Lesson 2: General Concepts

Question 1

a Canadian mining company, claimed to have discovered one of the world’s largest gold deposits in Busang, Indonesia, in the mid-1990s

Answer 1

Bre-X Minerals Ltd

Question 2

In what year revealed that the gold samples had been fraudulently “salted” with gold from external sources to inflate the deposit’s value?

Answer 2

1997

Question 3

It is a standardized framework for reporting exploration results, mineral resources, and ore reserves, modeled after international standards like Australia’s JORC Code and Canada’s NI 43-101, to ensure reliable, transparent, and competent public reporting verified by competent persons (CPs).

Answer 3

Philippine Mineral Reporting Code (PMRC)

Question 4

the Geological Society of the Philippines (GSP) adopted the Philippine Mineral Reporting Code 2007 Edition (PMRC 2007) or “the Code”

Answer 4

July 2007

Question 5

Establishment of the Philippine Mineral Reporting Code Committee (PMRCC) as parent organizations, forming the National Reporting Organization (NRO)

Answer 5

November 22, 2018

Question 6

Five mineral industry-related Organizations (Associate Organizations)

Answer 6

1. Philippine Stock Exchange (PSE)
2. the Chamber of Mines of the Philippines (COMP)
3. the Philippine Mining and Exploration Association (PMEA)
4. the Philippines-Australia Business Council (PABC)
5. Philippine Chamber of Coal Mines (PHILCOAL)

Question 7

the GSP Board of Trustees approved Board Resolution No. 2020-004 creating the Mineral Reporting Code Committee (MRCC) in order to fully fulfill GSP’s obligations and responsibilities to the PMRCC

Answer 7

December 17, 2020

Question 8

authorized by GSP to prepare PMRC compliant Public Reports on Exploration Results, Exploration Targets and/or Mineral Resources in accordance with the requirements of the PSE, SEC, MGB, and possibly DOE in the future

Answer 8

ACP-Geologists

Question 9

the SEC approved the Philippine Mineral Reporting Code 2020 Edition (PMRC 2020) which replaced the PMRC 2007 and instructed the Philippine Stock Exchange (PSE) to implement it immediately

Answer 9

September 2021

Question 10

It requires that the reader of a Public Report is provided with sufficient information, the presentation of which is clear and unambiguous, so as to understand the report and not to be misled by this information or by omission of material information that is known to the Accredited Competent Person (ACP).

Answer 10

Transparency

Question 11

_______ requires that a Public Report contains all the relevant information which investors and their professional advisers would reasonably require, and reasonably expect to find in the report, for the purpose of making a reasoned and balanced judgment regarding the Exploration Results, Mineral Resources or Mineral Reserves being reported. Where relevant information is not supplied, an explanation must be provided to justify its exclusion.

Answer 11

Materiality

Question 12

_______ requires that the Public Report be based on work that is the responsibility of suitably qualified and experienced persons who are subject to an enforceable professional code of ethics (the ACP).

Answer 12

Competence

Question 13

Data and information obtained from initial exploration activities, including sampling, drilling, and fieldwork, that indicate potential mineralization.

Answer 13

Exploration Results

Question 14

Estimated from limited geological evidence and sampling, with low confidence.

Answer 14

Inferred

Question 15

Concentrations of minerals with reasonable prospects for economic extraction, classified into three categories based on increasing geological confidence

Answer 15

Mineral Resources

Question 16

Estimated with sufficient confidence to allow for mine planning and evaluation of economic viability.

Answer 16

Indicated

Question 17

High level of confidence, based on detailed and reliable exploration data.

Answer 17

Measured

Question 18

Economically mineable parts of measured or indicated mineral resources, after considering modifying factors.

Answer 18

Mineral Reserves

Question 19

Economically viable with sufficient confidence from indicated mineral resources.

Answer 19

Probable

Question 20

The highest level of confidence, derived from measured mineral resources.

Answer 20

Proved

Question 21

Considerations affecting the conversion of resources to reserves, including mining, processing, metallurgical, economic, marketing, legal, environmental, infrastructure, social, and governmental factors.

Answer 21

Modifying Factors

Question 22

These are considerations used to convert Mineral Resources to Mineral Reserves. These include, but are not restricted to, mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social, and governmental factors.

Answer 22

Modifying Factors

Question 23

Read: Measured Mineral Resources may be converted to either Proved Mineral Reserves or Probable Mineral Reserves. The ACP may convert it because of uncertainties associated with some or all of the Modifying Factors which are taken into account in the conversion from Mineral Resources to Mineral Reserves. This relationship is shown by the broken arrow. Although the trend of the broken arrow includes a vertical component, it does not, in this instance, imply a reduction in the level of geological knowledge or confidence. In such a situation these Modifying Factors should be fully explained.

Answer 23

T

Question 24

A statement or estimate of the exploration potential of a mineral deposit in a defined geological setting where the statement or estimate, quoted as a range of tonnage and a range of grade (or quality), relates to mineralization for which there has been insufficient exploration to estimate a Mineral Resource.

Answer 24

Exploration Target

Question 25

It include data and information generated by mineral exploration programs that might be of use to investors, but which do not form part of a declaration of Mineral Resources or Mineral Reserves. The reporting of such information is common in the early stages of exploration when the quantity of data available is generally not sufficient to allow any reasonable estimates of Mineral Resources.

Answer 25

Exploration Results

Question 26

A concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade (or quality), contlnulty, and other geological characteristics of it are known, estimated or interpreted from specific geological evidence, including sampling. These are subdivided, in order of increasing geological confidence, into inferred, Indicated, and Measured categories.

Answer 26

Mineral Resource

Question 27

It is that part of a Mineral Resource for which quantity and grade (or quality) are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality) continuity. It is based on exploration, sampling, and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes.

Answer 27

lnferred Mineral Resource

Question 28

It has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. it is reasonably expected that the majority of it could be upgraded to Indicated Mineral Resources with continued exploration.

Answer 28

Inferred Mineral Resource

Question 29

It is that part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to support mine planning and evaluation of the economic viability of the mineral deposit.

Answer 29

lndicated Mineral Resource

Question 30

It is derived from adequately detailed and reliable exploration, sampling, and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation.

Answer 30

Geological evidence

Question 31

It has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a Probable Mineral Reserve.

Answer 31

lndicated Mineral Resource

Question 32

A part of a Mineral Resource for which quantity, grade (or quality), densities, shape, and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine planning and final evaluation of the economic viability of the mineral deposit.

Answer 32

Measured Mineral Resource

Question 33

It is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses, which may occur when the material is mined or extracted and is defined by studies at Pre-Feasibility or Feasibility level as appropriate that include application of Modifying Factors. Such studies demonstrate that, at the time of reporting, extraction could reasonably be justified.

Answer 33

Mineral Reserve

Question 34

It is an order-of—magnitude technical and economic study of the potential viability of Mineral Resources which includes appropriate assessments of realistically assumed Modifying Factors together with any other relevant operational factors that are necessary to demonstrate at the time of reporting that progress to a Pre-Feasibility Study can be reasonably justified.

Answer 34

Scoping Study

Question 35

It is a comprehensive study of a range of options for the technical and economic viability of a mineral project that has advanced to a stage where a preferred mining method, underground or surface, has been established and an effective method of mineral processing has been determined. It includes a financial analysis based on reasonable assumptions on the Modifying Factors and the evaluation of any other relevant factors which are sufficient for an ACP, acting reasonably, to determine if all or part of the Mineral Resource may be converted to a Mineral Reserve at the time of reporting. It has a lower confidence level than a Feasibility Study.

Answer 35

Pre-Feasibility Study

Question 36

It is the economically mineable part of an Indicated, and in some circumstances, a Measured Mineral Resource. The confidence in the Modifying Factors applying to it lower than that applying to a Proved Mineral Reserve. It has a lower level of confidence than a Proved Mineral Reserve but is of sufficient quality to serve as the basis for a decision on the development of the mineral deposit.

Answer 36

Probable Mineral Reserve

Question 37

It is the economically mineable part of a Measured Mineral Resource. It implies a high degree of confidence in the Modifying Factors. A Proved Mineral Reserve represents the highest confidence category of reserve estimate. The style of mineralization or other factors could mean that are not achievable in some mineral deposits. ACPs should be aware of the consequences of declaring material of the highest confidence category before satisfying themselves that all of the relevant resource parameters and Modifying Factors have been established at a similarly high level of confidence.

Answer 37

Proved Mineral Reserve