The correct reference for the SAMVAL Code is:

The SOUTH AFRICAN CODE FOR THE REPORTING OF MINERAL ASSET VALUATION (the SAMVAL Code or ‘the Code’) sets out minimum standards and guidelines for Reporting of Mineral Asset Valuation in South Africa.

An important characteristic of the extractive industries that sets them aside from other industries or economic sectors is the depletion or wasting of natural resources that cannot be replaced in their original state once extracted. The agent of production is extraction of mineral-bearing and associated materials from the Earth. The ultimate quantity and quality of material of economic interest that might be extracted from a property is often not known at the date of valuation. As a result, the valuation process relies on multiple technical and economic inputs, and therefore the Competent Mineral Asset Valuator (CV) needs to have an understanding of these, in order to conduct the valuation. This sets apart the Mineral Asset Valuation profession as being a specialist area of valuation.

The SAMVAL Code forms a part of the SAMCODES document, and as such relies upon the requirements of the SAMREC Code (The South African Code for the Reporting of Exploration Results, Mineral Resources and Mineral Reserves) for the reporting of Mineral Resources and Mineral Reserves, where necessary, and it draws on, and cross-references to, definitions and principles embodied within the SAMREC Code as well as the South African Code for the Reporting of Oil and Gas Resources (the SAMOG Code) for the estimation and valuation of petroleum assets. This is in the area of Public Reporting in South Africa, but applies equally to reports that may be deemed to be ’non-public’. (In certain instances, it may also rely on Competent Person’s Reports that are based on other Mineral Resource and Mineral Reserve Codes).

The Code is intended to form the basis of best practice in Mineral Asset Valuation and Reporting while allowing for flexibility through effective professional judgement and specific local provisions and/or conditions. The scope in terms of asset type and ownership issues is limited principally to the valuation of mineral assets, including valuation of the Mineral Resources and Mineral Reserves at any point on the value curve, including real and personal property associated with the asset being valued. The valuation of oil and gas assets is dealt with in the SAMOG Code.

The guiding philosophy and intent of the SAMVAL Code is that Mineral Asset Valuations should be performed by Competent Mineral Asset Valuators (CVs), and all relevant information fully disclosed. The SAMVAL Code is based on best practice and Generally Accepted Valuation Standards in the minerals industries and allows for professional judgement.

Valuation is the estimation of the Value of a Mineral Asset in money or monetary equivalent. The word “valuation” can be used to refer to the estimated value (the Valuation conclusion) or to the preparation of the estimated Value (the act of valuing)’. The word ‘valuation’ is synonymous with the word ‘appraisal’ as used in certain countries. In contrast, the word ‘appraisal’ is used in Australia for the broader activity of evaluation, including the preparation of Resource and Reserve estimates.

An evaluation of a Mineral Asset, as defined in this Code, is a broad physical, legal, economic, and other assessment, generally sought for an investment decision. Evaluations include Feasibility Studies, Prefeasibility Studies, and Scoping Studies. For clarity, evaluation is distinct from valuation. The underlying reason for having a Code for the valuation of Mineral Assets is to provide consistency and minimum standards, as well as guidance, for Mineral Asset Valuation professionals. This limits unscrupulous valuations, which could result in severely compromising the interests of investors and potential investors.