Jargon minefield to be swept

The ASX has launched a review proposing tougher disclosure requirements for mining and energy companies to protect investors from confusing or misleading information. The issues paper flags concerns about how companies report exploration targets and production targets, seeks clearer explanations of production forecasts (including underlying financial assumptions), and looks to align petroleum reporting with international standards. The ASX is aiming for greater clarity without unnecessarily increasing reporting burdens.

The ASX says some companies have been inappropriately using 'exploration targets' to present speculative estimates of tonnes and grade. Exploration targets were not intended to serve as preliminary, low‑confidence resource estimates before there is enough data to report an inferred mineral resource, so the practice can mislead new investors about asset certainty.

Production targets are company forecasts of future output. The ASX raised concerns that some production targets do not fall under the JORC Code (the accepted industry resource reporting standard) and may be used to lure investors. The ASX is considering forcing companies to disclose more about the assumptions behind production targets and what portion depends on further exploration.

Stronger disclosure should make it easier for everyday investors to understand the stage of exploration and the certainty of reported resources, reducing the chance of being misled by speculative claims. That can improve investment decisions. The ASX also says it wants to balance greater transparency with not imposing unnecessary reporting costs on companies.

The JORC Code is the accepted industry framework for measuring and reporting mineral resources. The ASX flagged that some production targets being promoted to investors don't fall under JORC standards, which raises concerns about the reliability of those forecasts and reinforces the need for clearer, more consistent reporting.

Yes. The ASX indicated it wants petroleum company regulations on the Australian bourse brought into line with international standards set out in 2007 by the Society of Petroleum Engineers (SPE), addressing problems caused by cultural differences and varying national reporting standards.

The Australian Shareholders Association welcomed the move. Spokesman Vas Kolesnikoff described the current disclosure regime as complicated and confusing and said greater disclosure on the stage of exploration and resource certainty would improve investors' knowledge.

The ASX is seeking comments on the issues paper to inform its review. According to the article, comments are being sought until January 27. Investors and stakeholders can submit feedback by that date to have their views considered.