Laboratory Accreditation: proving that what glitters is gold

2010-06-08

The Bre-X gold scandal that rocked the Toronto Stock Exchange (TSX) in the late 1990s forever changed the Canadian mining sector. When millions in pension dollars were lost due to fraudulent and falsified test data, investors around the world were outraged.

It remains one of the most tumultuous cases of criminal fraud in Canadian history, and serves as a cautionary tale for Canada’s investment community. As a result of the Bre-X investigation, the requirements for companies listed on the TSX were revised, making the disclosure obligations for mineral laboratories that test gold and other mineral samples much more stringent. In 2001, the National Instrument 43-101 (NI 43-101), which sets reporting standards for the disclosure of mineral projects, became law across Canada; it specifies that the credentials of laboratories be included as part of analytical results.

In the wake of the scandal, the ability to demonstrate the credibility and accuracy of test results become more than a key benefit for mineral laboratories: third-party accreditation by the Standards Council of Canada (SCC) is now crucial to doing business.

Greg Kajmowicz, the Quality Manager for Accurassay Laboratories remembers all too well the challenges that mineral laboratories faced just after the fall of Bre-X. “A lot of companies weren’t going to use non-accredited labs,” he says.

Accredited since 2002, Accurassay Laboratories has experienced firsthand the benefits of being SCC-accredited. According to Kajmowicz, today’s mineral sector singles out laboratories that aren’t accredited and it can hurt their progress in the long-run. “They are missing out on business. It really limits the amount of new clients they can take on.” Kajmowicz considers SCC accreditation to be a competitive advantage.

Eric Hoffman, president of Activation Laboratories Ltd., echoes those sentiments.
“After talking to some clients, unless we’re accredited they won’t use us. So if you don’t have the accreditation you aren’t going to get their business,” explains Hoffman.

With over thirty years experience in the accreditation of testing and calibration laboratories, the SCC has a well established reputation both at home and abroad.

“A lot of our customers were requesting that we show some sort of ISO accreditation,” says Hoffman.

The SCC’s Program for the Accreditation of Laboratories/Canada (PALCAN) is based on ISO/IEC 17025, the international standard for technical competence and quality in all areas of testing and calibration. SCC accreditation to this international standard is recognized in a significant number of key foreign markets. As a signatory to various international and regional agreements, the credentials of SCC-accredited laboratories are recognized by all signatories to those agreements.

In addition to the accreditation of testing and calibration laboratories, SCC offers clients Proficiency Testing (PT) provider recognition, and Good Laboratory Practice (GLP) recognition.

“Geologists and management wanted to make sure our lab was up to standards with Good Laboratory Practice, and the best way to provide our client the proof of GLP, was to get accredited,” explains Andre Dionne of Goldcorp Inc.

Dionne believes accreditation has increased client confidence in their competence and expanded their potential to operate outside of Canada. “The long-term goal is to focus on being able to cater to the needs of all Goldcorp sites in Canada, and even abroad,” he adds.

Clare Glennon of the Saskatchewan Research Council, Geoanalytical Laboratories also makes the connection between SCC accreditation and her laboratories’ business growth and expansion.

“Geoanalytical a few years ago, as a lab, had about 20 people. Now we’re 90 people, so the amount of work we’re getting-in is really growing and we’re getting it from all over the world now,” she says. The laboratory performs analysis of customer samples for various international mining companies including some located in Brazil and Peru.

For mineral testing laboratories, accreditation has become a way to differentiate their services and demonstrate transparency in that their competence is being recognized by a credible authority.

“We could see that the trend was going that way for better accountability and traceability,” explains Activation’s Eric Hoffman.

In the experience of Steve Simpson of Becquerel Laboratories, larger international companies are more willing to engage with Becquerel as a direct result of their accreditation.

“It produces instant credibility,” says Simpson.

It provides proof that what glitters is gold, and that their clients, investors and the global community can trust the accuracy of the analysis they produce.

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