The Johannesburg Stock Exchange (JSE) has announced the fifth phase of the JSE Simplification Project which aims to simplify the JSE Listings Requirements (Requirements). This phase entails proposed amendments to Section 12 (Mineral Companies). The key changes are listed below.

Definitions

The definitions of ‘material’ and ‘minerals’ are to be removed. ‘Material’ is already defined in the Requirements and the definition of ‘minerals’ does not add value as it cannot be confused with oil/gas activities.

It is proposed that the definition of ‘substantial mineral and oil/gas assets’  should refer to mining, exploration or oil/gas assets representing 30% (changed from the currently applicable 25% to align it with the JSE definition of what is considered to be ‘substantial’) of the total assets or revenue or profits of an applicant issuer, where its main activities are something else.

Minerals and Oil/Gas provisions

Since Minerals and Oil/Gas provisions overlap, they are to be consolidated.

Experience and expertise of personnel

Paragraph 12.4 setting out the necessary experience and expertise levels required of the applicant’s directors and senior management will be removed as it has been identified as a duplication.

Reporting and disclosure

In relation to a competent person’s report (CPR) and a Form A Report (Oil & Gas), the JSE is proposing removing the functions performed by the Readers Panel, as the quality of CPRs and Form A Reports has significantly improved over time and the Readers Panel no longer serves a regulatory purpose that justifies the cost and time it entails. Additionally, it is proposed that the JSE and Reader’s Panel will no longer approve an executive summary. However, as safeguards, it is proposed that:

• a competent person (CP), competent valuator (CV) or qualified reserve evaluator (QRE) must be independent (similar to sponsors); and (b) a statement on such independence must be made by the board in the pre-listing statement and/ or the category 1 circular;
• annual report disclosure compliance for mineral issuers should continue and a new provision should be inserted requiring disclosure of specific governance arrangements and internal controls; and
• material complaints concerning a CP or CV in respect of CPR can still be referred to the SAMCODES Standards Committee.

The JSE proposes removing the following requirements set out in paragraph 12.9(b)(i)(2) and 12.9(c) in relation to the content of pre-listing statements and circulars:

• details of interests held by directors, CVs, etc ‘which has been acquired or disposed of by, or leased to or by, the applicant issuer, including any interest in the consideration passing to or from the applicant issuer’, as its application is complex and unclear; and
• a duplicated historical financial information requirement, as this is already covered by other requirements in relation to pre-listing statements and category 1 transactions.

All disclosures (albeit minimal disclosures) in relation to immaterial mineral assets are proposed to be removed from the Annual Report. The focus of disclosure should be aimed only at an issuer’s material mineral assets.

It is proposed that not only ‘feasibility studies’ but the broader scope of ‘technical studies’ should be disclosed in relation to exploration.

The JSE invites comments by Monday, 27 May 2024.