Issue date: 5 September 2013
Effective date: 27 September 2013
Listing Rules 624, 749, 750, 1014(2) and 1207(21)
1.1 This Practice Note sets out guidance on the requirements for mineral, oil and gas companies.
1.2 Exploration, development or production of mineral, oil or gas may be considered as principal activities of the issuer if the mineral, oil and gas activity of the issuer and/or its subsidiaries, based on the issuer's latest audited consolidated financial statements: (i) represents 50% or more of the total assets, revenue or operating expenses of the group; or (ii) is the single largest contributor based on any of the tests in (i) above.
The issuer is required to make an announcement when any of the above situation occurs and will thereafter be required to comply with all the continuing listing rules applicable to mineral, oil and gas companies.
1.3 A mineral, oil and gas company must demonstrate plans to obtain all necessary approvals required to proceed with development. The qualified person must provide basis for expecting that all required approvals will be granted and the directors must provide evidence of the company's intention to proceed with development within a reasonable time frame. The qualified person should highlight and discuss any material unresolved matter that is dependent on a third party on which extraction is contingent.
1.4 Rule 210(9)(a) requires a mineral, oil and gas company to have a meaningful portfolio of reserves. A portfolio would be considered to be meaningful if the quantity of reserves is of sufficient substance. The 'reserves' must be able to generate sufficient revenues through production to support the plans to proceed with development.
1.5 For ease of reference, the following sets out the Listing Rules specifically applicable to mineral, oil and gas companies:
Other generally applicable Listing Rules also apply to mineral, oil and gas companies.
2. General Requirements for Disclosure of Reserves, Resources or Exploration Results
2.1 All mineral, oil and gas companies must comply with the following requirements:
(a) All statements and reports in relation to reserves, resources or exploration results must be prepared and presented in accordance with a Standard. The listing applicant or issuer must state in the offer document, circular or announcement, as the case may be, the Standard used.
(b) Tabulated estimates reserves
and resources should be presented in the format as set out in Appendix 7.5
(c) Assay results must include disclosure of the analytical methods used and the name of the analytical laboratories which assayed the material sampled, together with details of their relationship, if any, to the listing applicant or issuer. The accreditation of each laboratory, or lack thereof, must also be disclosed.
3. Additional Disclosure Requirements for Offer Document
3.1 In addition to paragraph 2 of this Practice Note, the prospectus, offering memorandum or introductory document relating to a mineral, oil and gas company must include the following:
(a) Information required in paragraphs 1.3 and 1.4 above;
(b) the directors' opinion which must state, without requiring a profit forecast that in their reasonable opinion, the working capital available to the applicant is sufficient for the present requirements and for at least 18 months after listing;
(c) a statement by the listing applicant that no material changes have occurred since the effective date of the qualified person's report. Where there are material changes, these should be prominently disclosed together with a statement that the listing applicant will as soon as practicable following its listing, announce the qualified person's report or the independent qualified person's report, as the case may be, on the material changes in accordance with Rule 750
(d) the listing applicant's plans and milestones to advance to production stage with capital expenditure for each milestone for an issuer applying for listing pursuant to Rule 210
(9)(g). These plans must be substantiated by the opinion of an independent qualified person;
the listing applicant's policies and practices in relation to operating in a sustainable manner, including:
(i) the listing applicant's policy with regards to environmental and social issues;
(ii) impact of the listing applicant's business practices on the environment and the communities in which it operates; and
(iii) environmental and social risks faced by the listing applicant.
(f) In relation to a listing applicant whose principal activities consist of exploration for mineral, oil or gas, a clear and prominent statement on the front cover highlighting that fact, that the listing applicant may not progress to the next stage of development or to a stage where it is able to generate revenue; and industry-specific risks.
4. Additional Continuing Obligations
4.1 In addition to paragraph 2 of this Practice Note, a mineral, oil and gas company must also comply with the following:
(a) Exploration, development and production activities must be reported in a timely and responsible manner. If the issuer releases partial results, e.g. the first two holes of a six hole program, it must ensure that the balance of the results are disclosed in a timely manner whether the results are positive or negative.
(b) Where work has been discontinued on properties about which the issuer has made prior disclosure, there must be further information provided as to any undisclosed results and reasons for the cessation of work.
5. Qualified Person's Report
5.1 The qualified person's report must be prepared in accordance with a Standard.
5.2 The qualified person must review the information contained in the offer document, circular or announcement, as the case may be, which relates to the qualified person's report and confirm that the information presented is accurate, balanced, complete and not inconsistent with the qualified person's report. The qualified person's report must not include blanket disclaimers or contain indemnities for fraud and gross negligence. If the qualified person's report includes a statement on the qualified person not accepting any responsibility for the completeness or adequacy of the information provided by the company and its advisors and for information extracted from public sources, this qualification must be subject to the qualified person having: (i) made reasonable enquiries and exercised his judgment on the reasonable use of such information; and (ii) found no reason to doubt the accuracy or reliability of the information.
A qualified person's report must include the following:
(a) Executive summary
• Full name, and if applicable, the partner/director in charge of the report; professional qualifications, years of relevant experience, Professional Society Affiliations and Membership (including details of a recognised professional association) of the qualified person and the address of the qualified person's firm/company;
• Aim of the report;
• Scope of the report;
• Basis of the report — including data sources, data validation and reliance on other experts; and
• Standard used
Property description, size, location, access, natural and cultural environment, including:
• listing applicant's/issuer's assets and liabilities, including the following summary table of assets:
Asset name/ Country
Issuer's interest (%)
Licence expiry date
Type of mineral, oil or gas deposit
• nature and extent of listing applicant's/issuer's rights of exploration or extraction; and
• description of the economic conditions for the working of the licenses, concessions or similar, with details of the duration and other principal terms and conditions of the concessions including fiscal conditions, environmental and rehabilitation requirements, abandonment costs and any necessary licenses and consents including planning permission.
(d) History of the property, including exploration history and any production history
(e) Geological and geophysical setting, type and characteristics of the deposit/accumulation
(f) Exploration data including drilling and sampling, sampling and analysis methods, sample preparation and security, quality assurance and quality control on the sample analyses.
(g) Mineral processing and metallurgical testing, if applicable
Resource and reserve estimates and exploration results, as applicable, in accordance with the relevant Standard, including a summary of reserves and resources in the form of Appendix 7.5
(i) Planned extraction method, processing method, capital costs, operating costs, considerations including social, environmental, health and safety factors that may affect exploration and/or exploitation activities; and production schedule, if applicable
(j) Financial analysis of the operations, taxes, liabilities, marketing if applicable
(k) Interpretation and conclusions
6. Summary Qualified Person's Report
6.1 A summary report prepared by a qualified person shall contain the following:
(a) Appendix 7.5 and a commentary of material changes to the issuer's reserves and resources. The commentary should include information on the changes to the reserves estimates, indicating explanation for the changes (e.g. extensions and improved recovery, technical revisions, discoveries, acquisitions, dispositions, economic factors, production);
(b) with regard to minerals, Table 1 of the JORC Code; and
(c) with regard to oil and gas, paragraphs 5.3(a) and 5.3(b) of Practice Note 6.3.
7. Valuation Report
7.1 The prospectus, offering memorandum or introductory document relating to a mineral, oil and gas company must include a valuation report on the assets of the listing applicant. The valuation report must be prepared by an independent expert in accordance with the VALMIN Code, SPEPRMS or an equivalent standard that is acceptable to the Exchange. The effective date of the valuation report must not be more than 6 months from the date of lodgement of the offer document.
7.2 With regard to any valuation, the following must be disclosed:
(a) the Standard used;
(b) principal assumptions used in arriving at the valuation, including but not limited to, assumed commodity prices, rate of discount and rate of inflation, and the basis for each assumption. Contracted commodity prices must be used where applicable and available. If unavailable, either forecast or constant prices may be used. Where forecast commodity prices are used, this should be accompanied by a statement by the qualified person that such forecast was arrived at after due and careful enquiry and reflects their view of a reasonable outlook of the future;
(c) analysis of the sensitivity of such valuations to variation in the principal assumptions provided in (b) above. In relation to commodity prices, the scenarios must include both constant and forecast prices. In relation to the rate of discount, the scenarios must include the weighted average cost of capital;
(d) an estimate of net present value. If the valuation is arrived at on an alternative basis, an explanation of the basis and the reasons for adopting the basis; and
(e) risk factor in the prospectus highlighting the uncertainties inherent in the assumptions made in arriving at the valuation and the effects they may have on the valuation of the mineral, oil and gas assets and the value of the offering shares.
8. Farm-in and Farm-out Transactions
8.1 A farm-in transaction refers to an acquisition of a partial interest of an existing asset by a company from a third party. A farm-out transaction refers to a sale of a partial interest of an existing asset owned by a company to a third party.
8.2 Farm-in and farm-out transactions are excluded from the requirements in Chapter 10 if they are in the ordinary course of business of the issuer under Rule 1002.
8.3 Where a farm-in or farm-out transaction only changes an issuer's effective interest in the asset, Rule 750 is not applicable. However, the issuer must consider if the transaction needs to be disclosed under Rule 703. If so, the issuer must disclose its new working interest and/or net entitlement.
Added on 27 September 201327 September 2013 and amended on 23 August 201823 August 2018.