SAMREC Code Summary
The South African Code for the Reporting of Exploration Results in terms of Mineral Resources and Mineral Reserves was established and modelled in the year 1998 after the JORG which is the Australian Mineral Resource and Ore Reserves Code. The basic aim of the code is to set out the minimum standard recommendations and guidelines for every public reporting of an exploration project. The code was drawn up by the Working Group of the SSC Committee, with the help and support of the South African Institute of Mining and Metallurgy (SIAMM) and the Geological Society of South Africa (GSSA) (SAMREC, 2007).
The SAMREC Committee is comprised of various stakeholders such as the SACNASP which represents the SAIMM and the Johannesburg Stock Exchange (JSE). The main purpose of the SAMREC Code is to provide investors and their advisors the correct feasible information and satisfying regulatory requirement. This encourages companies to deliver information which is comprehensive, relevant, and material information which is necessary for a reasonable and well-balanced exploration results in their reports. (SAMVAL, 2008)
The code lays down a profound foundation for meticulous, unmistakable and ethical report of all styles by this it gives great serve which is not misleading regarding the mineralisation being reported and this also provides the competent persons the important code to subject to. SAMREC Code is based on three pillars which are the basic principles of an exploration report (prepared in terms to address circumstances uniquely to South Africa.) (SAMREC, 2007) (SAMVAL, 2008)
• Transparency, provides sufficient information and presentation which is clear and understandable and not to mislead.
• Materiality contains all relevant information that the investors and advisors would need and expect to find. The aim of this is to carry out a well-balanced judgement regarding the asset.
• And lastly Competency, which is based on the responsibility of a qualified and experienced worker, whom bases his/her work on the Professional Code of Ethics.
These fundamental principles also lay ground to the approaches necessary to be taken (SAMREC, 2007):
• Cash flow Approach relies on the value-in-use principle. This determines the present value of future cash flows over the life-span of the mineral asset.
• Market Approach depends on the principle of the willingness to buy or sell requirements obtainable for the mineral once it is to be sold in a profitable period.
• Cost Approach which represents the historical and future amounts spent on the mineral asset.
At least two of the above mentioned approaches should be used; the choice of approach highly depends on the type of properties at hand. For exploration properties the market and cost approaches are quite used and for production properties, cash flow and the market approaches are regarded.
An appropriate criterion of reporting and assessment is used as a reference, following the principles of...