kdr's use of metal equivalents

The use of KDR using metal equivalents has been brought up by myself in discussion on KDR's use in a recent ASX release

The 2012 JORC Explosure Draft was released for comment on the 18th Sept - see below the link (page 70) to that Draft and below.

In KDR'S formula for a metal equivalent I cannot see any recovery factor used. The word "misleading" has been used in the Draft, and I have said similar in HC posts. The metalurgical recoveries need to be part of the equation.

Once the 2012 JORC code is finalised I suspect that KDR'S use of metal equivalents will need to be changed.



http://www.jorc.org/pdf/2012_jorc_update_exposure_draft.pdf

Reporting of Metal Equivalents
49. The reporting of Exploration Results, Mineral Resources or Ore Reserves for polymetallic deposits in terms of metal equivalents (a single equivalent grade of one major metal) may be misleading unless additional details such as estimates of metal recoverability are also provided.

Metal Equivalents must only be quoted under the following guidelines to ensure that material transparent information is reported.
The assumptions used for any reporting of metal equivalent values must be clearly stated. The reporting of metal equivalents must also adhere to the principles of Transparency, Materiality and Competence, as set out in Clause 4.
The following minimum information must accompany any report that includes reference to metal equivalents, in order to conform with these principles:
•
individual grades for all metals included in the metal equivalent calculation;
•
assumed commodity prices for all metals. (Companies should disclose the actual assumed prices. It is not sufficient to refer to a spot price without disclosing the price used in calculating the metal equivalent);
•
assumed metallurgical recoveries for all metals and discussion of the basis on which the assumed recoveries are derived (metallurgical test work, detailed mineralogy, similar deposits, etc.);
•
a clear statement that it is the company's opinion that all the elements included in the metal equivalents calculation have a reasonable potential to be recovered; and,