Why no regime is directly convertible

The premise that mineral resource and reserve classification is universally interchangeable between jurisdictions constitutes a recurring misconception in asset analysis. Although the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) provides a common framework of definitions, the transposition of data from one national code to another does not constitute a literal translation exercise. The technical acceptance of a report depends on demonstrating that the applied methodology complies with the premises of competence, transparency, and materiality required by the destination market, with conversion, therefore, being an interpretive process rather than an automatic equivalence.

What CRIRSCO-family codes actually share#

The convergence of codes belonging to the CRIRSCO family is based on the standardization of basic definitions and the central role of the Competent Person. The core of this shared structure establishes a hierarchy of geological confidence and technical viability that divides the mineral inventory into categories of Resources (Inferred, Indicated, and Measured) and Reserves (Probable and Proved). This terminological alignment allows for minimal global technical communication, facilitating the initial interpretation of geological data by professionals from different jurisdictional backgrounds.

However, this convergence does not imply that the "modifying" criteria — those that transform resources into reserves — are identical across all signatory codes. While the supporting geological definitions are structurally similar, local requirements for demonstrating economic, environmental, social, and legal viability vary significantly. The confidence placed in the system does not reside solely in the definitions, but in the fact that the professional responsible, when signing a report under any CRIRSCO code, assumes legal and ethical responsibility for strict compliance with the norms of their own professional registration body.

Therefore, the sharing of standards is, in practice, an agreement on the form of disclosure and the qualification of the issuer, not a homologation of the modeling technique itself. The similarity facilitates the comparison between projects from different regions, but it does not exempt the analyst from verifying whether the set of premises used in the cut-off grade calculation or in the risk analysis is in compliance with the specific requirements of the stock exchange or regulatory authority that will receive the information.

Where equivalence stops in practice: form, authority, and process, not just category#

Equivalence between codes ceases the moment audit requirements and the signatory's authority are confronted. Each national system has distinct protocols regarding the necessary supporting documentation, the depth of scrutiny over modifying factors, and public disclosure obligations. A category classified as "Proved" under a local code may not satisfy the criteria of rigor or the supporting documentation required by another jurisdiction, even if the raw geological data is identical.

The issue of authority also imposes itself as a procedural barrier. A professional may be considered a "Competent Person" in their country of origin, based on criteria of experience and membership in specific institutes, but their technical validity for listing purposes may be questioned in another market that requires local professional registration or a specific list of recognized associations. This creates a gap between what is technically accepted on a local scale and what is reportable at the international capital level.

Furthermore, the form of data presentation varies according to stock exchange requirements. Some markets require complete and audited technical reports with rigorous periodicity, while others accept less frequent statements of compliance. The operational risk of treating conversion as a given is non-compliance with the destination market's disclosure standards, which can result in regulatory questioning regarding the veracity or completeness of the technical information provided to the investor market.

How a market accepts "foreign" estimates: the example of the ASX (LR 5.12)#

The Australian market, through rule LR 5.12, offers a clear example of how to treat estimates produced under distinct regimes. Instead of accepting automatic conversion, the rule establishes that, when publishing foreign estimates, the holder must present a detailed comparison between the categories used by the foreign code and the equivalent categories of the national code (the JORC). The process requires the company to highlight the fundamental differences between the standards and justify why the estimate, although foreign, has relevance for local investors.

For a foreign estimate to be accepted, the transcription of values is not enough; the report must provide additional evidence, including the date of the original estimate, the name of the entity that produced the data, and, crucially, a validation performed by a Competent Person that confirms the original report's compliance with the required standards. If the foreign estimate does not meet these transparency requirements, the issuer is obliged to treat the information as an exploration statement and not as a confirmed mineral resource or reserve, preventing the data from being used for asset pricing purposes as if it were a proven reserve.

Consider the scenario in which a holder possesses a technical report from a jurisdiction with less rigorous disclosure rules. If that holder simply transposes the "Proved Reserves" numbers into a prospectus in a market that requires rule LR 5.12 without observing the conversion and validation procedures, the receiving market will lack the necessary comparison elements to evaluate the technical risk. Consequently, the regulator may demand the immediate reclassification of the asset to "resource" or the conduct of a new technical study, which generates a loss of market value and discredits the project before institutional investors who rely on compliance audits.

The Brazilian case: what the CVM requires, and what it does not regulate#

In Brazil, the regulatory framework of the Comissão de Valores Mobiliários (CVM), specifically in ANM Resolution 80/2022, defines issuer disclosure obligations through the Reference Form. However, there is no specific technical CVM norm that regulates the methodology for calculating mineral resources and reserves. The Brazilian market, therefore, operates under a normative gap regarding the technical mining standard, which imposes on the market a regime of self-regulation or voluntary adoption of international standards, such as CRIRSCO, to ensure credibility with foreign investors.

This absence of specific sectoral regulation by the CVM transfers the responsibility for technical definition to those responsible for the form and the companies' governance. In practical terms, this means that, in Brazil, the disclosure of mineral assets is subject to the general rule of transparency and veracity of information provided to the market. When an issuer decides to adopt an international classification in its documents, it does so voluntarily; however, by doing so, it becomes responsible for the robustness of the method before the market authority.

The lack of a national standard homologated by the CVM implies that code conversion for Brazilian companies depends entirely on market practice. There is no official "translation table" sanctioned by the securities regulator; compliance is measured by the impact of the information on the investment decision. The investor who analyzes a Brazilian issuer must, therefore, verify the origin of the adopted standard and whether the company has a technical audit capable of supporting the presented classification, given that the CVM does not act as an arbiter of the geological validity of the calculations.

The right question to ask when facing any code conversion#

The technical management of mining rights requires that analysis shift from the search for equivalence to the search for procedural transparency. Upon encountering a resource or reserve reported under a different code, the examiner must question not the final category presented, but the pillars that support the transition between the raw inventory and the viable economic asset. Verification must focus on documentary rigor and the estimate's history, treating conversion as an independent audit exercise and never as an administrative task of reclassification.

To ensure the integrity of the analysis in transaction or listing processes, it is recommended to apply the following technical guidelines:

1. Validate the competence of the original report's author according to the destination code's norms.
2. Compare the cut-off grade premises used in the original calculation with the current operational requirements of the destination market.
3. Identify which modifying factors were applied and whether they reflect the infrastructure, environmental, and social risks of the region in question.
4. Audit the date of the original estimate to verify whether the modeling considers recent variations in market price and extraction costs.
5. Require reconciliation of raw geological data when the cut-off criteria of the codes are not directly superimposable.
6. Evaluate whether the supporting technical report contains the formal statement of compliance required by the code one intends to adopt.
7. Document, in case of discrepancies, the technical reasons that led to the maintenance or reclassification of the mineral category.

The transition between reserve regimes requires, therefore, the deconstruction of the estimate down to its original technical bases so that the new classification is attested under the destination market's standards. As the regulatory authority in many jurisdictions is limited to monitoring the transparency of disclosure and not the geological calculation itself, the risk of a poor conversion lies in the fragility of the supporting data and not in a failure of terminological "translation". The value and viability of a mining right remain anchored in the robustness of the field data and the capacity to demonstrate, through any code, that the applied economic premises are feasible and auditable.

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