Australian Accounting Standard AASB 6 Exploration for and Evaluation of Mineral Resources states that exploration and evaluation costs of a mining operation:

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AASB 6 states that exploration and evaluation costs of a mining operation can be recognised as expenses or carried forward as an asset depending on the circumstances of the particular operation. The decision on whether to expense or capitalise these costs is based on the likelihood of discovering economically recoverable mineral resources and the ability to extract them. AASB 116 is not applicable to exploration and evaluation costs. Option C and D are incorrect as they do not consider the circumstances of the particular operation as required by AASB 6.