The JORC Code – A Banker’s View
Quentin Amos, Head of Precious Metals, HSBC Bank Australia Limited, and
Phil Breaden, Consulting Director, Westpac Institutional Bank.
Note: The following paper represents the views of the authors and not necessarily those of HSBC Bank or Westpac.
The JORC Code (the “Code”) “sets out the minimum standards, recommendations and guidelines for Public Reporting of exploration results, Mineral Resources and Ore Reserves in Australasia” (JORC, 1999). The Code goes on to define Public Reporting as a report “prepared for the purpose of informing investors or potential investors and their advisers”, and as the Australian and New Zealand Stock Exchanges have adopted the Code into their listing rules, it is natural that companies focus their attention on the needs and requirements of the equities markets.
However the banking community also relies on reserve estimates and reports in evaluating whether or not to advance finance to the resources company. This paper focuses on the understanding, use and reliability of reserves estimates produced under the Code for banking purposes and expresses some concerns of the authors which we believe are shared by the banking community.