurred

L i t h i d d t il h t h‐ Logging techniques and detail; photography

‐ Laboratory procedures; QC (quality Control)


Reporting Checklist (Continued)

Sampling Techniques (Cont’d)‐ Borehole spacing; relevance to the Coal

Resource classification

h h‐ Topographic mapping; techniques; accuracy

‐ Topographic survey of boreholes; accuracy; j ti t dprojection system used;

‐ Results of any audits or reviews of sampling techniques and data;techniques and data;



Database Integrity‐ Measures taken to ensure data has not been

corrupted

l d d‐ Data validation procedures



Geological Interpretation‐ Confidence in or uncertainty about the

geological interpretation

f d d d‐ Type of data used; assumptions made

‐ the impact of alternate assumptions on the C l ti t ( lt tCoal resource estimate (eg alternate location of faults etc)

The factors affecting continuity of coal seams‐ The factors affecting continuity of coal seams and of coal quality



Estimation and modelling techniques‐ The type and suitability of the techniques

used and key assumptions.

h l d f d l‐ The validation process; comparison of model data to borehole data



Moisture‐ The method of determination of the moistureThe method of determination of the moisture

content‐ the moisture basis

if a low rank coal steps taken to ensure that the‐ if a low rank coal, steps taken to ensure that the samples did not lose moisture before testing

Note: for low rank coals, I believe that analytical results should be reported on an as‐received (total moisture) basis. Reporting at air dried basis will give a misleading view of the quality. Investors are still not understanding the quality basis of some Indonesian coal resources for this reason. Low rank coals can also lose moisture before they are tested if th t h dl d i t l d th t b di i th t h i d t

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they are not handled appropriately, and there must be discussion on the technique used to ensure that the total moisture (=as received moisture) is representative.


Resource Reporting

The Resources should be reported for individual seams or seam groups; and should be divided and reported using key variables such as thickness, depth range strip ratio and geological or technical considerations The key variablesrange, strip ratio, and geological or technical considerations. The key variables and assumptions for each deposit should be clearly stated in order to ensure

clarity and transparency of the report.

An example from a Public Report on a Company website



Relative Accuracy of Resource Estimateh i f h l i‐ Where appropriate a statement of the relative

accuracy and/or confidence in the Coal Resource for example the use of geostats to determine thefor example the use of geostats to determine the relative accuracy within stated confidence limits; or alternatively, a qualitative discussion of the f t th t ld ff t th C idfactors that could affect the accuracy. Consider providing a Range of resource size, from worst case to best case, with a Base Case, which emphasises, , pthat this is an estimate not a calculation


Resource Checklist (Continued)

Classification‐ The basis for the classification into resourceThe basis for the classification into resource

categories;‐ Discussion on how the classification considered

all relevant factors eg confidence in the estimateall relevant factors eg confidence in the estimate of the tonnes; confidence in continuity of the coal seams; confidence in the depth of weathering and topographic mapping; confidence in theand topographic mapping; confidence in the continuity of the coal quality



Audits or Reviews‐ The results of any audits or reviews of the

Coal Resource


JORC Workshop

THANK YOUTHANK YOU


AGENDA

Introduction




Conclusion

Discussion


BACKUP


Precision

“I would rather be vaguely right than precisely wrong”

John Maynard Keynes –

Economist


Precision – why does it matter?

It is a scientific principle that precision in reporting should correspond to the level of accuracy.

Any estimate of “what is the population of a country” would normally be to the nearest one million. The estimate is approximate.

When asked when does the meeting start, we say “10 am” when actually we know it may start 5 or 10 minutes later. If we really want th ti t t t EXACTLY ti ill “10 SHARP” hi hthe meeting to start EXACTLY on time we will say “10 SHARP” which does imply to the nearest minute.

If th d f f ti t i f l dIf the order of accuracy of a resource estimate is for example around 10% or 20%, it can be misleading and inaccurate to report a very precise resource number. Investors who make decisions based on the report may believe that accuracy and precision are related.

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report may believe that accuracy and precision are related.


Estimating Relative Density for Tonnage Calculations

THE PROBLEM

The relative density of coal is of course

LABORATORY RD

The coal is crushed; removing all the voids &The relative density of coal is of course used in the estimation of coal tonnes.

Density is related to the mass and the

The coal is crushed; removing all the voids & cracks. Partial drying removes much of the in situ moisture.

The results are then used to estimate thevolume of a material. Relative Density is compared to water (=1). The volume and mass of a substance is determined by measuring it in air; then in water

The results are then used to estimate the coal tonnes.

The test is cheap; it is repeatable; and it is precise However the coal samples are in aby measuring it in air; then in water.

However coal is porous with many cracks, cleats etc; these contain water.

precise. However the coal samples are in a very different condition from the in situ state. Grinding and part air drying reduces both volume and mass, but volume is reduced at a greater rateThe problem then is to take the material

to be tested; then determine mass and volume, while keeping the original pore space and moisture content

a greater rate.

The tests can be used as a starting point but only if the results are corrected; if they are not corrected the RD (and coal tonnes) is

60Source: Preston 2007

space and moisture content. not corrected, the RD (and coal tonnes) is TOO HIGH typically by 2 to 5%



ADJUSTMENT METHODS

There are several methods for

RELEVANCE TO ESTIMATES

The errors obviously become moreThere are several methods for estimating the In Situ relative density; these are described in more detail by Preston, 2005.

The errors obviously become more significant for low rank coals and also for high accuracy estimations; at the level of inferred resources, for example, the i t f thi i i d t

One of these is Apparent Relative Density. This is a direct testing method using lump coal in water, and

impact of this error is minor compared to the level of uncertainty in general

g p ,follows an Australian Standard, AS 1038.21.2.

This has problems; only lump coalThis has problems; only lump coal can be tested; and the coal is “air dried” so some of the natural moisture is removed. Also the coal

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Source: Preston 2007probably does not contain as many voids and cracks as originally.



PRESTON SANDERS METHOD

The Preston & Sanders method has now become the industry ybenchmark in Australia.

This uses RD as the starting point.

Air dried moisture is determined.

In Situ moisture is then estimated by the geologist, using other moisture test results eg as received; equilibrium moisture.g q

Relative density (in situ) = Rdad * (100 - Mad )

100 + Rdad * (ISM - Mad ) - ISM

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Source: Preston 2007


Why were these codes developed?

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Source: The JORC Code (presentation by Peter Stoker, 2006) 63


The Competent Person

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Source: Stephenson, 2005


The Competent Person Definition

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A Competent Person as defined under the JORC Code must be a Member or Fellow of a recognised professional organisation (ROPO)Member or Fellow of a recognised professional organisation (ROPO) with appropriate experience.

Clause 10 provides that:

A “Competent Person” must have a minimum of five years experience which is relevant to the style of mineralisation and type of deposit under consideration and to the type of activity which that person is undertaking”.

The hurdle of required experience is in accordance with the third of the three principles of the JORC Code, ie competence. . p p , p


The Competent Person ‐ Experience

The JORC Code provides that“If the Competent Person is preparing a report on ExplorationIf the Competent Person is preparing a report on Exploration Results, the relevant experience must be in exploration. If the Competent Person is estimating, or supervising the estimation of Mineral Resources, the relevant experience must be in the , pestimation, assessment and evaluation of Mineral Resources. If the Competent Person is estimating, or supervising, the estimation of Ore Reserves, the relevant experience must be in the estimation, assessment, evaluation and economic extraction of Ore Reserves”Specifically, this means that a geologist with more than 5 years experience in coal resource estimation MUST NOT be the Competent

f h fPerson for reserve estimation; in practice, that is an area for experienced mining engineers with skills in mine planning and economic evaluations.


The Competent Person – Resource & Reserve Reporting

In practice, at least two Competent Persons are needed

1. The competent Person who is responsible for the Resource Statement (the Geologist)

2. The Competent Person who is responsible for the Reserve Statement (the Mining Engineer).


Consent of the Competent Person

When a company issues a report containing material from the Competent Person, the Company must obtain the consent of the Competent Person as to the form and context in which the information appears This is required byto the form and context in which the information appears. This is required by Clause 8.

If a disclosing company issues a public report or disclosure document g p y p pwithout having obtained the written consent from the Competent Person, and the report is potentially misleading and deceptive, the Company may be sued by those who suffer economic loss. This can be used as a defence by the Competent Person involved.p

If a Competent Person is using information provided by a Company, he must not accept that information blindly. He should mention that he has not tested the information or cannot independently confirm its accuracytested the information or cannot independently confirm its accuracy.

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Source: Livesley, 2008: Liability of Competent Persons for JORC reports


Consent of the Competent Person


How do I become a Competent Person?

The JORC Code states that the Competent Person must be a member of a recognised Professional Association and have 5 years relevant experience. To be the Competent Person for resource estimates this must be 5 yearsbe the Competent Person for resource estimates ‐ this must be 5 years experience in estimating resources. For coal – this experience must be in estimating coal resources.

One method is to join the Australian Institute of Mining & Metallurgy. The application must be sponsored by two current members of the AusIMM who can guarantee that they have known the applicant for a certain time period.

In the longer term, perhaps an Indonesian professional association will become a recognised professional organisation under JORC. This organisation needs approval by the AusIMM, and a key part of this approval is confirming that the organisation in practice has a mechanism and historyis confirming that the organisation in practice has a mechanism and history of ensuring professional conduct of its members and for disciplining members who the organisation has confirmed, via an internal review process, have been unethical. This is required by stakeholders. The AusIMM annually requests documentation from the ROPO of any breaches of the

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annually requests documentation from the ROPO of any breaches of the JORC Code by its members.


How do I become a Competent Person?

Most companies have a strict process of internal approval of a Competent Person for company resources and reserves This isCompetent Person for company resources and reserves. This is understandable as the role involves company reputation issues. An example of the internal approval process:

M b hi f th A IMM i d P f i l• Membership of the Aus IMM or a recognised Professional Organisation;

• A certificate confirming that the person has attended a Company‐approved course on the JORC Code

• The Candidate signing a document confirming that he or she has the required qualifications under the JORC Code, and attaching a CV q q , glisting the relevant experience

• Approval by a senior executive of the company.


reporting coal exploration friederichm july09

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