Role of the Competent Person
At the centre of this declaration is the Competent Person who takes responsibility for the declaration. In order to take that responsibility, the designated Competent Person must be sure that they fully understand the meaning of that designation and the responsibilities that go with it and must be satisfied in their own mind that they can face their peers and demonstrate competence in the commodity, type of deposit and situation under consideration’ (SAMREC Code Clause 10). The Competent Person is not only required to be registered as a professional but must be able to attest to having a minimum of five years of relevant professional experience in the nature of the work that he/she undertook as well as in the deposit type or style of mineralisation.
The Competent Person is also required to a member of a professional/learned society (GSSA, SAIMM, IMSSA) or registered with a statuary organisation (SACNASP, ECSA, SAGC) or a recognised professional organisation (RPO). These organisations are specifically required to have both a code of ethics and a disciplinary code. The intention is not to punish the professional, but merely to have a mechanism that holds them to account. The SAMREC Code stipulates that these professionals must be able to face their peers and defend their work if required. However, it is important to note that even properly and professionally investigated mineral assets are not necessarily economic, nor does a SAMREC compliant declaration or CPR, necessarily mean that it is a good investment.
The work undertaken can include geological work (exploration management, sampling, geological modelling), mineral resource estimation, mining engineering (mine design and scheduling), mechanical/electric/civil engineering, process/metallurgical engineer or environmental/social assessments. The key professions in Public Reporting and declarations in terms of the Code are geologists, surveyors, and mining engineers. They are naturally supported by a number of other professionals such as economists, metallurgists, engineers (geotechnical, ventilation, civil, mechanical, electrical etc.), process engineers, environmentalists, social scientists/practitioners, and lawyers etc. Typically, a single individual cannot have all the required professional experience and knowledge in all of these fields so the SAMREC Code has provided for a lead Competent Person who needs to ensure that the necessary professionals have undertaken each aspect of the work and verify that the work is of the appropriate standard to support the public disclosure or declaration. Each professional should provide written disclose to this effect, for their contribution to the project.
The Code has provided a comprehensive checklist for the Competent Person in the form of Table 1 which will assist the Competent Person to ensure they have addressed all the necessary aspects and can easily defend themselves to their peers. If completed properly, it can provide the Competent Person with the assurance that there are no technical inputs or practices that have not been considered. It would also provide the users of the statement with the confidence that the declaration is fully compliant and can be completely relied upon. The Code has included a requirement to report against Table 1 on an ‘if not, why not basis’ for maiden declarations and when a material change in the declaration has occurred for a significant project/mine, although it is recommended for all statements. The motivation for this requirement is to ensure ‘transparency’ and ‘materiality’ as well as making it much harder to be ‘opaque’ or ‘selective’ reporting in market releases or other public reporting. Thus ‘if not, why not’ reporting increases the confidence in public reporting, as well as assists the Competent Person to include all aspects that a reasonable investor would expect to find in a Public Report. Furthermore, the reporting mechanism supports the Competent Person to provide all relevant details, whether they are perceived as positive or negative, in the Public Report.
The Code has definitions for Prefeasibility Study (PFS) and Feasibility Study (FS). These definitions are relevant as the minimum requirement for the declaration of a Mineral Reserve is a Prefeasibility level study. The detailed requirements, although broadly understood, are frequently selectively considered. To assist in providing a common understanding Table 2 which has been included in the Code to provide some detail and reduce the ambiguity of the definitions. It must be noted that these are generally recognised guidelines and not fixed definitions.