Have you seen this from E-Charters. R.M.C.
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The Canadian Mining Newsletter
April 05 1997
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BRE-X MINERALS LTD. - TORONTO STOCK EXCHANGE - ONTARIO SECURITIES
COMMISSION -
Busang Gold Project
A copy of the Bre-X Engineering Report was provided by The
Toronto Stock Exchange and the Ontario Securities Commission.
For a complete report contact:
TSE Listings Department, $10 copying, $25 handling
8th floor,
Exchange Tower,
2 First Canadian Place,
Toronto, Ontario, M5X 1J2,
Canada
Tel: (416) 947-4520
Ontario Securities Commission
Market Operations
Paul D'Souza
Tel: (416) 593-8313
Bre-x Minerals Ltd.
Busang Gold Project
Check Assay Program - March 1997
P.T. KILBORN PAKAR REKAYSA
The Garden Centre, Suite 6-06
Cilandak Commercial Estate
Jalan Raya KKO, Cilandak
Jakarta 12560, Indonesia
Table of Contents (tables and Appendices not included)
Section Page
1.0 Disclaimer 1-1
2.0 Scope of Work 2-1
3.0 Sample Selection 3-1
4.0 Sample Collection 4-1
5.0 Sample Preparation 5-1
6.0 Assay Procedure 6-1
7.0 Review of the Assay Results 7-1
8.0 Schedule 8-1
Appendices:
A. Sample Collection Photographs
B. Chemex Assay Certificates
C. Acme Assay Certificates
1.0 Disclaimer
This report was prepared by P.T. Kilborn Pakar Rekayasa
("Kilborn") pursuant to the contract for study entered into
on October 12, 1995 between P.T. Westralian Atan Minerals and
Kilborn. The opinions, judgements and conclusions provided herein
are based on information provided by others, including but not
limited to the sample data provided by our client and its affiliate,
Bre-X Minerals Ltd (hereinafter referred to jointly as "Bre-X"),
and the assay results provided by Bre-X and P.T. Indo Assay
Laboratories ("LAL"), Chemex Labs Ltd. ("Chemex") and Acme
Analytical Laboratories Ltd ("Acme"). Kilborn has, with the
permission of Bre-X, relied upon such information and has assumed
that such information is accurate, and Kilborn has not made any
independent inquiry as to the accuracy of such information, nor does
Kilborn make any warranty in respect thereof.
This report reflects Kilborn's best judgement in light of the
information available to it at the time of preparation.
No one other than P.T. Westralian Atan Minerals and/or its affiliate
Bre-X Minerals Ltd. may rely upon the information contained in the
report, and any use and/or reliance upon this repot or any information
contained in it are at the user's sole risk. Kilborn does not assume
any liability for any damages, if any, suffered by any third party as
a result of decisions made or actions based on this report or any
information contained in it.
2.0 Scope of Services
As part of the development program for the Busang Gold Project,
Kilborn was requested by Bre-X to arrange for an independent program
to check the assay results produced by LAL, whose results were used by
Kilborn in the resource calculations. To complete this program,
Kilborn was requested to independently select random samples from among
the samples which had been collected and stored by Bre-X throughout the
deposit, supervise sample preparation of these random samples, select
two independent laboratories to complete the check assays, perform a
statistical analysis of the results and report the findings of the
program to Bre-X, the whole as more fully set out hereafter. The
results of this program are presented in this report.
3.0 Sample Selection
Kilborn compiled an initial list of 473 samples that were to be used as
the basis of the check assay program. These samples were randomly
selected by Kilborn from among the samples which had been collected by
Bre-X drill holes located between section lines SEZ-44 and SEZ-69.
This list is presented in Table 1. The list was compiled based on the
drill hole database prepared by Bre-X, which was completed by the end of
November 1996.
In January 1997 Kilborn selected additional samples that represented
those that were assayed between December 1996 and January 1997. In
addition to samples randomly selected by Kilborn, Bre-X selected
others to confirm assays previously conducted by LAL that had appeared
anomalous.
These assays appeared anomalous due to unexpected initial high and low
grade assays. The initial list of additional samples specified by Bre-X
and Kilborn is presented in Table 2.
4.0 Sample Collection
The samples randomly selected by Kilborn and those specified by
Bre-X were stored in the Bre-X warehousing facilities in Loa Duri.
Bre-X informed Kilborn that these samples had been previously crushed,
split, bagged and labelled as part of the initial sample preparation and
assay procedure conducted by Bre-x and IAL. As a result of the initial
sample preparation procedure, all samples used in the check assay program
were hammer mill rejects sent by Bre-X and/or IAL to the Bre-X
warehousing facilities in Loa Duri. Depending on the date of the initial
sample and the expected grade based on visual core inspection by Bre-X,
the initial sample preparation was completed either at Indo Assay
Laboratories (IAL) or at Bre-x's onsite sample preparation facility.
During the collection of the check samples, each sample was weighed to
ensure that sufficient sample was available to complete the check
assays. Samples that weighed less than 5.0 kilograms were not taken to
ensure that some sample was retained in the Bre-X warehouse facilities.
After selecting and weighing the initial specified hammer mill reject
samples the following conditions were noted:
9 of the random samples initially specified by Kilborn were already
exhausted from previous assaying.
7 sample from hole BSSE-198 specified by Bre-X were not available
since, according to IAL, the entire reject sample had been collected
by Barrick Gold and used in their check assay program.
33 samples weighed 4.0 kilograms or less and were considered to
beinsufficient for resampling.
80 samples weighed less than 5.0 kilograms and were also considered to
be insufficient for resampling.
When insufficient sample for reassay was identified, the next
available adjacent sample was substituted for the insufficient sample.
The final sample database used in the check assay program is presented
in Table 3.
5.0 Sample Preparation
Once the hammer mill rejects were located at the Bre-x warehousing
facilities in Loa Duri the samples were prepared according to the
following procedure
-all samples were weighed to confirm that a minimum of 5.0
kilograms of hammer mill reject sample was available.
- samples were split using rotary and riffle splitters,
- two 2.0 kilogram samples, labelled A and B, each weighing
approximately 2.0 kilograms were prepared,
- samples A and B were collected in plastic bags and labelled
with the drill hole ID and the original sample number,
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CMN: This above procedure is a fatal flaw. The original sample
number is NEVER used and the drill hole ID is scrupulously
avoided to prevent corrupt lab practices. If IAL were salting
they could easily make sure their salt was matched in the
check assays as they had the numbers and control of shipping.
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- samples A and B were weighed and their actual weight recorded,
- the remaining hammer mill reject was returned to the original
bag and weighed and returned to the warehouse for future reference,
- the sample splitters were cleaned with compressed air before
processing the next sample,
- the check assay samples A and B were deposited into plastic
drums for shipment. A total of 16 drums, 8 drums for each laboratory,
were sealed and shipped by others to IAL,
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CMN: You don't ship to the people who you may be trying to check.
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- IAL received shipping instructions and addresses for Chemex and
Acme and was responsible for the transportation of the samples.
- Chemex and Acme utilized their Vancouver facilities to conduct
the check assay program.
The sample preparation was initiated on January 15, 1997 and took
a total of 4 days to complete. The sample collection was supervised
by Ms. Zophia Ashby (Kilborn) and by Mr. Rudy Vega (Bre-X). The
sample collection and preparation was completed by a crew of 7
Indonesian labourers under their supervision. Ms. Ashby was on site
for the first two days until the Indonesian crew had gained enough
experience to perform a satisfactory job.
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CMN: Negligence..Fox left in henhouse...
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Kilborn understands that Mr. Vega supervised the sample collection
until completed.
Photographs of the equipment and procedures used during the
sample collection and preparation are presented in Appendix A.
6.0 Assay Procedure
Kilborn had requested that each of Chemex and Acme perform two
assay procedures for each sample. The first procedure was to utilize
the standard 36 hour bottle roll cyanide assay that had been used by
LAL on all previous samples. As well as the cyanide assay, Kilborn
also requested that each laboratory analyses each sample by metallic
fire assay methods.
The cyanide assay method required that a 1000 gram sample be
pulverized to 95 percent passing 200 mesh and a 750 gram sub-sample
be taken and leached in a cyanide solution for 36 hours. The final
leach solution after 36 hours leaching was analysed by atomic
absorption analysis.
The metallic fire assay method required that a 1000 gram sample
initially be pulverized to 90 percent passing 150 mesh. The
pulverized sample is then screened at 150 mesh to separate the
plus/minus screen fractions. The entire screen fractions were subjected
to fire assay and the total gold weight in the plus size fraction
determined by weighing the gold button. The minus size fractions were
sampled in duplicate and the gold content was determined by
conventional fire assays on 30 gram samples.
The total gold content in the initial sample was mathematically
calculated based on the weight of the gold in the plus size fraction,
the weight of the plus size fraction, the average of the duplicate fire
assay on the minus size fraction and the weight of the minus size
fraction.
The results of the assays conducted by LAL and the check assays
conducted by Chemex and Acme are summarized in Table 4.0. The
certified assays obtained from Chemex are presented in Appendix B.
The certified assays from Acme are presented in Appendix C.
7.0 Review of the Assay Results
The assays were conducted by Chemex and Acme. The assay results
obtained from the independent laboratories were compared to the
initial assays obtained by Bre-X from LAL. The results of this
comparison were presented in Table 4.0
In order to determine the significance of the check assay
results, Kilborn performed a statistical analysis of the database in
an attempt to determine the correlation of the assay results and
the standard deviation of the individual assays. The results of this
evaluation is presented in Table 5.0.
Based on a review of such statistical analysis, Kilborn concludes
that based on a linear regression analysis of the data that there
appears to be a strong correlationship between the various databases
and that the results from both the metallic fire assay and the cyanide
leach assay on the hammer mill rejects appear to confirm the initial
gold determination done at LAL utilizing the cyanide leaching technique.
The standard deviations for the individual samples also indicate that
there is a relatively large variance in assays for individual samples.
As a result of this trend, Kilborn feels that there will be significant
difficulty in reproducing the results of individual samples. For this
reason, larger samples and complete treatment by either cyanide
leaching or the use of the metallic fire assay procedure is
appropriate. The standard deviation and variance observed in the
analysis of the database is consistent with previous test work done
on Busang samples and is typical to other gold ores where coarse free
gold is known to occur.
8.0 Schedule
The initial collection of samples form the hammer mill rejects
stored at the Bre-X warehouse facilities was initiated on January 15,
1997 and the final results were obtained from both Chemex and Acme on
March 27, 1997.
The delaying factor in completing the analysis is the bottle roll
capacity of the Chemex and Acme laboratories and the long durations
required for the cyanide leaching method.
Table 5.0 Results of Statistical Analysis
Chemex Acme
CN Assay Metallics Total CN Assay Metallics Total
R Squared Coeffecient 0.954 0.973 0.978 0.958 0.964 0.964
Standard Deviation 1.07 0.67
# Data Points 581 581 581 575 575 575
Avg Head Grade
gm Au/t 3.83 3.54 n/a 3.40 3.54 n/a
Bre-X Head Grade gm Au/t 3.7 3.41
Chemex Acme All All Data
CN CN CN Chemex Acme All
Assay Assay Assay Metallics Metallics Metallics Total
R Squared
Coefficient 0.936 0.958 0.967 0.950 0.954 0.970 0.974
Standard
Deviation 0.97
# Data Points 574 574 574 574 574 574 574
Avg Head
Grade gm Au/t 3.41 3.43 3.?7 3.54?
Bre-X Head
Grade gm Au/ 3.41
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There is a tide in the affairs of men, Which, taken at the flood, leads
on to fortune; Omitted, all the voyage of their life Is bound in shallows
and in miseries. We must take the current when it serves, Or lose our
ventures. William Shakespeare, Julius Caesar, Act: IV, Scene: iii
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