7.3 Philippine Mineral Reporting Code (PMRC 2020) & Resource Classification

Public confidence in mineral exploration results, Mineral Resources, and Mineral Reserves is critical for capital markets, mining companies, investors, and regulatory authorities. In the Philippines, PMRC 2020 supplies the professional framework for reporting Exploration Results, Mineral Resources, and Mineral Reserves. The reporting company must also apply the PSE, SEC, DENR, MGB, and other filing rules that govern the particular report at its reporting date.

PMRC 2020 Framework & International Alignment

The PMRC was originally established in 2007 and comprehensively updated to PMRC 2020 to align with the International Reporting Template of the Committee for Mineral Reserves International Reporting Standards (CRIRSCO). The PMRC framework is maintained by the PMRC Committee (PMRCC), composed of key professional organizations:

• Philippine Society of Mining Engineers (PSEM)
• Geological Society of the Philippines (GSP)
• Society of Metallurgical Engineers of the Philippines (SMEP)

Fundamental Governing Principles

PMRC 2020 is built upon three foundational principles:

1. Transparency: Clear, unambiguous presentation of information without misleading statements or omissions.
2. Materiality: Disclosure of all relevant information that investors and professional advisers would reasonably require to make an informed financial decision.
3. Competence: Public reports must rest on work for which appropriately qualified and experienced professionals accept responsibility. PMRC 2020 calls that professional an Accredited Competent Person (ACP).

Classification Framework: Mineral Resources vs. Mineral Reserves

PMRC 2020 maintains a strict boundary between Mineral Resources (geological confidence) and Mineral Reserves (technical and economic viability).

               EXPLORATION RESULTS
                        |
                        v
                MINERAL RESOURCES
        Increasing      +-------------------+
        Geological      |     Inferred      |
        Confidence      +-------------------+
            |           |     Indicated     |--------+
            |           +-------------------+        |  Consideration of
            v           |     Measured      |-----+  |  Modifying Factors
                        +-------------------+     |  |  (Mining, Processing,
                                                  v  v   Economic, Legal, etc.)
                                          ORE RESERVES
                                        +-------------------+
                                        |     Probable      |
                                        +-------------------+
                                        |      Proved       |
                                        +-------------------+

1. Mineral Resources

A Mineral Resource is a concentration or occurrence of solid material of economic interest in or on the Earth's crust in such form, grade (or quality), and quantity that there are Reasonable Prospects for Eventual Economic Extraction (RPEEE). Mineral Resources are subdivided into three categories in order of increasing geological confidence:

• Inferred Mineral Resource: Tonnage, grade, and mineral content are estimated with a low level of confidence, based on geological evidence and limited sampling. Inferred resources cannot be directly converted to Mineral Reserves.
• Indicated Mineral Resource: Tonnage, densities, shape, physical characteristics, grade, and mineral content are estimated with a reasonable level of confidence, supported by adequately spaced exploration sampling. An Indicated resource can be converted to a Probable Mineral Reserve.
• Measured Mineral Resource: Tonnage, grade, shape, and mineral distribution are estimated with a high level of confidence based on detailed and reliable exploration data. A Measured resource can be converted to a Proved Mineral Reserve or a Probable Mineral Reserve (if modifying factor uncertainties exist).

2. Mineral Reserves (Mineral Reserves)

An Mineral Reserve is the economically mineable part of a Measured and/or Indicated Mineral Resource. It includes diluting materials and allowances for losses that occur when the material is mined.

• Probable Mineral Reserve: Economically mineable part of an Indicated (and in some cases Measured) Mineral Resource, demonstrated by at least a Pre-Feasibility Study.
• Proved Mineral Reserve: Economically mineable part of a Measured Mineral Resource, demonstrated by a Pre-Feasibility or Feasibility Study. Proved reserves represent the highest level of confidence in economic extraction.

Accredited Competent Person (ACP) Requirements in the Philippines

The company issuing a public report is responsible for the report. Its disclosure must be based on, and fairly reflect, supporting information and documentation prepared by an Accredited Competent Person (ACP); the company obtains the ACP's prior written consent to the form and context in which the work is presented. A required Technical Report is prepared directly by the appropriate ACP or under that ACP's direct supervision.

ACP Qualification Criteria

An ACP is a Member or Fellow of PSEM, GSP, or SMEP, or of a recognized professional organization accepted under the framework, and is subject to an enforceable professional disciplinary process. The person needs at least five years of relevant experience in the style of mineralization or deposit and in the activity undertaken. Resource estimation, reserve estimation, exploration reporting, and metallurgical assessment require different relevant experience; a general five years in mining is not enough by itself. Applicable Philippine licensure law still governs regulated professional practice.

Modifying Factors & Economic Cut-off Grade

The transformation of Mineral Resources into Mineral Reserves requires the application of Modifying Factors:

$\text{Mineral Resource (Indicated/Measured)} + \text{Modifying Factors} \longrightarrow \text{Mineral Reserve (Probable/Proved)}$

Key Modifying Factors include:

• Mining: Extraction method, mining dilution, mining recovery, geotechnical stability, bench geometry.
• Processing / Metallurgical: Ore beneficiation recovery rates, reagent consumption, deleterious elements.
• Economic: Commodity price assumptions, exchange rates, capital expenditure (CapEx), operating expenditure (OpEx).
• Marketing: Offtake agreements, product specification limits, freight and smelting charges (TC/RCs).
• Legal, Environmental, Social & Governmental: Compliance with Republic Act 7942 (Philippine Mining Act of 1995), Environmental Compliance Certificate (ECC), Environmental Protection and Enhancement Program (EPEP), Social Development and Management Program (SDMP), and National Commission on Indigenous Peoples (NCIP) Free, Prior and Informed Consent (FPIC).

Public Reports and Technical Reports

Do not treat every public disclosure as though the ACP personally issues the company report. The issuer owns the public report, names the ACP whose work supports it, discloses the ACP relationship and consent, and retains evidence that the disclosure fairly reflects the supporting documentation. Where Exchange rules require a Technical Report, the relevant ACP authors or directly supervises it, completes the required verification and inspection, states assumptions and data cut-off, and addresses the applicable reporting criteria on an if-not-why-not basis. Filing triggers, forms, timing, and annual or material-update duties must be checked against the Exchange rules effective on the reporting date.