For Industry Discussion -- this is the newly issued (August 2006) South African Code for the Valuation of Mineral Assets. The guiding principles of the code are:

  • Materiality: The Public Report should contain relevant information that investors and their professional advisors would reasonably require and expect to find in a report that may be used to make a reasoned and balanced judgment of Exploration Results, Mineral Resources, and Mineral Reserves.
  • Transparency: The Public Report should provide sufficient information, the presentation of which is clear and unambiguous, to enable the user to understand the report and not be misled.
  • Competency: The Public Report should be based on the work of responsible, qualified, and experienced persons who are subject to an enforceable professional Code of Ethics.
  • Impartiality: The author of the Public Report should be satisfied that his/her work has not been unduly influenced by the organization, company, or person commissioning the Public Report or any report that may become a Public Report, that assumptions are documented, and that adequate disclosure is made of material aspects that the informed reader may require in order to make a reasonable and balanced judgment.

The Code requires that a Mineral Asset Valuation Report contain these elements:

  1. Executive Summary
  2. Introduction and Scope
  3. Restrictions
  4. Compliance with Standards
  5. Property Being Valued
  6. History of Activities
  7. Geology
  8. Mineral Resources
  9. Modifying Factors, Assumptions, Key Risks.
  10. Valuation Approaches and Methods
  11. Valuation Summary
  12. Valuation Conclusions, including ranges of values, best estimate, and restrictions.
  13. Sources of Data
  14. Previous Valuations
  15. Competency of Valuator
  16. Report Date
  17. Other reports
  18. Names and Qualifications of Competent Persons.

About half the 48 pages of the Code is given over to an Appendix on Valuation Methodology Guidelines. Interesting stuff--much of it reminded me of what I read in the software by Palisade on Decision Making. I wonder if this software can be used in South African Valuations?