Mining professionals from around the country, with all levels of experience, took part in the 4th Annual SAMREC/SAMVAL Compliance and JSE Reporting Workshop hosted by the GSSA and the SSC at the Glenhove Conference Centre in Johannesburg from 28th-29th June.
SAMCODES Standards Committee (SSC) Vice-Chairperson Tania Marshall chaired the workshop, with presentations by industry stalwarts and SSC members including SAMREC Chair Ken Lomberg and SAMVAL Chair Kelly Redman. The workshop is aimed at those interested in becoming Competent Persons (CPs) and Competent Valuators (CVs), with respect to the public reporting of solid minerals.
SAMREC and SAMVAL fall under the SAMCODES; codified sets of standards and principles that are meant to guide CPs and CVs when they compile a public report, such as a Competent Person’s Report (CPR). The Codes provide for a common language that CPs and CVs can use, and that can be understood by readers of public reports.
The main purpose of the Codes is to protect investors. For example, a CPR is a type of risk assessment of a mining project and is required by the JSE before a mining venture can be listed on the exchange. To ensure that the report adheres to the Codes, the JSE maintains a Reader’s Panel to review all reports. Panel members are appointed by the JSE and are experts in the commodity under consideration; they remain anonymous, except to the chairperson of the panel. One important aspect to note is that a CP or CV must be an actual person rather than a corporate entity, and that this must be indicated as such on the report as it is this person who is responsible for the report and eventually signs off on it. Rob Ingram, Chair of the Solid Minerals section of the panel, claimed that in recent years there has been improvement in public reporting. Excellence in public reporting is recognised annually by the Investment Analysts Society of South Africa and the SSC with the awarding of the SAMREC/IASSA Squirrel Awards.
Being a CP or CV not only requires at least 5 years actual experience in the specific commodity that the report deals with, it also requires membership to a professional body such as the GSSA or the SAIMM and registration with a statutory body like the South African Council for Natural Scientific Professions (SACNASP). The organisation accounts for over 13000 members, with Geology being by far the biggest field of practice amongst its members.
Both days of the workshop concluded with panel discussions. On Thursday, Roger Dixon was invited to share his thoughts on International Developments and intimated that the SAMCODES are in a good position when compared internationally – not as hindered by government control as the Russian Codes (NAEN) and at least recognised by the country’s Financial Sector Conduct Authority, unlike with the American Codes, which are not recognised by the SEC. However, one concerning insight was the distrust of SA by the rest of the African mining community given the country’s history of xenophobia. Thus the African Union would prefer rather to develop their own Pan-African Reporting Codes than to adopt the SAMCODES. This is a situation that certainly needs to be addressed if South Africa wants to be at the forefront of capital investment in the mining industry on the continent. Nonetheless SA is aiming to assist the AU in the drafting of its Codes.
Vaughn Duke was a guest on the second panel discussion on Friday, on the Governance and Effectiveness of the Codes. When asked if the Codes were deemed useful, one attendee quipped it was not clear to whom they were useful. It also appears junior mining companies have tarnished industry perceptions with their gung-ho investing. The key in the use of the Codes in good reporting practice is to prevent errors beforehand rather than to correct mistakes after the fact. Vaughn indicated that the SAMVAL Committee planned to start examining disaster cases in public reporting and investing so as to better inform the industry on how not to go wrong.
Attendees were approached for their opinions on the SAMCODES and the SSC. There were compliments for the co-branding of the Codes, in that it makes all the codes recognisable and allows for easier interaction and administration. Training, such as with this workshop, was also highlighted as an invaluable means of spreading exposure to the Codes, and more would be welcome. However, reservations about the lack of diversity involved in building the codes were expressed too: “More involvement of players within the industry would be much more helpful. It’s quite a select few who are really contributing. A more diverse number of contributors might actually improve SAMREC.” There was also a suggestion that more specific reporting guidelines for other minerals could be introduced, just like SAMREC has done for Coal and for Diamonds. Yearly feedback from the SSC such as a summary of issues encountered in CPRs and ways to improve would also be appreciated.
An interesting aside to the rest of the workshop was a talk given by Ryan Gibson of IFXBG, on Venture Capital and Crowdfunding in Junior Mining. Gibson touched on tapping into social media for potential investors and how the crowdfunding platform spreads risk across a larger, but probably smaller-incomed base of investors. Asset-backed cryptocurrencies (e.g. backed against gold reserves) are also now being introduced as a means of buying shares into a mining company.