Sarbannes-Oxley Act of 2002

The United States has had several cases where investors in public companies have been negatively affected by unethical business practices over the past decade. As a result of this, the Sarbanes-Oxley Act of 2002 (SO) was enacted to protect investors by improving the accuracy of corporate disclosures made pursuant to the securities laws, and for other purposes. In this respect, South African companies listed on stock exchanges in the United States of America have to comply with the SO Act.

Venmyn independently reviews company’s protocols and procedures for the reporting of mineral resources and ore reserves for the purpose of ensuring compliance with the requirements of the SO Act of 2002.
Although, the SO Act 2002 does not identify specific requirements to meet compliance with respect to the identification and reporting of mineral resources and ore reserves, in SECTION 103 : AUDITING, QUALITY CONTROL, AND INDEPENDENCE STANDARDS AND RULES, it states that “The Board shall, by rule, establish, including, to the extent it determines appropriate, through adoption of standards proposed by 1 or more …. advisory groups … and amend or otherwise modify or alter, such auditing and related attestation standards, such quality control standards, and such ethics standards to be used …, as may be necessary or appropriate in the public interest or for the protection of investors.”

The section goes on to state that “an evaluation of whether such internal control structure and procedures include maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer”, the asset, in this case of the Resource Industry, being mineral assets as recorded in mineral resource and ore reserve statements. The section further notes that “a description, at a minimum, of material weakness in such internal controls, and of any material non-compliance found on the basis of such testing” is required.

The SO Act states in SECTION 404: MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS that “establishing and maintaining an adequate internal control structure and procedures” is required.
Taking cognisance of the principles of the SO Act and general compliance for mineral companies for global reporting compliance, we base our reviews on the requirements of the SAMREC Code. Over and above this, we also review the procedures in terms of the other global compliance codes, and note additional requirements onto the procedure layout.

For further assistance, please contact Neil McKenna +27 11 783 9903 or info@venmyn.com.