Summary of Comparison Joint Ore Reserves Committee 2012 Edition and Kode Cadangan Mineral Indonesia 2011 Edition
KCMI 2011 Scope 1. The KCMI 2011 declares the scope of 1. application of the code to industrial minerals, coal, gemstones and diamond. Especially legal letter for Coal (SNI 5015:2011) and Mineral (SNI 4726:2011)
JORC 2012 The JORC clarifies the scope of application of the Code to all solid minerals, diamonds, gemstones, industrial minerals and coal
Competency of Competent Person 2. Competent Person just only member of 2. Competent Person could to declares PERHAPI and IAGI himself without the legitimate Institution into control election as Competent person. Reporting Term 3. Existence of resources hypothetical, 3. There is no resources hypothetical the number of area investigation what term calculated based on data and fulfilled all of the requirements are considering when do to survey Geological Perspective 4. The KCMI code presuppose about 4. Methodology implantation JORC more complexity geology structure more depend on Competent Person such as than JORC based Indonesia regulate procedure. stratigraphy what used.
5. Classification of coal based on caloric 5. JORC is considering about coal more energy, the requirements of the simple than KCMI such as there is no distance between the drill holes, as modelling coal seam thickness based well as the quantitative requirements sedimentary process of coal seam thickness and the impurity to be mined Reporting 6. Aspects of reporting, there is a 6. Aspects of reporting, JORC is more standard table that describes the final complex than KCMI causes there are status of resources and reserves of table check list of assessment and coal and mineral clearly what located reporting criteria, included technical in supplement and sampling data, results of exploration, reserves even market study. Furthermore, JORC reporting is
7. Mineable and marketable term not explained by KCMI 2011, just proved ore reserves through modifying factors.
detail but not specific what depend on Competent person. 7. The JORC 2012 enable classify of coal reserves commodities to can be claimed what JORC called “mineable reserve” and “marketable reserve”.
8. Not to control about information and 8. JORC have sense of correlation market data based on market study study and results of exploration. economically correlation by results of Therefore, public knows this financial exploration company who implemented open data and increase confidence level on public. Enable will be required from time to time 9. KCMI have standard operational of 9. JORC is not designed covering coal exploration about Coal (SNI standardized with steps exploration 5015;2011) and Mineral (SNI by defaults 4726;2011) Legitimate Institution 10. Institution related: PERHAPI 10. Institution related: The Australasian (Perhimpunan Ahi Pertambangan Institute of Mining and Metallurgy, Indonesia) and IAGI (Ikatan Ahli Australian Institute of Geoscientists, or Geologi Indonesia) Recognized Overseas Professional Organization (ROPO) Business Sector 11. The KCMI Code is the required 11. The JORC Code is the required reporting code for public reporting of reporting code for public reporting of exploration results in Indonesia exploration results, mineral resources, Exchange (IDX). In 2017, the and ore reserves in Australia, New regulation will do it. Zealand and Papua New Guinea 12. The JORC Code is an accepted standard for reporting to the Singapore Exchange, Hong Kong Stock Exchange, Australian Securities Exchange (ASX) and New Zealand Exchange (NZX)
References: Team Perhapi, et all. 2011. Kode Cadangan Mineral Indonesia. Indonesia Team AusIMM, et.al. 2012. Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves (JORC 2012 Edition). Australia
Case Study Joint Ore Reserves Committee 2012 Edition and Kode Cadangan Mineral Indonesia 2011 Edition Case Study I Poseidon Nickel Bubble Nickel mining took a long time to get going in Australia, but when it did, it did so in a spectacular fashion, fueling a frenzy that Business Insider recently included on its list of the 10 most ridiculous price bubbles in history. In December 1965, Western Mining M ining Corporation (WMC), acting on information from two local prospectors, commenced diamond drilling in the Kambalda region and intersected 2.75 meters grading 8.3-percent nickel. WMC announced the find on April 4, 1966, and other discoveries soon followed. The most memorable find was made by Ken Shirley, a prospector with Poseidon, who discovered nickel deposits at Mount Windarra and staked around 40 claims in the area. The timing was fortuitous: the Vietnam War was pushing up nickel demand, while a strike at Inco’s mines in Canada was crippling supply. The result was a sharp rise in nickel prices. Speculators put two and two together and sent Poseidon’s stock on an incredible ride, from $1.85 in September 1969 to a peak of $280 in February 1970. That fueled a bubble in shares of Australian junior miners that went well beyond nickel. “Any penny stock, it was believed, could make you rich overnight,” mining journalis t Trevor Sykes told ABC’s Radio National in 2007. “And so Poseidon, when it roared off for the wild blue yonder, dragged a whole ragtag and bobtail of other penny stocks along with them. All sorts of things became believable. To give you an example: there was a little stock called Pursuit Oil down in Victoria, which in one o ne trading session ran from 4 cents to 12 cents. And I was spending most of the day as a reporter at the Melbourne Sun trying to find out why.” However, grades at the mine ended up being about half of the 3.6 percent originally reported. That, combined with higher-than-expected costs and a fall in nickel prices, forced Poseidon into receivership in 1975. Mount Windarra, however, carried on. WMC acquired it in 1974 and operated it until 1991, when low nickel prices forced the company to shut the project down. All was quiet at the site until 2006, when it was acquired by Niagara Mining, which was later renamed Poseidon Nickel (ASX:POS) in honor of the original discoverers. It is now conducting underground drilling at the site and has defined a JORC-compliant resource of 3.95 million MT grading 1.73-percent nickel, for a total of 68,300 MT of contained nickel metal, according to the company’s website. Another example of an Australian junior that has attracted investor attention is Rox Resources (ASX:RXL), which continues to report positive results from its Camelwood nickel sulfide prospect at its Fisher East project in Western Australia. The company’s latest assay results, which it released on March 21, include 16.3 meters grading 1.8percent nickel, including 6.3 meters grading 2.5-percent nickel and 0.47 meters grading 5.4 percent.
Case Study II The Bre-X Story The most infamous case of stock scamming in the history of mining has to be that of BreX which blew the lid off its supposed pot of gold in 1997 and sent repercussions around the world. Several major mutual funds and a number of banks were heavily invested into Bre-X with upwards of 7 to 20% of their funds involved when it crashed. Bre-X Minerals first announced it had discovered the largest gold deposit in the world at Busang on the island of Borneo in Indonesia in 1994. A lot of people showed immediate interest – geologists, mining companies, stockbrokers and investors. Initially blinded by the glitter, only later did they realize they had been taken by one of the oldest scams in mining – "salting" of samples with gold. When an independent study of the samples finally occurred, the faking hadn't even been done well – when examined under a microscope some samples contained shavings from gold jewelry. In two days, Bre-X stock dropped 85%, losing $3 billion in market value. At the same time, two Bre-X executives moved to the Caribbean, and a key geologist apparently committed suicide. Bre-X was founded by David Walsh in 1988, after leaving his position as a stockbroker. He operated the firm out of the basement of his home. Bre-X began trading on the Alberta Stock Exchange in July 1989 but it soon began to waste away as Walsh was unable to secure sufficient funding to explore their mineral claims. He spent most of 1992 and 1993 in personal bankruptcy, but then using his last $10,000, he flew to Indonesia and met with John Felderhof, a graduate from Dalhousie University and one of the geologists who had discovered the giant Ok Tedi deposit in Papua-New Guinea in 1968. Felderhof hired a geologist friend named Michael de Guzman from The Philippines and soon after, the company began drilling for gold. Busang consisted of three properties: Busang I (Central Zone), in which Bre-X Bre -X had purportedly acquired an 80 percent interest; Busang II (Southeast Zone), in which Bre-X purportedly acquired a 90 percent interest; and Busang III (Northwest Zone), in which Bre-X purportedly acquired a 90 percent interest. Bre-X announced its acquisition of the Central Zone property in a press release dated July 19, 1993 which also declared commencement of a drilling program to delineate the potential productivity of Busang, "which is believed to contain an open-pit resource of 20 million tonnes at +2 gm/tonne gold (equivalent to 1,000,000 ounces of gold)" – a good starting size orebody for a junior. Within about 18 months, Bre-X claimed to have "proven" the existence of 71 million ounces of gold, worth about $25 billion. Felderhof in fact, began touting that there were at least 200 million ounces in the ground. Egizio Bianchini, a stockbroker for NesbittBurns and reputedly at the time, one of Canada's top gold analysts, was quoted as follows "What most people are now realizing is that Bre-X has made one of the great gold discoveries of our generation." Another broker, Kerry Smith – a mining engineering graduate from Queen's University, who worked for First Marathon, also became a major advocate of the stock. 7 The actions of Bre-X essentially conditioned the market to believe that Busang was one of the richest goldfields ever discovered and that the profits from this discovery would be enormous. The company published ever-increasing amounts of o f gold in the deposit on a weekly and sometimes, daily basis. The price of Bre-X shares rapidly rose from a few pennies to a high of $250 Canadian per share (before a 10 for 1 split). Bre-X became the star of the gold investment community and many members of the general public became convinced c onvinced that the company owned a massive and uniquely profitable gold deposit – the largest one
ever discovered. The company's descriptions of gold-laden drill samples were accepted as proof of the Company's claims until independent drilling and analysis revealed that a the massive deception had been committed by certain company employees. The Bre-X saga is now known as the gold fraud of the century. The whole play began to unravel in the spring of 1997 just after the annual Prospectors and Developers Association of Canada Convention in Toronto – a meeting at which Felderhof was named Prospector of the Year and Walsh received the Developer of the Year award. Within days, Bre-X shocked the investment world by announcing that an interim report provided by its independent mining consultant concluded there was "a strong possibility" that prior estimates concerning the quantity of gold at Busang "have been overstated because of invalid samples and assaying of these samples." On the same day of this announcement, Freeport McMoRan Gold & Copper, Inc., which had recently been selected as Bre-X's major partner, reported its own due-diligence analyses of seven core samples that "indicate insignificant amounts of gold." That news came exactly one week after the death of Bre-X's chief geologist M ichael de Guzman, who supposedly jumped to his death from a helicopter while traveling to Busang to meet with representatives of Freeport to discuss the assay results. A rambling suicide note was left behind.
References : http://investingnews.com/daily/resource-investing/base-metals-investing/nickelinvesting/inside-the-booms-and-busts-of-the-australian-nickel-business/ accessed on April 29th 2016 at 10:41 AM
http://www.infomine.com/library/publications/docs/Meech.pdf accessed on April 29th 2016 at 11;06 AM
Summary of Comparison and Case Study Joint Ore Reserves Committee 2012 Edition and Kode Cadangan Mineral Indonesia 2011 Edition
Achmad Juanzah 12113043
Mining Engineering Faculty of Mining and Petroleum Engineering Institut Teknologi Bandung 2016
