Mining Industry Upbeat on Commodities
The Business Day of 4th August 2010 reported that Xtrata CEO Mick Davis was the latest head of a major global mining company to sound an upbeat note on the outlook for commodities, as he outlined plans to spend USD14bn on 15 projects over the next three years to grow output by 50%.
Uploaded: 2010-08-12 00:00:00
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A New Partnership Between Accounting Firms and Venmyn?
Venmyn continues to be at the fore-front of valuations always incorporating at least two of the three valuation methods as prescribed by the various international Mineral Resource reporting codes.
Uploaded: 2010-08-11 00:00:00
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Valuation Curves now with Supporting Document
Venmyn is providing supporting documentation with it's commodity valuation curves (CVCs). These curves have been developed based on the market approch for valuation using a comprehensive database of recent transactions involving various mineral assets.
Uploaded: 2010-08-11 00:00:00
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IAS/SAMREC AWARDS
Gold Fields was honoured with an award for the Best Overall Reporting of Mineral Resources and Mineral Reserves at the Investment Analyst Society (IAS) SAMREC Awards Ceremony, held on the 3rd August 2010, at the Johannesburg Stock Exchange (JSE)
Uploaded: 2010-08-11 00:00:00
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SHORT FORM REPORTS
The current emphasis amongst exhanges is for "clear and concise" reporting. It is preferred that reports are not too lengthly or complicated. However, what is the global attitude towards short form reporting?
Uploaded: 2010-08-11 00:00:00
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Setting a new standard in Mineral Reserve and Resource Reporting
Each new year brings with it a set of updated Mineral Industry Annual Reports and along with these a panel of new judges for the sought after IAS SAMREC Awards. With the whole country being a tad soccer crazy in June and July we postponed announcing the winner until early August.
Uploaded: 2010-07-15 00:00:00
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Calling All Competent Valuators
Last week i attended a SSC Wokring Group meeting to discuss the proposed responses to the IFRS "Extractive Industries" document. There was almost no Competent Valuators represented.
Uploaded: 2010-07-07 00:00:00
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CBM Legislation May Need Refining
The legislation surronding coal bed methane (CBM) may have to be re-examined as a result of confusion relating to multi-commodity applications for the same licence area.
Uploaded: 2010-07-07 00:00:00
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Diamond on the Move
Venmyn has noticed a small but definite increase in the demand for diamond-related work in the last three months. Venmyn is currently completing projects for three diamond companies on projects South Africa, Lesotho, the Democratic Republic of the Congo (DRC) Namibia, Sierra Leone and Botswana.
Uploaded: 2010-07-07 00:00:00
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Firmly Behind Bafana
World Cup fever has taken hold of the mining sectors, and every Friday Venmyn's staff are clad in their yellow Bafana Bafana regalia in support of the South African team. Venmyn has also noticed the same spirit among other companies in the mining sector.
Uploaded: 2010-07-07 00:00:00
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The "Real" Ethiopia
While the world usually associates Ethiopia with the Bob Geldof-publicised image of the pot-bellied child with flies around her eyes in the middle of the desert, Venmyn has found that Ethiopia is a land of contrasts, and that not all of Ethopia conforms to the disturbing that inspired the "Do They Know it's Christmas?" recording.
Uploaded: 2010-07-07 00:00:00
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Extractive Industries Paper
Discussion paper DP/2010/1. Extractive Activities. Comments to be received by 30 july 2010
Uploaded: 2010-07-07 00:00:00
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The International Accounting Standards Board (IASB) Discussion Forum
The SAIMM and GSSA will be hosting a public discussion and panel session to discuss and explore the principles contained in the IASB's Discussion Paper on Extractive Activities and it's impact on industry codes, like SAMREC and SAMVAL
Uploaded: 2010-07-07 00:00:00
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Coal Bed Methane Mining - Is South Africa Lagging Behind?
South Africa has historically depended on coal as an energy resource. This was due to the vast available coal resources and the relative ease of coal mining in the past. However, the situation has changed in recent times due to increases in the demand for electricity and large coal resources that are relatively challenging to mine.
Uploaded: 2010-05-17 00:00:00
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Causes of SA's Drop in Competitiveness
The Fraser Institute survey of 72 mining countries pushed South Africa down to the 61st position, from its 49th position previously. This is shocking to say the least but begs the question "why and what has caused the slippage?"
Uploaded: 2010-05-13 00:00:00
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Probabilistic Approach to Mineral Resource Definition
The classification of a Mineral Resources is based on the confidence one has that the mean grade obtained from a sample is representative of the mean grade of the entire ore body.
Uploaded: 2010-04-21 00:00:00
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Diamonds on the Move?
Venmyn is now seeing activity again and this lendds weight to the industry analyst's view that the demand for rough and polished diamonds is starting to recover. The prices for rough diamonds rebounded strongly in 2009, and particularly in the second part of the year, as a result of decreased mine production and increased purchases of rough stones.
Uploaded: 2010-04-12 00:00:00
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Environmental Liability Issues During Transactions (Part 2)
Venmyn believes that many of these environmental issues can be identified and managed by carrying out a thorough environmental due-diligence process, incorporated in the transaction's overall due-diligence process.
Uploaded: 2009-12-18 00:00:00
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Environmental Liability Issues during Transactions (Part 1)
When mining transactions take place, the potential consequences of environmental liability issues are seldom taken into account. Environmental liabilities may show up as one line in a complicated cash flow model, leading to the underestimation of the importance of these issues.
Uploaded: 2009-12-07 00:00:00
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Inclusive Mineral Resource Reporting Preferred
In terms of the preliminary research, 68% of juniors and mid-tier companies favoured the reporting of mineral resources inclusive of mineral reserves, while 65% of majors favoured the reporting of mineral resources inclusive of mineral reserves.
Uploaded: 2009-11-23 00:00:00
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The Mine Value Chain and its Impact on Mining Houses
The Mineral Resources that a mining business unit accesses generates the embedded value that exists within the unit. It may also provide a competitive advantage.
Uploaded: 2009-11-17 00:00:00
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Comparative Valuation of Exploration Projects
One of the three methods that are advocated by the SAMREC/SAMVAL Codes for valuating mineral exploration projects is the Comparative/Market Valuation approach.
Uploaded: 2009-11-17 00:00:00
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Venmyn Short-Form Reporting Style
Please check out the Gold Fields website and have a look at their new Mineral Resource and Mineral Reserves Overview 2009.
Uploaded: 2009-11-12 00:00:00
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Mining Indaba 2010
It is Africa's most important mining event and the world's leading gathering of global policy makers and project financiers. The Indaba has raised billions of dollars and introduced the international investment community to mining interests throughout the African continent.
Uploaded: 2009-10-29 00:00:00
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Proposed Amendments to Coal Resource Calculation
The South African National Standard - South African guide to the systematic evaluation of coal resources and coal reserves (SANS 10320:2004) is an excellent guideline for the classification of resources and reserves, and as such, is embodied in the SAMREC Code.
Uploaded: 2009-09-16 09:49:24
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Sustainability in a Threatened World
As a recent publication summarised "...we are writing against darkening skies. In the first half of 2008, the scientific evidence that global warming is reaching a dangerous tipping point is incontrovertible.
Uploaded: 2009-09-09 16:45:34
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Compliance and Reporting Rules course starts in September
The minerals-industry environment is changing all the time, with this year seeing the introduction of guidelines for, and several amendments to, the SAMREC and SAMVAL Codes, as well as changes to reporting styles at the JSE.
Uploaded: 2009-08-25 11:28:00
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The Crisis is Over
In the last month or so stocks have enjoyed a great rally and it certainly seems that sentiment is improving. At Venmyn, we are seeing a significant improvement in general activity in the market, particularly with respect to transactions, as investors regain their risk appetite and cash-flush companies begin gobbling up stressed assets.
Uploaded: 2009-08-12 14:58:31
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Commodity Valuation Values
Mining companies are, like never before, faced with the need to value their mineral assets at fair value particularly in case of a proposed transaction...
Uploaded: 2009-08-07 10:00:01
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Beta Calculations
In times of commodity price volatility, how does one give a fair value to a company based on a future commodity price@f7 How does one give a fair assessment of a company when the market indicators are going down at the same time as the share price of that company is going up, or vice versa@f8
Uploaded: 2009-07-28 14:33:58
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Environmental Statements
Venmyn has developed a simple solution to obtaining critical information related to mine environmental compliance in a user friedly manner: the Environmental Statement.
Uploaded: 2009-07-20 13:56:40
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Accounting for Mineral Reserves on the Balance Sheet
The mining industry is characterised by a need for large upfront investment, with low success rates on exploration spending and long lead times on new projects. It also faces significant back-end costs, when mines are eventually closed, in terms of decommissioning the processing facilities, rehabilitating the sites, dealing with residual environmental issues and managing obligations to the workforce and local communities.
Uploaded: 2009-07-15 11:28:23
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Coal Resource Calculation
As we are all aware, the Waterberg coals are characterised by thick zones of interlaminated coal and shale, described as "thick interbedded seam deposit type coal resources" in the South African National Standard (SANS10320:2004).
Uploaded: 2009-07-07 08:31:28
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Will there be a substantial commodity price increase needed when demand returns@f6
Venmyn has carefully reviewed many of the commodity sectors and suggests that whilst all ore deposits are lognormally skewed to lower grade, the production costs are lognormally skewed to the higher costs. Consequently, if a company's strategy is to be in the lower cost quartile their chances of acquiring projects that have sufficient grade flexibility to achieve that objective is low.
Uploaded: 2009-06-29 14:41:36
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Increasing Disclosure, Decreasing Costs
The theme of the recent Investment Analysts Society (IAS) awards dinner was on increasing the level of disclosure for public companies. In stressed times, such as these it is increasingly important for investors to get both good and bad news, and to keep investors informed of developments, progress and strategy.
Uploaded: 2009-06-24 08:50:27
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US Dollar and Commodity Prices and Changes to CPRs
Having more than twenty years experience in preparing public domain documents, it has been frustrating seeing the confusion that exists with respect to understanding the specific form and content of a CPR by clients and the industry at large. This is partly because of the number of codes that exist.
Uploaded: 2009-06-09 09:23:46
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Feasibility Studies
Generally, the concept of what a Feasibility Study is, is well understood by the mining industry, but when companies expedite the process, certain key steps are omitted, mainly due to time and money constraints.
Uploaded: 2009-06-04 16:10:25
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Potential Missing Link in the Minerals Industry Reporting Codes
The introduction of the SAMREC and SAMVAL Codes in the industry as a required minimum standard for the public reporting of exploration results, mineral resources and mineral reserves and the valuation of these mineral assets in South Africa, has significantly improved the quality of information disseminated to mining investors and their professional advisors.
Uploaded: 2009-05-29 16:43:36
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AAPG Explorer article
Uploaded: 2009-05-29 16:42:44
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Fair Value@f5
There have been a number of comments about Fair Value and not least is the issue of what methods should be used and how the values of the various classes of assets are calculated. Fortunately, the mining profession is ahead of the game and the merger of the SAMREC and SAMVAL Codes was fortuitous.
Uploaded: 2009-04-20 10:55:53
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Mergers and Acquisitions
At Venmyn, we strive to offer our clients a wide range of technical services and advice. We are a relatively small advisory firm in a niche market and pride ourselves on our ability to work closely with our clients in small teams that are focused on value creation and delivery.
Uploaded: 2009-04-07 07:56:24
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Be Positive in Difficult Times
Venmyn is still concerned that insufficient attention is paid to valuation of mineral assets and that unnecessary write-downs are destroying balance sheets. Many mining assets and mineral rights are not TOXIC but an option on resource prices.
Uploaded: 2009-04-03 11:17:48
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Will There be A Substantial Commodity Price Increase Needed When Demand Returns@f4
Venmyn has carefully reviewed many of the commodity sectors and suggests that whilst all ore deposits are lognormally skewed to lower grade, the production costs are lognormally skewed to the higher costs. Consequently, if a company's strategy is to be in the lower cost quartile their chances of acquiring projects that have sufficient grade flexibility to achieve that objective is low.
Uploaded: 2009-03-19 10:32:40
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Mineral Resource and Reserve Auditing
Venmyn has created a Mineral Resource classification form which demonstrates the logic behind the classification results. Furthermore, in conjuction with our associate geostatistician, Venmyn frequently undertakes an independent assessment of data variance to quantify the boundaries between Inferred, Indicated and Measured categories
Uploaded: 2009-03-12 15:31:34
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How to handle debt
In the current financial crisis which is not exclusive to exploration and mining, the question as to how to handle debt in the face of the need for new capital is a major problem.
Uploaded: 2009-03-02 13:02:10
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Schematic representation of an Economic Preliminary Assessment
So you have mineral projects at a low level of confidence and limited cash for further work@f3 Not an unusual position to be in, but the JORC family of codes provide you with a problem since you must demonstrate that 'there are reasonable and realistic prospects for eventual economic extraction'.
Uploaded: 2009-02-27 10:01:39
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How to Evaluate Inferred Resource Projects for Strategic Decision-Making
So you have mineral projects at a low level of confidence and limited cash for further work@f2 Not an unusual position to be in, but the JORC family of reporting codes provide you with a problem since you must demonstrate that 'there are reasonable and realistic prospects for eventual economic extraction'.
Uploaded: 2009-02-27 08:56:15
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Spot the Difference
At Venmyn, we are seeing an increase in requests for Mineral Projects re-evaluation for impairment testing. As ever, while we are fully aware of the magnitude of the current market downturn we are encouraging our clients against a panic approach, specifically with respect to such valuations.
Uploaded: 2009-02-10 14:33:34
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IMPAIRMENTS
The crash in global markets has been caused by many factors but not least the inappropriate and/or valuation of assets. Subprime instruments were in the first assets to go through an impairment process creating massive instability in the financial and banking sectors.
Uploaded: 2009-01-29 11:30:02
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Issue of New SAMVAL Guideline - URGENT NOTE
The new guideline note means that the values determined by each valuation approach must stand on their own merits and not 'weighted' to create some combination of methods as could possibly be misinterpreted by a reading of Clause 26 in the SAMVAL Code.
Uploaded: 2009-01-22 10:29:56
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Welcome 2009 !
Let's hope 'Happy' New Year will carry more weight than usual, it certainly will prove to be an interesting first few months. It's tempting to wish them away iin the hope of better market results as we head deeper into the new year.
Uploaded: 2009-01-08 08:45:08
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Resource to Reserve Calculation for an Alluvial Diamond Deposit
Download a block inventory and graph in the form of an Excel file which you may use as a working file to calculate Resource to Reserve of an alluvial diamond deposit. For further clarification, please read the "Using Grade Tonnage (or Volume) Curves to Define Diamond Reserves and Illustrate Sensitivity of Reserves with Changing Operating Costs"
Uploaded: 2008-11-07 08:23:07
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The Difference Between the Minerals and Oil & Gas Industries
One very exciting method is the combination of surface survey and mapping of outcrop and integration of that information into 3D-image modelling, linking structural and sedimentological mapping with seismic information. The way this provides target definition strategies within a scientifically evaluated geological framework is brilliant.
Uploaded: 2008-11-04 09:52:35
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Exchange Control Policy
The occurrences of the last few weeks have clearly indicated that there are advantages to exchange controls, similarly there are advantages to have them removed. The challenge and opportunity is to work together with government in findings ways to relax exchange controls, to allow capital to flow unrestricted, while at the same time ensuring sound and secure investments both abroad and at home.
Uploaded: 2008-10-21 08:28:35
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Mining and Environmental Legislation in Africa
The first issue is that of mining and environmental legislation in Africa. South Africa has very stringent mining law. Then again, it could afford to put such laws in place because of the development that it has enjoyed through the previous regime and the influx of foreign investment that was pouring in at the dawn of democracy.
Uploaded: 2008-10-14 14:42:31
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Resources - Boom or Bust
The events in the past few months, and in particular the past two weeks, have been unprecented in the resource volatility. The losses experienced on all global financial markets have been staggering and resources have not escaped. Daily losses of 5% and more have occurred with frightening frequency. Even blue chip mining stocks such as Anglo and BHP Billiton have taken large knocks.
Uploaded: 2008-10-06 11:19:48
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SEC Announces Proposed Rule Changes for Oil and Gas
Well, it seems that the regulator can be progressive and after much lobbying by the AAPG and SPE, the SEC released a Concept Release document in December 2007 for industry comment.
Uploaded: 2008-10-01 16:24:40
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Fickle Nickel
There was a time when 'nickel' was worth very little in monetary terms but with the largely Asian driven global demand for resources, Ni has become particularly valuable. Nickel is a primary ingredient in stainless steel, catalysts, batteries and the chemical industry and this strategic role was reflected in the massive increase in the Ni price between 2005 and 2007.
Uploaded: 2008-09-17 08:31:25
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New JSE Listings Requirements
In April 2008, the JSE exposed for comment, a proposed draft Listings Requirements. Last week we received formal notification from the JSE that the consultation process has been completed and that the new requirements, which are effective from 1st September 2008, have been issued as Bulletin 3/2008 on 30th July 2008.
Uploaded: 2008-08-11 11:25:09
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The Future of Corporate Reporting
A major trend in the annual reporting industry is making stakeholder communication more than just a once-off event and rather an ongoing process. Through the use of the internet, companies can now allow users to download PDF versions of these reports encouraging an on-going relationship with investors at a touch of a button.
Uploaded: 2008-08-07 08:47:09
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Environmental Compliance
Mining, from a slightly cynical point of view, has often been viewed as "mining waste to extract a little bit of ore". Gone are the days when communities used to stand by and watch their land being exploited with very little benefit being ploughed back to those communities.
Uploaded: 2008-07-29 14:53:31
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Merger or Murder Agreements
Last week one of our clients called in and asked for assistance with a "Murder Agreement" which was Freudian slip and he actually meant Merger Agreement! To me, that is a sign of the times and we are seeing a significant reduction in the availability of early stage exploration risk capital.
Uploaded: 2008-07-01 11:06:26
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Mineral Asset Valuation
Venmyn has been warning about 'market madness' with mineral asset valuation and it was fortunate, we were able to convince the SSC to change the SAMREC/SAMVAL Codes with respect to valuing of in situ resources (SAMVAL 22; SAMREC 29).
Uploaded: 2008-06-05 14:32:38
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Goldman Sachs Group Article
"For months, we've heard one major financial institution after another complain that the real villain behind today's credit problems is mark-to-market accounting, which requires that companies record many assets at their fair value each quarter, rather than at their historical cost." Source: Business Day, 5 June 2008
Uploaded: 2008-06-05 14:23:47
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Grade tonnage curves
... there has been intense debate about what blocks should be included in the grade-tonnage curve inventories and in this respect there is further confusion over the definition of a mineral resource since the guideline states that "Mineral Resource is not an inventory of all mineralisation drilled or sampled regardless of cut-off grades".
Uploaded: 2008-06-02 09:52:50
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Sources of Errors in Mineral Resource Estimation
A mineral resource and mineral reserve statement generally contains a single set of grade and tonnage results without furhter disclosure of the potential inherent errors and risks associated with these estimates.
Uploaded: 2008-05-20 08:06:45
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Professional Registration for Geoscientists
Venmyn recently attended the South African Institute of Chartered Accountants (SAICA) GAAP Monitoring Panel (GMP) presentation in Johannesburg. The GMP is a joint initiative between SAICA and the JSE and acts as an advisory body to the JSE. The panel investigates cases presented to it and reports its findings to SAICA from where the matter is reviewed for possible disciplinary procedures.
Uploaded: 2008-04-24 08:41:51
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Investing in Zimbabwe
The perception that business in Zimbabwe is high risk, has significantly discounted most assets. The Directors of ACR believe that mineral resources in particular are a class that have been significantly undervalued. This perception creates an investment oppurtunity rarely availble in world-class mineral belts.
Uploaded: 2008-04-15 09:33:22
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Energy investing in SA
The coal sector on the JSE currently comprises Coal of Africa, previously GVM Metals Limited which includes a metals trading arm which accounts for all of Coal's earnings; Hwange, currently loss-makiing but, dependent upon the outcome of Zimbabwe's election shambles, may offer value in the medium-term; SA Coal Mining Holdings, the re-listed entity previously known as Yomhlaba Resources; and possibly Sentula which gives exposure to mining contracting with large interests in the coal business.
Uploaded: 2008-04-10 07:25:14
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IVSC Restructure Plan
We were made aware of this document on the plans for the IVSC and would be interested to your views.
Uploaded: 2008-04-03 08:09:32
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Application of the bulking factor
In canvassing our professional peers in the industrial minerals sector, including aggregates, limestone, sand and cement all Resource Managers confirmed that they use a Bulking Factor for the calculation of mineral resources prior to the application of economic modifying factors.
Uploaded: 2008-03-11 07:55:18
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Is the 'Indicated Mineral Resource' definition contradictory@f1
It seems that for an Indicated Mineral Resource, you are able to assume continuity and this would be sufficient to conduct mine design and economic studies, but those first two sentences from the Main Code Section 24 appear to be contradictory.
Uploaded: 2008-03-06 07:14:30
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International Reporting Codes - Sources of Publication
The one-stop-shop is now a reality. I have recently received from the SAIMM, a CD containing all the latest major international reporting codes as at February 2008, in pdf format.
Uploaded: 2008-02-27 11:13:48
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As long it's a mineral then it's good enough
With the global mineral resources market experiencing such unusual and exceptional circumstances, the next "Bre-X" could be just around the corner.
Uploaded: 2008-02-14 10:34:42
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Light at the end of the tunnel@f0
... Section 12 of the Electricity Act states that any consumer may institute a claim for damages against a license holder if such license holde neglected to fulfil its obligations as set out in the license.
Uploaded: 2008-02-07 07:44:11
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Website re-launch
We are very proud to present our fresh and innovative website, located at www.venmyn.com. The new website introduces new features such as the picture gallery, glossary and a blog.
Uploaded: 2008-01-28 07:46:37
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The Occurrence of Diamonds in South Africa
... a book that would serve to stimulate interest and investment in South Africa's diamond industry as well as a book that would serve as a general reference to the South African diamond industry.
Uploaded: 2008-01-17 08:34:02
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Mining Indaba
Just a quick reminder, the Mining Indaba is around the corner. If you need help compiling your fact sheets, technical statements and marketing brochures please let us know as early as possible...
Uploaded: 2007-12-19 13:15:01
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SACNASP Registration
In the latest Geobulletin, Steve Prevec discusses the registration with SACNASP by all identified Natural Scientists including lecturers as being a potential problem.
Uploaded: 2007-12-10 08:00:06
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Golden Year
Merrill Lynch raised their average Au price forecast for 2007 to USD675/oz. Spot prices of approximately USD850/oz were suggested by a few brave analysts but essentially dismissed as highly speculative at best and foolish at worst. With the end of 2007 in sight, Au is trading at USD830/oz, having hit USD841.75/oz earlier this month.
Uploaded: 2007-11-27 15:00:00
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Compliance Reporting
The current emphasis amongst the exchanges is for 'clear and concise' reporting.
Uploaded: 2007-11-20 15:44:28
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Inferred Resources
The obvious question then arises as to how a Competent Person reports a 'deposit' in a Mineral Resource Statement.
Uploaded: 2007-11-13 10:30:41
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