Whodunit? Searching for Bre-X clues
Headlines:
Bre-X throws spanner in TSE works
Strathcona drills for Busang gold, and truth
Lawyers preparing Bre-X suits aim at TSE, SNC-Lavalin
By DAVID THOMAS
The Financial Post
The Busang mystery reads a lot like an Agatha Christie plot. After the murder, the reader is left with a room full of
suspects and has to figure out which one is guilty.
But while fortunes have been lost, no one is even sure a crime has taken place. If Bre-X Minerals Ltd.'s gold samples
were tainted, it's the crime of the century. For now, however, there are only questions.
Why are Bre-X's consultants now saying it's unlikely Busang holds 71 million ounces of gold, while Bre-X continues to
stand by its claim? And why can't Bre-X's U.S. partner, Freeport-McMoRan Copper & Gold Inc., find any gold where
Bre-X found rich grades?
What's left is a cast of characters and any one of them could have made a mistake:
Freeport McMoRan. Analysts say Freeport may have made a mistake in drilling or testing when it recovered
negligible amounts of gold from seven 250-metre holes punched last month. Four of the holes were "twinned," which
means they ran parallel and in close proximity to Bre-X's original high-grade holes.
To measure the gold content, Freeport used cyanide leaching of crushed ore, the same general process used by Bre-X.
Freeport also used standard fire assay tests and these returned "insignificant amounts of gold."
Bre-X chief executive David Walsh blames Freeport for the discrepancy. "Some kind of difference in assaying
procedure [is] . . . the only possible explanation I can personally think of," he said Tuesday.
If it isn't used properly, geologists say cyanide leaching can produce inaccurate results. What it wouldn't explain is how
Freeport recovered insignificant amounts of gold through both fire assay and cyanide leaching.
Kilborn Engineering Pacific Ltd., which did the resource calculations at Busang, has a solid reputation, geologists
say. When the story exploded, Kilborn's parent company, SNC-Lavalin Group Inc., distanced itself from the sampling
and assay work. Its mandate was only to crunch numbers, it said.
Strathcona Mineral Services. After being hired by Bre-X to get to the bottom of the mystery, Strathcona was
quick to conclude that the amount of gold at Busang was likely overstated due to "invalid samples."
Bre-X Minerals is facing increased scrutiny for its decision to use cyanide leaching to test for gold grades and for
crushing its entire drill cores, instead of splitting them and leaving half for future checks.
But cyanide leaching is both reliable and appropriate in this case, said one expert.
Wesley Johnson, of the Canadian Mineral Analysts Association. |
