Bre-X Executive Defends Integrity of Busang Gold Find
By JAY SOLOMON
AP-Dow Jones News Service
JAKARTA, Indonesia -- Bre-X Minerals Ltd. Vice Chairman John
Felderhof returned to Jakarta from North America Saturday
stricken over the apparent suicide of his closest confidante and
angrily denying a report that the giant Busang gold deposit he
helped discover is a hoax.
"I'm getting tired of all of these stories," Mr. Felderhof said
in a telephone interview. "And I'm 110% confident the gold is
there."
The Bre-X vice chairman added that he will be meeting with
geologists from Freeport-McMoRan Copper & Gold Inc. -- his
company's joint-venture partner in the Busang find -- to discuss
their continuing preliminary work on the deposit. Mr. Felderhof
also said that he expects to be present when Busang's
long-delayed Contract of Work is issued by the Indonesian
government later this week.
Mr. Felderhof's comments came in response to a news report in
Indonesia Friday that suggested the samples Freeport has taken
from Busang revealed less than the 71 million ounces of gold that
Bre-X claims is there. As recently as last month, Mr. Felderhof
suggested that there could even be as much as 200 million ounces
of gold at Busang.
Deposit's Viability Debated
The report in Indonesia's Harian Ekonomi Neraca newspaper quoted
an unnamed individual at another of Bre-X's Busang joint-venture
partners, PT Askatind Karya Mineral, as saying that Freeport's
initial core samples were severely disappointing. "It is possible
that the deposit is not as big as mentioned before," the
indivividual said in Friday's paper. "It could be that it is not
viable to mine the deposit."
This report caused Bre-X's shares to plummet on Friday both in
Toronto and New York trading. On the Toronto Stock Exchange,
Bre-X shares were suspended on news of the report. When trading
resumed, the shares dropped to C$15.20 (US$11.02), down C$2.25 on
extremely heavy volume of nine million shares. On the Nasdaq
Stock Market, Bre-X shares fell $1.625 to $11 on volume of 1.6
million shares.
Freeport's Chief Financial Officer Richard Adkerson, reached at
the company's headquarters in New Orleans, said that the report
was "wrong" and based on a "miscommunication." He added that his
company would only comment when it had completed due-diligence
testing of Freeport's own core samples taken in the past few
weeks.
Suicide Shock
Anxiety over Bre-X and Busang had already risen on Wednesday's
news that Bre-X's chief geologist Michael de Guzman had
apparently committed suicide. Mr. De Guzman, a Filipino, plunged
240 meters from a helicopter in transit to the Busang site from
the East Kalimantan town of Samarinda, according to the pilot.
Police in Kutai province reported finding a letter from Mr. De
Guzman addressed to his wife, stating that he hoped she would
take care of their children since disease had made it too
difficult for him to go on living. Mr. De Guzman is known to have
suffered from 14 cases of malaria, but Bre-X officials in Canada
said he was grief stricken after learning he had contracted
Hepatitis B.
Mr. Felderhof was deeply distraught over the loss of his
colleague and stated that he was unsure of the exact reasons for
his death. He could only say that it was a "great shock." Mr.
Felderhof added that Bre-X's other main geologist, Caesar Puspos,
had arrived back from the Philippines, where he is from. Mr.
Puspos is believed to be the last Bre-X employee to have checked
the company's drill samples before they were assayed.
Battle for Ownership
The latest fireworks surrounding Bre-X and Busang follows a
nearly five-month battle among many of North America's top mining
companies for control of the Busang sight. In addition to Bre-X,
Canadian companies Barrick Gold Corp. and Placer Dome Inc. bid on
the project before Indonesia's government finally chose on a
consortium consisting of Bre-X, Freeport and two Indonesian
companies.
The final ownership structure for Busang -- announced by
Indonesia's Ministry of Mines and Energy -- has Bre-X controlling
45% of the deposit, Freeport holding 15%, and Indonesian
interests controlling the remaining 40%. The Indonesian control
consists of 30% by companies headed by President Suharto's close
friend Mohammad "Bob" Hasan --Askatindo and PT Amsya Lyna -- and
the remaining 10% going to the Indonesian government. |
