To All!!
Wednesday, April 30, 1997
Freeport holds firm
Further testing of samples from holes covering thousands of acres of Busang
still shows no gold, says Jim Bob Moffett
Busang's 'bright' prospects
Strathcona unlikely to clarify Bre-X picture
By PAUL BAGNELL
Mining Reporter The Financial Post
ÿNEW ORLEANS -- Jim Bob Moffett stuck to his guns yesterday and said that
Freeport-McMoRan Copper & Gold Inc. has found no gold at Busang despite drilling holes over
"thousands of acres."
ÿThe gruff Texan at the helm of Freeport, who has become one of the Busang saga's main characters,
also said his company still cannot find any gold after further testing of rock taken from the seven holes
it drilled on the property in East Kalimantan, Indonesia.
ÿBre-X Minerals Ltd. believes Busang contains at least 71 million ounces of gold. Freeport agreed
earlier this year to become operator and 15% owner of a Busang mine, but only if the project can be
shown to be economically feasible.
ÿLater this week, Strathcona Mineral Services Ltd., a consulting firm hired by Bre-X, is expected to
hand over to Bre-X the results of a month-long "audit" of Busang's mineral content. The report is
expected to answer the mystery's central question: is there or is there not enough gold there to build a
mine?
ÿIf Freeport has any doubts about its discovery of only "insignificant" quantities of gold in the seven
holes it drilled, none was evident yesterday at the annual meeting.
ÿSeveral times, Moffett repeated his company's vow it will walk away from its agreement with Bre-X
if Busang can't be proved to be economically worthwhile.
ÿ"We will participate only if we can confirm an economic deposit," Moffett said. "If not, we will
withdraw."
ÿIn that event, "Bre-X can find another partner or go forward by itself.
ÿ"The determination will be made by Freeport only, and others will make their own determinations."
ÿMoffett said Freeport's seven holes were drilled across "several thousand acres of mineralization" in
the area of the discovery known as Busang II, long depicted by Bre-X as home to most of Busang's
gold.
ÿCraig Saporito, Freeport's vice-president of investor relations, said further testing of rock cores from
the seven holes after the company's dramatic March 26 press release had failed to turn up any gold.
ÿ"We've continued to analyse those cores and do some additional testing, and the results haven't
changed. We certainly stand by the results we've released to the press..
ÿFreeport has not drilled new holes beyond the original seven, he added.
ÿIn its audit, Strathcona has drilled six more holes.
ÿ"We are hoping the additional drilling will shed light on the situation," Moffett said.
ÿFreeport's due diligence review has been "preliminary and inconclusive, but we have not been able
to confirm Bre-X's mineralization."
ÿMoffett's remarks were made during a brief address to shareholders.
ÿThe annual meeting itself was strictly controlled by Freeport officials.
ÿIn addition to the Busang controversy, the company faces persistent criticism of its environmental
and human rights record at its Grasberg copper-gold mine in Irian Jaya, also in Indonesia.
ÿReporters were not allowed into the meeting and had to watch the proceedings on closed-circuit
television in a separate room in the Freeport headquarters.
ÿCompany officials said this was because lack of space in the meeting room, although only 11
reporters were present and some people attending the meeting said there were numerous empty
seats.
ÿAs for shareholders, their questions were only permitted if they concerned one of the three items on
the agenda.
ÿIn a brief question-and-answer period, questions were limited to 60 seconds and had to be about
one of the three agenda items.
ÿA man who tried to query Moffett on his US$33.7-million pay package was told to stop or be
escorted out of the meeting.
ÿ"I want you to sit down or I'll ask you to leave," Moffett said. "You are not going to address things
that are not part of the business of this meeting."
ÿ
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