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NAEN Code and DENR (NAEN/OERN) is the link between the Russian system of state stock records (including state expertise and state balance of reserves) and international practices public reporting for investors and financial markets (family of standards CRIRSCO, including JORC and requirements of individual jurisdictions).
If the goal is financing, transaction, listing or external investor involvement, The international approach focuses on the responsibility of the signatory (competent person), transparency of assumptions, economic feasibility and comparability of disclosure. The international approach focuses on the responsibility of the signatory (competent person), transparency of assumptions, economic feasibility and comparability of disclosure. This article outlines the logic of the two systems and gives practical recommendations on how to organize work without unnecessary risks and costs.
Two circuits: public accounting and public reporting
One of the main reasons for failure in investor negotiations is the misconception that the state examination of reserves и CRIRSCO/JORC public reporting solve the same problem. In practice, they are different systems: they differ in purpose, responsibility and evidentiary criteria. NAEN and OSRN Code refers specifically to the public (market) circuit.
| Parameter | State Accounting / State Expertise of Stocks | Public reporting (CRIRSCO/JORC and similar) |
|---|---|---|
| Purpose | State accounting, regulation of subsoil use, confirmation of results for management decisions and subsequent procedures | Comparable disclosure for capital markets: investors, banks, appraisers, transactions, listings |
| The key «check.» | Completeness and reproducibility of materials according to requirements; logical and methodological coherence | Responsible public disclosure: clear assumptions, data traceability, economic justification, modifying factors (modifying factors) |
| Responsibility | Organizational and professional responsibility of process participants (including signatories of materials) in the regulatory circuit | Personal Responsibility competent person (Competent/Qualified Person), including professional discipline and reputational risks |
| Stocks/resources logic« | Emphasis on accounting and classification by complexity, study and accepted methodologies | Resources - potentially recoverable raw materials; reserves - part of resources, technically, economically and legally justifiable for extraction |
| Output product | Report/materials for review and expert opinion | Public Report (Technical Report / Competent Person's Report) for market disclosure |
An effective strategy involves dual-loop architecture: a single database and model (single source of truth) with two harmonized output packages - regulatory and public - prepared for the relevant requirements. regulatory and public - prepared for the respective requirements.
CRIRSCO family of standards: JORC and analogs
CRIRSCO - international «template» (template), on the basis of which national codes of public reporting are developed. The main principle is comparability of disclosure for the capital market, so national standards are harmonized with common criteria.
Examples of CRIRSCO family codes (depending on the market/exchange):
- JORC Code - Australasia (often used for ASX);
- PERC Reporting Standard - European circuit (in connection with the requirements of European sites/investors);
- CIM Definition Standards - Canada (in conjunction with the NI 43-101 regime);
- SAMREC - South Africa and regional practices;
- other recognized codes in the CRIRSCO «family».
Official sources for reference (external links are nofollow):
- CRIRSCO (official website)
- CRIRSCO Terms of Reference (ToR)
- JORC Code (official resource)
- PERC Reporting Standard (official resource)
NI 43-101: features of the disclosure mode
NI 43-101 (National Instrument 43-101) is not a supplemental code, but a regulatory disclosure mode for mineral projects in the Canadian capital market. It defines the requirements for the form and content of disclosure, the role of the Qualified Person, The types of technical reports and situations where a report is required.
Key takeaway: when targeting Canada (listing, capital raising, investor requirements), you need to plan not only for geologic but also for regulatory the disclosure component (including working with advisors, ensuring independence, controlling the wording and minimizing the risks of inaccurate disclosure).
Official sources (for collation; external links are nofollow):
Competent person: responsibilities and qualifications
In the model of international public reporting, the key figure is the competent person (Competent Person, CP / Qualified Person, QP). This is not a staff position, but personal professional responsibility for correctness of conclusions, assumptions and absence of misleading disclosure.
The competent person standard includes:
- relevant experience by type of deposit and type of minerals (not general geological experience, but specialized by object);
- membership/status in a recognized professional organization (with disciplinary jurisdiction and accountability mechanisms);
- independence of judgment and managing conflicts of interest (especially in transactions and public offerings);
- provable methodology: from QA/QC data to cut-off rationale, domains, interpolation and «modifying factors».
Mini checklist for selecting a competent person (for owner/director):
- Is there any confirmed experience specifically with your field type?
- Is there a professional organization (membership) recognized by the market with disciplinary mechanisms?
- How is independence and disclosure of conflicts of interest ensured?
- How is the traceability organized: «primary → base → model → resources → stock → economy»?
The Role of the NAEN Code and the OERN Code: comparing systems without substituting concepts
NAEN and OSRN Code is integrated into the international CRIRSCO system as a national standard for responsible public reporting: it defines the requirements for disclosure of exploration results, resources and reserves to ensure their comparability and verifiability in the market.
It is important to avoid the illusion that having a state expertise does not mean automatic readiness for market requirements. Between the regulatory package and the public report there is usually a typical gap - and it needs to be closed in a controlled manner, not at the last minute.
What typically needs to be added/reconfigured when moving from the regulatory loop to the public loop:
| Block | Often found in materials for state expertise | What is required for public reporting (CRIRSCO/NAEN and OERN Code) |
|---|---|---|
| Data QA/QC | Description of works and laboratories, tables of results | Explicit quality control system: standards/blanks/duplicates, contamination control, batch traceability, outlier statistics, data suitability conclusions |
| Geologic model | The model and calculations are presented as a result | Transparent logic of domains, interpolation, assumptions and sensitivities; reproducibility of key steps |
| Resources/stocks | Calculation of stocks in regulatory logic | Separation of resources and reserves by international definitions; rationale for classification, cut-offs and assumptions |
| Economics and «modifying factors» | May be partially or in a different focus | Direct link to economic viability and recovery conditions: mining, metallurgical, infrastructure, legal, environmental and social factors |
| Responsibility of the signatory | Signatures and authorizations as a formal block | Personal responsibility of the competent person for the findings and disclosure, including a statement of competence and conflict of interest |
To understand the structure of the CRIRSCO model (NRO/RPO) and the principle of «one country - one national organization» it is useful to read CRIRSCO documents (external links - nofollow):
Practical scenarios: investor, bank, transaction, listing
Below are four scenarios in which an international approach is critical. The differences are determined by the risks stakeholders seek to minimize and the format of evidence they require.
| Scenario | What is usually required | What to do in practice |
|---|---|---|
| Investor (equity / private) | Comparable resource/reserve estimates + transparent assumptions | Gap analysis of materials ↔ public reporting requirements; connecting competent person upfront; lining up QA/QC and «data room» |
| Bank / project finance | Inventories as a basis for cash flows, stress tests, confirmation of «modifying factors» | Focus on reserves, mining feasibility, infrastructure, cost and risk; agree the report format with the lender |
| M&A / transaction | Independent judgment + verifiability of input data | Normalize data and versions, ensure traceability, prepare independent CP/QP report, remove internal inconsistencies |
| Listing / public offering | Compliance with the rules of the particular jurisdiction (e.g. JORC/NI 43-101, etc.) | Choice of disclosure mode «under exchange» + legal outline; work calendar; control of wording and responsibility of signatories |
Universal action plan (applicable in most cases):
- Capture the purpose of the disclosure: investor/bank/listing/transaction. This determines the standard and depth of evidence.
- Do a gap analysis between available materials (including those for state expertise) and public reporting requirements.
- Assign the owner of the data and implement «single source of truth»: single identifiers for samples/wells/wells, model versions, file registry.
- Connect a competent person in the QA/QC and model phase, not in the finalization phase.
- Assemble the «data room» for independent verification without internal infrastructure (offloads, check reconciliations, assumption descriptions).
FAQ
1) Does the NAEN and OERN Code replace the state stockpile review?
No. They are different systems. NAEN and OERN code refers to public reporting and capital markets; state examination refers to public accounting and regulatory procedures. If a project requires both outputs, they should be scheduled as two coordinated outputs from the same database.
2) Is it possible to «convert» inventories in government accounting to JORC/CRIRSCO by a simple conversion or a matching table?
As a rule, no. The problem is not the arithmetic, but the difference in definitions and criteria: in the international model, reserves require techno-economic and legal feasibility of extraction (modifying factors), and the classification of resources/reserves is structured differently.
3) What is more important to the investor: the amount of resources or the quality of the data?
Data quality and transparency of assumptions. Significant volumes without a provable QA/QC chain and clear model logic are perceived as risk rather than value.
4) Who should sign the public report?
A competent (qualified) person with relevant experience and recognized professional status. A formal ex officio signatory without competence and disciplinary responsibility will not convince the market.
5) Is it compulsory to do a JORC report if we want funding?
Not always. The standard/mode is selected for the target jurisdiction and investor/exchange requirements (JORC, PERC, NI 43-101, etc.). Start by analyzing «where and from whom capital is raised», not the choice of format.
6) Where do we start if we already have materials for state review?
Starting with gap analysis and preparation of a managed database: source data registry, model versions, QA/QC, structure of uploads for independent verification. Then - involvement of a competent person and assembly of a public report.