1.Valmin seminar and review
The second Valmin Seminar was held in Brisbane, on 17th April 2012. It was attended by A.S.Macfarlane, on behalf of the SAIMM. Messrs A. Clay and G. Njowa, both members of the Samval working group, also attended. Some 120 delegates were present.
The purpose of the event was to provide an eastern seaboard opportunity for participation in the Valmin review (the previous seminar being held in Perth, in November 2011), as well as to provide an update on the Valmin review process.
The one day seminar concentrated on discussions around issues critical to the Valmin process. This process has been, and is, strongly influenced by the ASX and the Australian Securities and Investment Commission (ASIC), which is the State regulatory body, that regulates reporting and activities under the Australian Corporations Act, and thus alignment issues dominated proceedings.
Australian practice is to integrate financial regulation, so as to promote and this is done through the so-called "twin peaks" system. ASIC is one of the "twin peaks" of regulation, the other being APRA..
ASIC was given the power to regulate market integrity and consumer protection with the objectives of promoting market fairness and consumer confidence, while APRA was given the power to regulate asymmetric information problems by setting and enforcing standards of prudential behaviour on all institutions making promises in the areas of deposit taking, insurance and superannuation.
ASIC thus regulates the ASX as a Company, and provides guidance through documents such as RG 111 (Disclosure) and RG 112 (Independence) in reporting. These issues and guidances must therefore be part of the Valmin debate, and influence discussion around issues such as production forecasts, forward looking statements, independence, ethics, reasonable assumptions and grounds, etc.. The focus of Valmin is therefore defined as being at Company/Security level, which provides a useful focus for the discussions within Samval, around scope of the Code. Also, Samval can learn and participate in discussions around issues that are important to the Samval process, such as reasonableness, independence and disclosure.
Indeed, the fact that Samval was invited to attend and present the South African process, and to participate actively in the Australian debate, is very encouraging.
Samval, through A.S.Macfarlane, presented the South African position, and participated in a panel discussion session at the end of the proceedings. (The presentation will be placed on the SAIMM website).
In several respects, the Valmin Committee conceded that South Africa is ahead of Australia in its resolution of certain issues, and is particularly envious of the enforceability of Samval through its linkage to the JSE Listing requirements.
On the 18th April, the Valmin Committee held a Valmin review meeting to which the SAIMM was invited. In several cases, the Valmin Committee is relying on Samval definitions and clauses, in their review.
Of particular interest to Samval in this discussion, was the definition/classification of a Expert/Technical Specialist/Securities Expert/Professional. The resolution of the description of the valuation or technical practitioner in terms of these descriptions is a matter for legal resolution. Samval will take advice on this matter from Valmin.
It was of great usefulness to the Samval review process to be present at the seminar and meeting, in that a number of issues were raised which will assist the Samval review process, while the collaborative approach that has been developed between Samval and Valmin will be of great value going forward, to both countries.
2.International Harmonisation meeting
The Samval Working Group established a sub-group in 2011, to investigate the possibility of greater international cooperation and collaboration on the various Code reviews being undertaken.
At the time, it was anticipated this would be an informal communication forum, where it was hoped some convergence on principles and definitions within the various Codes could be achieved. This was after it was ascertained that CRIRSCO would not engage in such a process, but that they would support any such initiative.
This was suggested at the November 2011 Valmin seminar, and received favourably.
In the meanwhile, the International Valuations Standards Committee in London, decided to establish a global sub-committee to develop a new guidance for the valuation of mineral assets. The SAIMM/GSSA mandated the Samval Working Group to participate in this process, and as a result, it gained membership on this Committee through A.S.Macfarlane. Some progress has since been made through teleconferences, with the result that the IVSC agreed that the SAIMM/GSSA through the Samval Working Group take a leading role in the process, and engage with the Canadians and the Australians in this work.
A meeting was therefore arranged in Brisbane to which Canada (CIMVAL), Australia (VALMIN), USA (AIMA and SME), and South Africa(SAMVAL) were invited to attend, along with the IVSC from London.
This meeting was arranged and chaired by A.S.Macfarlane, it being recognised as a South African initiative.
The meeting addressed five critical questions. These are shown below, and the consensus (nay, unanimous) answers to these are shown in summary.
Question 1: Do you see scope for global harmonisation either as a formal accord, or as an informal discussion group?
Answer: unanimous acceptance, with the need to develop a Brisbane Accord. Samval will develop the Accord.
Question 2: Do you support the IVSC project on Extractive Industries as a means to generate this harmonisation, or do you see it as a separate process?
Answer: Unanimous agreement to use the IVSC process as the over-arching guidance. Samval will represent all the global valuation bodies on this Committee.
Question 3: What are the main areas where harmonisation could realistically be achieved:
Answer: Broadly agreed, but this will form the detail of future agendas.
Question 4: Should harmonisation adopt a common approach to the inclusion of oil and gas?
Answer : Yes.
Question 5: Are there consistent views on the valuation of Inferred Resources and/or Exploration properties, Exploration targets?
Time did not allow discussion on this matter.
The Samval Working Group will now develop the Accord and Terms of Reference, and circulate to member bodies. Thereafter the process of harmonisation will be started.
Since this development, two further developments have occurred.
Firstly, the Royal Institute of Chartered Surveyors in London have expressed their desire to join the process.
Second, the Canadian Committee, CIMVAL, have invited South Africa to attend a CIMVAL review conference in Toronto in July 2012, at which China will be in attendance. This will provide the opportunity to bring the Chinese on board, through the Hong Kong Exchange.
In summary, the Valmin event was a great success, and Samval was well accepted and represented.
The establishment of the International Accord is an exciting development, led by the SAIMM/GSSA, especially since such a process has never been possible to achieve before.
This is an important and noteworthy strategic and international development for the SAIMM.