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Mandatory Online Submissions of Operations Reports

1.       History of Operations Reports

The Department of MinesMines, Industry Regulation and PetroleumSafety (DMP)(DMIRS) is making significant progress towards achieving its goal of being completely online by July 2016. Currently companies may submit either a paper Form5 or an online Operations Report (e-Form5). Online submission of single e-Form5s has been available for quite some time. As per an email from the DMPDMIRS dated 10th June 2015:

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The DMPDMIRS is now encouraging customers to submit e-Form5s online. This will eventually become mandatory and paper Form5s will be phased out completely. The DMPDMIRS is hoping enforce this as soon as possible.

LandTrack Systems has been working in conjunction with the DMPDMIRS to assist the industry with the transition from submitting paper Form5s to online e-Form5s. This White Paper has been written to help companies understand the processes involved in updating internal procedures for allocating expenditure within the company’s accounting systems, which is ultimately be used for reporting and submitting e-Form5s.

2.       Benefits to Industry, DMP and Users

Currently, around 50% of all Form5s are lodged online, and the remaining 50% are lodged as paper Form5s. The Association of Mining and Exploration Companies (AMEC) contacted the DMP after consultation with AMEC’s members, and requested that the DMPDMIRS publish statistics regarding the breakdown of Exploration and Mining expenditure. The statistics will be a good indicator as to where the industry may be headed because of the work that has been completed on all WA’s tenements. This is why the DMPDMIRS will be making the online submission of e-Form5s mandatory as soon as possible so that the raw data generated can be analysed and published.

3.       Overview of e-Form5 Workflow

Form5s are usually generated by a Land or Tenement Manager/Consultant. All the necessary data to submit the annual Form5 needs to be gathered and filtered so that appropriate expenditure is lodged for the tenement’s reporting period. This expenditure needs to be broken down by the Form5 activities that are suggested in the supporting documentation that accompanies the paper Form5. This is quite an arduous process. Usually a company’s Chart of Accounts will be set up to match the paper Form5 activities so that individual transactions for work completed on each tenement can be coded against the tenement under the appropriate Form5 activity.

The DMPDMIRS recently introduced a new feature to Mineral Titles Online (MTO) where by a user can bulk upload multiple e-Form5s (max of 50) at one time. This feature will dramatically enhance the process of submitting multiple e-Form5s and reduce data entry errors as there will be no need to manually re-enter the e-Form5 details online. Single e-Form5s may also be uploaded in this fashion. Many land managers are faced with the prospect of submitting multiple e-Form5s on the same day. We know of one land manager, for a major gold producer, who was recently required to submit 220 e-Form5s on the same day.

To transition from using a paper Form5 to an e-Form5 you must understand the workflow associated with gathering the appropriate expenditure to allocate to your tenements. The workflow is as follows:

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4.       History of the Mineral Exploration Activities

These are as follows:

A.       Mineral Exploration Activities

    1. Geological
    2. Geochemical
    3. Geophysical
    4. Airborne geophysical
    5. Remote Sensing
    6. Mineralogical
    7. Surveying
    8. Core Drilling
    9. Non-core Drilling       
    10. Costeaning
    11. Field Supplies
    12. Drafting
    13. Travel
    14. Field Camp
    15. Environmental
    16. Feasibility Study
    17. Rehabilitation

B.       Mining Activities (Development and Production)

C.       Aboriginal Heritage Surveys

D.       Annual Tenement Rent and Rates

E.       Administration and Overheads

F.       Land Access/Native Title

To be able to produce a Form5 for the tenement’s reporting period the expenditure needs to be grouped by activity. Most mining companies have set up their Chart of Accounts to allow transactions to be coded appropriately. However it is the responsibility of the person preparing the Form5 to make sure that the expenditure is categorised accordingly.

5.       Implementing new activities – implications for accounts and broader systems

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The e-Form5 Mineral Exploration Activities have been greatly simplified from 17 to just 6. This means that the level to which expenditure needs to be reported has been reduced. The new Mineral Exploration & Mining Activities are:

A.       Mineral Exploration Activities

    1. Drilling
    2. Environmental
    3. Geochemistry
    4. Geology
    5. Geophysics
    6. Drafting
    7. Field camp activities
    8. Field supplies
    9. Travel
    10. Other

B.       Mining Activities

    1. Care and Maintenance
    2. Development
    3. Environmental
    4. Production

1. Drilling

1.       Aircore drilling7.       Other
2.       Auger drilling8.       Percussion drilling
3.       Core sampling9.       Reverse circulation drilling
4.       Diamond drilling10.       Rotary drilling
5.       Drilling11.       Vacuum drilling
6.       Large diameter drilling 
2. Environmental

1.       Environmental auditing5.       Floral studies
2.       Environmental impact surveys6.       Other
3.       Environmental management7.       Rehabilitation
4.       Fauna studies 
3. Geochemistry

1.       Assays9.       Microdiamond analysis
2.       Bulk sampling10.       Other
3.       Core sampling11.       Rock chip sampling
4.       Deflation lag sampling12.       Sampling
5.       Drill assays13.       Soil sampling
6.       Electron microprobes\ 14.       Stream sediment sampling
7.       Ground water sampling15.       Water sampling
8.       Infrared spectroscopy16.       Whole rock assays
4 Geology

1.       Computer applications13.       Metallurgy
2.       Computer modelling14.       Literature review
3.       Costeaning15.       Mineral resource estimate
4.       Data bases16.       Mineralogy
5.       Exploration target generation17.       Other
6.       Feasibility studies18.       Palaeontology
7.       Geochronology19.       Petrography
8.       Geological interpretation20.       Photogeology
9.       Geological mapping21.       Prospecting
10.       Geological reconnaissance22.       Relogging
11.       GIS23.       Review of exploration results
12.       Hydrogeology24.       Structural geology
5, Geophysics

1.       Aerial EM surveys14.       Ground radar surveys
2.       Aerial magnetic surveys15.       Ground radioactivity surveys
3.       Aerial multispectral scanning16.       IP surveys
4.       Aerial photography17.       Landsat
5.       Aerial radioactivity surveys18.       Other
6.       Audiomagnetotelluric surveys19.       Photogrammetry
7.       Digital elevation modelling20.       Radioactivity surveys
8.       Electrical surveys21.       Resistivity surveys
9.       Geophysical interpretation22.       Satellite imagery
10.       Geophysical logging23.       Seismic interpretation
11.       Gravity surveys24.       Seismic surveys
12.       Ground EM surveys25.       SP surveys
13.       Ground magnetic surveys26.       Surveying
6.       Drafting 7.       Field camp activities 8.       Field supplies 9.       Travel 10.       Other - Activity Description - this activity can be used to describe any activity that doesn’t fit into the other listed activities

To be able to define which of these activities make up the expenditure there needs to be a direct mapping between the existing account codes defined in the Chart of Accounts to the new online eForm5 activities so that whoever is preparing the e-Form5 is able to allocate the expenditure appropriately. This may involve a change in the way in which companies are allocating expenditure to their account codes.

6.       Conclusion

Due to the fact that there does not appear to be a direct mapping from the paper Form5 to the e-Form5 Mineral Exploration Activities and having discussed this issue with many of our clients, we are finding that most expenditure is being submitted under the ‘Other’ Mineral Exploration Activity. If this activity is selected you are able to define your own Activity Description by entering the description for the traditional paper Form5 activity.

Re-mapping a company’s Chart of Accounts to match the new e-Form5 Mineral Exploration Activities would be very costly and time consuming and indeed almost impossible for some companies.

LandTrack Systems contacted its client base and gathered a list of suggested activity types to add to the e-Form5. We suggested to the DMPDMIRS that if these missing activity types were added to the online activities this would reduce the impact on companies Chart of Accounts. This would also help with the issue of expenditure being coded against the ‘Other’ activity and enable the DMPDMIRS to gather useful expenditure information.

On the 3rd August 2015 the DMPdepartment released version 5.13 of MTO which included 4 additional Operations Report activity types:

1.       Drafting

2.       Field Supplies

3.       Field Camp Activities

4.       Travel

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If you are at all concerned about the transitioning from a paper Form5s to Online e-Form5s please do not hesitate to contact us at LandTrack Systems. We will be running an e-Form5 Workshop early December 2015.

Rachel Burnett, Client Relations Manager,