Recommendations Concerning Estimation And Reporting Of Mineral Resources And Mineral Reserves

RECOMMENDATIONS CONCERNING ESTIMATION AND REPORTING OF MINERAL RESOURCES AND MINERAL RESERVES FORWORD

This document summarizes recommendations made by the "SEC Reserves Working Group / Resources and Reserves Committee" (the Working Group) of the Society for Mining, Metallurgy, and Exploration, Inc. (SME) concerning specific issues related to the public reporting of mineral resources and mineral reserves. These recommendations, including the proposed 2005 SME Guide, were submitted to the Staff of the U.S. Securities and Exchange Commission (the SEC) on April 30, 2005 for its consideration. It is the Working Group's opinion that accepting these recommendations would result in significantly improved public reporting. However it is important to keep in mind that these are only recommendations. The SEC rules and regulations and related interpretations for mining companies engaged or to be engaged in mining operations currently differ from the recommendations made by the Working Group in its submission to the SEC. Questions or comments concerning the Working Group and its recommendations can be addressed by mail or electronically to: Electronically:

By mail:

Jean-Michel (J.M.) Rendu J.M. Rendu, Chairman, Resources and Reserves Chairman, Resources and Reserves Committee Committee [email protected] Society for Mining, Metallurgy, and Exploration, Inc. Dick Graff, CPA, Co-chairman, Resources and 8307 Shaffer Parkway Reserves Committee Littleton, Colorado 80127 [email protected] U.S.A.

INDEX

Click on the links below to view individual chapters separately, or click here to view the entire document. (2,238kb) 1. Introduction and Executive Summary 1.1. Introduction 1.2. Executive Summary 2. Background Background 3. Formation of the "SEC Reserves Working Group" Table 1: Composition of SEC Reserves Working Group 4. Review Process Table 2: Composition of Coal Review Group 5. Relationship between Reserve Reporting and Financial Reporting Relationship between Reserve Reporting and Financial Reporting 6. Objectives and Governing Principles 6.1. Objectives 6.2. Governing Principles 6.3. Document Outline 7. Issue A: Commodity Pricing Guidelines 7.1. Issue 7.2. Current Requirements and Practices 7.3. Discussion 7.4. Working Group Recommendations 7.5. Additional Remarks Concerning Use of Standardized Prices 7.6. Text to be Included in the 2005 SME Guide 7.7. Supplemental Information: Price Cycles 8. Issue B: Publication of Mineral Resources 8.1. Issue 8.2. Current Requirements and Practices 8.3. Discussion 8.4. Working Group Recommendations 8.5. Justification of Recommendations 8.6. Text to be Included in the 2005 SME Guide 9. Issue C: Technical and Economic Study Requirements 9.1. Issue 9.2. Current Requirements and Practices 9.3. Discussion

9.4. Working Group Recommendations 9.5. Justification of Recommendations 9.6. Text to be Included in the 2005 SME Guide 10. Issue D: Permitting and Legal Requirements 10.1. Issue 10.2. Current Requirements and Practices 10.3. Discussion 10.4. Working Group Recommendations 10.5. Justification of Recommendations 10.6. Text to be Included in the 2005 SME Guide 11.1 Issue E: Competent Person 11.1. Issue 11.2. Current Requirements and Practices 11.3. Discussion 11.4. Working Group Recommendations 11.5. Text to be Included in the 2005 SME Guide 12. Coal, Industrial Minerals, Diamonds and Other Gemstones 12.1. Introductory Remarks 12.2. Reporting of Coal Resources and Coal Reserves 12.3. Reporting of Mineral Resources and Mineral Reserves for Industrial Minerals 12.4. Reporting of Mineral Resources and Mineral Reserves for Diamonds and Other Gemstones APPENDIX 1: U.S. Securities and Exchange Commission, Division of Corporation Finance, Industry Guide 7 APPENDIX 2: The 1999 SME Guide: A Guide for Reporting Exploration Information, Mineral Resources, and Mineral Reserves APPENDIX 3: The 2005 SME Guide for Reporting Exploration Results, Mineral Resources, and Mineral Reserves