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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.
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To: Bill Jackson who wrote (8355)3/26/1997 10:15:00 PM
From: Junaidi   of 28369
 
The assay laboratory used by Bre-X has a clean bill of health.

There is no doubt that the work done by Indo Assay Labs is valid. They have been operating for decades with hundreds of clients and are very well respected. (ask ANYBODY in the industry in Indonesia). As someone has pointed out, the reason for doing leach tests is to test a larger weight of sample. A typical fire assay only tests 50 grams of material while a cyanide leach might test 2000 grams. Generally, if the gold particles are fine grained and the sample is ground fine enough and is homogenized properly, a fire assay gives a representive determination of the gold content of the sample. A problem can arise if the gold is coarse and even with fine grinding (because the gold is soft and does not break down) it is very difficult to get an accurate determination from a normal fire assay.

There is a more advanced fire assay method (and more expensive) called screen fire assay which overcomes the problem (I won't go into this here).

My understanding is that may of the Busang sample were checked by fire assay and screen fire assay and that these checkes confirmed or exceeded the cyanide leach results. (One would expect screen fire assay to give higher values as the cyanide leach will only determine the 'cyanide extractable gold' and leave behind any non leachable gold. Screen fire assay should however extract all the gold.

If there is a problem with the Busang samples, the problem must have arisen BEFORE the samples reached the laboratory.

Given the reported size of the Busang orebody it is unlikely that the Freeport holes did not properly test the zone (you could hardly miss it).

Even not owning Bre-X stock. All stock associated with Indonesia are down badly. We are hurting badly as a result of this fiasco.

Someone gave a chronology of Busang discovery earlier. They forgot to mention that Busang 1 was discovered by Westralian Atan Minerals (WAM) in 1988. 19 holes were drilled. I have a list of the assay results from those holes (assay by fire assay and screened fire assay) and may post them if anyone is interested??

Let me say that the reason that many of us here in Indonesia did not invest in Bre-X was that the resource they announced for Busang 1 did not agree with the original drilling results.

It is also interesting to note that many companies looked at Busang in 1989 and 1990. Major companies CRA, BHP and INCO made site visits, looked at the data and did not make any proposals to WAM.

It appears that their conclusions may be vindicated in the end (although I imagine they were feeling a bit sick and sheepish about it a few months ago). No-one is laughing but I imagine CRA et al and are smiling wryly.
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