SEC okays bourse’s new mining reporting code

08/15/2008

The Securities and Exchange Commission (SEC) has approved the bourse’s Philippine Mineral Reporting Code (PMRC) that is expected to spur investments in the local mining sector with the setting up of world-standard rules to protect infusions in new mining projects.

The code revised the definition on qualifications and type of experience required for investors in a mining company.

The PMRC, which is patterned after internationally accepted standards in the mining industry, sets out the minimum requirements, recommendations and guidelines for public reporting of exploration results, mineral resources and ore reserves undertaken by a Competent Person.

Under the PMRC, a competent person must have a minimum experience of five years in the mineral reporting activity he/she is undertaking.

The competent person, however, may only qualify as such if he is a duly-licensed professional and an active member or fellow of the Philippine Society of Mining Engineers, Geological Society of the Philippines and Society of Metallurgical Engineers of the Philippines.

“We in the PSE (Philippine Stocks Exchange) welcome the SEC’s decision to set a higher standard requirement for the competent person of mining companies. This way, we can assure our investing public that we are providing them not only with material information, but also quality and credible reports on mining and minerals, which will guide them in making investment decisions,” PSE president Francis Lim said.

The PMRC also provides a mandatory system for classification of tonnage and grade estimates according to geological confidence and technical economic considerations.

“This is a positive development for our stock market because the PMRC minimizes the risks our investors are exposed to through proper disclosure. By way of implementing the PMRC, it makes our disclosure reporting compatible with major global mineral reporting standards and elevates the language we use with that of the international codes of South Africa, Canada, Australia and European Union, which is a better way to attract more foreign investors to penetrate our local stock market” Lim added.

“We believe that it will not only curb speculative trading in our listed mining companies but will also help soften market volatility,” Lim said.

PSE data showed that from 2003 to 2007, the market capitalization of mining companies expanded at an astounding rate of 862 percent with its percentage contribution to total domestic market capitalization growing from 0.8 percent to 2.3 percent.

The mining and oil index, the PSE sub-index that tracks the movement of mining shares, last year posted a gain of 85 percent. As of end-July, however, it dropped by 17.9 percent.

The creation of the PMRC is an initiative of the Philippine Minerals Development Institute Foundation together with the PSE, Mines and Geosciences Bureau of the Department of Environment and Natural Resources, Chamber of Mines of the Philippines, Philippines-Australia Business Council, the Board of Investments of the Department of Trade and Industry and the accredited professional organizations.

Governed with the principles of transparency, materiality and competence, the PMRC is particularly patterned after the JORC Code (2004) of Australia.

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