BRE-X, Indonesia, Ashanti Goldfields, Strong Companies. Message Board

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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.

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To: Nugget who wrote (8445)	3/27/1997 8:19:00 AM
From: Nugget	of 28369

Another: Dow Jones Business News -- March 27, 1997 Indonesia/Busang/Australian Miners -2: Watching Valuations Dow Jones News Services Eyres Reed's Colleran said the situation at Busang, previously touted as the world's richest gold deposit, may prompt the market to revisit valuations on gold exploration stocks. ''Maybe people are starting to rethink how valid it is to put these huge expectations on preliminary exploration results.'' Negative sentiment surrounding Busang was seen to touch Australian gold miner Newcrest Mining Ltd., with its shares sliding to a near 12-month low. An institutional dealer said market concerns centered on Newcrest's promising Ridgeway gold prospect in New South Wales state and the current lack of information in the market about a drilling program currently underway at the project. He said that while Ridgeway has the potential to be the largest discovery in Australia this year, the news about Busang had heightened investor concerns about its potential. Newcrest shares closed at A$4.18, down 7 cents from their Wednesday close. Other gold stocks and the market in general closed higher Thursday. David Walker, head of mining research at ABN Amro Australia Hoare Govett (Securities) Ltd., said that apart from a kneejerk fall in certain local stocks, Busang could have wider implications for North American investment in Australian exploration projects. Busang has the potential to cause ''a crisis of confidence in North American markets about exploration in general and exploration in far-flung places.'' ''In some respects, those North American markets have been used by Australian explorers to raise capital ... because they can't get the funds (in Australia). The problem for all of us is going to be that this situation ... could see a decline in available capital for this market.'' However, Walker said he didn't think corporate disclosure problem on the scale of Bre-x's with Busang could occur in Australia. ''It's very clear that our regulatory system ... is far more rigorous than what occurs in the Canadian exchanges,'' he said.

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