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March 31, 1997
"Bre X Tells of Ill Treatment" Bre X Article in the Calgary Herald (Alberta, Canada) Mar 30, 1997
- "Bre-X Tells of Ill-Treatment" - Bre-X Article in the Calgary Herald (Alberta, Canada) - Mar 30, 1997
March 30, 1996
by STEPHEN EWART, Calgary Herald
Bre-X tells of ill-treatment
VP complains about the stock market, the media and a plot
STEPHEN EWART Calgary Herald
Bre-X Minerals Ltd. is feeling persecuted.
There's been ill-treatment from the Toronto Stock Exchange, harassment from the news media and the spectre of a sinister plot to plunder its share of an Indonesian gold deposit, said Bre-X vice-president Steve McAnulty
"Many of the things that have caused the problems have been rumors, innuendo and unnamed sources," McAnulty said Saturday "We just have to wait for the real facts to come out."
Bre-X is particularly upset the TSE opened trading on Bre-X shares Thursday afternoon. Bre-X had urged the exchange to maintain a moratorium on trading of its stock until Monday so investors would have had time to digest a report which cast serious doubt on the potential of the deposit billed as the largest in the world.
The stock dropped $13 to $2.50 in 30 minutes, before the volume of trades knocked out the TSE's computers. Nearly $3 billion was cut from Bre-X's market value.
"We implored them not to open," McAnulty said in the first public statement from Bre-X since the massive sell off. "They didn't honor that request. They said the matter wasn't open for discussion."
The TSE said it opened trading after almost two days because it understood a so-called grey market for Bre-X shares had emerged, in which a select group of investors were selling shares. Reports had shares changing hands for $5 or less.
Bre-X has a strategy in place to deal with the situation, said McAnulty, adding there's likely little it can do immediately about the stock price.
The company will wait for Strathcona Mineral Services Ltd. of Toronto to complete its audit of ore from Busang. The process could take a month.
Bre-X's woes began 11 days ago when chief geologist Mike de Guzman plunged to his death from a helicopter near Busang. Police recovered a suicide note, but de Guzman's family has said they don't believe he took his own life.
Within days of his death, a newspaper report in Indonesia cited unnamed sources who said the Busang deposit contains negligible amounts of gold. When Bre-X president David Walsh returned to Calgary from his home in the Bahamas last Monday, he threatened lawsuits against the people behind what he called a campaign to discredit his company
Two days later, Bre-X asked the TSE to halt trading and acknowledged (*) there was a "strong possibility" Busang's potential reserves-pegged at 71 million ounces-were overstated.
- Please Note -
(*) Misquote: Bre-X has never acknowledged that Busang's potential reserves were overstated.
- Bre-X does not share that opinion.-
Fact: "Bre-X was advised by Strathcona Mineral Services Ltd., an independent Canadian mining industry consultant, that there appears to be a strong possibility that the potential gold resources on the Busang project in East Kalimantan, Indonesia, have been overstated because of invalid samples and assaying of those samples." (March 26, 1997 NEWS RELEASE)
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