NEWS REG BRE-X ASSAYS.....VERY INFORMATIVE
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Busang tampering challenged
Bre-X's detail on assays by Indonesian company
suggests any salting not done in field
Thursday, April 10, 1997
By Allan Robinson and Michael Den Tandt
The Globe and Mail
With files from Alexandra Eadie
Bre-X Minerals Ltd. said yesterday that it delivered uncrushed Busang rock
samples to its Indonesian assay laboratory--a disclosure that appears to reduce
the possibility that any tampering took place before the samples reached the lab.
PT Indo Assay crushed the rough chopped rock samples that it received in bags
from Bre-X before undertaking its assays, the Calgary-based company said.
Industry experts say it is extremely difficult to tamper with or salt rock samples
before crushing.
Salting is the mining industry's word for deliberately adding foreign gold to rock
samples.
However, the revelations yesterday do not explain why Freeport-McMoRan
Copper & Gold Inc. of New Orleans was unable to find significant quantities
of gold when it did test drilling on the site to confirm the Bre-X discovery.
Bre-X maintains that the deposit contains almost 71 million ounces of gold.
Bre-X director Paul Kavanagh told Dow Jones Service yesterday that he was
questioned by Freeport officials in Jakarta last month while they showed him the
data that showed "insignificant" gold at Busang.
"It was three or four hours of unrelenting doom," Mr. Kavanagh said. "I just
listened. They just kept talking and talking. They hoped there would be gold
there but they didn't find it."
Bre-X sent out a detailed description of its "sampling, assaying procedure and
methodology" by computer yesterday afternoon to a list of interested investors
and analysts.
The procedures described by Bre-X do not indicate whether the assay work
being done by PT Indo was being checked independently by other assay labs.
"Check assays" done later by Kilborn were not commissioned until early this
year.
Mining analyst Terence Ortslan of TSO & Associates of Montreal said "the
focus of suspected tampering seems to be shifting toward the assay method
[bulk cyanide leach method] and less so in the previous steps of the assay
procedure."
Dr. George Duncan, an assayer in Kirkland Lake, Ont., said it is difficult, but
not impossible, to salt raw drill core. He suggested one technique, which
involves spraying drill cores with gold chloride solution before they're crushed.
But the gold chloride theory doesn't hold up if Bre-X's descriptions of Busang
gold--that it is coarse and "nuggety"--are accurate.
"You wouldn't get coarse gold out of gold chloride salting," said Jack McOuat,
of mining engineers Watts Griffis & McOuat in Toronto. "It's gold in solution."
Mr. McOuat said sprinkling raw core with gold dust would be an extremely
innefficient method of salting. "In theory you could salt it after they'd smacked it
with a sledgehammer, when it's going into the [sample] bags. But it might get
stuck on the bag, or it might not end up in your 750-gram sample."
Mr. McOuat added: "To me, the time to do it, if you were going to do it, would
be after the material was crushed."
Bre-X said the sample rock was transported by truck to a wharf, where it was
sent down a river by boat to a seaside town, Samarinda, and then trucked to the
lab at Balikpapan where PT Indo Assay assumed control.
The 13-kilogram samples were crushed to pieces of about six millimetres in size
and washed in a barren wash. One kilogram of the material was sent back to the
Bre-X warehouse at Samarinda.
The remaining 12 kilograms were again crushed, to about two millimetres in size
and washed again. The lab kept 1.2 kilograms of the material for further
processing and assaying and the remaining 10.8 kilograms were collected for
storage at the Samarinda warehouse.
According to Kilborn SNC-Lavalin Inc., the Montreal-based company that
checked the assays, the "initial sample preparation" for its check assays--tests
done to corroborate Bre-X's assay results--were completed either at PT Indo
Assay or Bre-X's on-site sample preparation facility.
This raises a question. If tampering did indeed occur, and it took place at PT
Indo Assay's lab in Balikpapan, what about the rock samples prepared by Bre-X
at Busang and given to others, including Barrick Gold Corp.?
Check assays, carried out at two Vancouver assay labs, were done using
samples prepared at Busang. These confirmed Bre-X's findings.
Mr. Kavanagh told Dow Jones that there are only two answers to the Bre-X
riddle. There's "either a massive salting operation," he said, "or Freeport is
wrong."
The salting theory doesn't add up, he said, because more than 40,000 samples
of drill core "would have to have been individually salted continuously,
uninterrupted over a two-year period." Further, the grades of gold achieved from
the samples were highly consistent, he said, suggesting that a salting operation
would have produced some samples with very high grades because it would be
difficult to uniformly salt that many samples.
Several analysts and industry experts interviewed yesterday expressed surprise
that PT Indo Assay's work was done using raw core samples, rather than
crushed rock. The consensus view until now was that all core samples were
crushed at the Busang base camp.
A PT Indo Assay official was not available for comment.
Independent mining consultant Strathcona Mineral Services Ltd. is currently
undertaking current drilling at Busang on behalf of the Bre-X.
Bre-X also disclosed yesterday that there are three types of gold at its
Indonesian property.
Stephen McAnulty said the gold at Busang has "three different shapes," although
it is "largely free gold that has a nuggety effect." But some of the gold is
"rounded," and some of the gold has a third "shape," but he doesn't know what
it is.
Bre-X has known "for a long time" that Busang's gold has three different
shapes, but the company never made it clear, he said.
Meanwhile, another question has emerged with regards to Bre-X's contention
that the gold at Busang is coarse.
Stuart Averill, president of Overburden Drilling Management Ltd. of Nepean,
Ont., said in a recent interview that coarse gold should be visible to the naked
eye. Yet no one that he knows of has reported seeing coarse gold on a Busang
drill core.
"I have talked to people who were over there and nobody ever seems to
remember having seen any coarse gold on the rock."
Mr. Averill added that the drilling results reported from Busang--high grades of
gold, evenly distributed over a wide area--are "consistent with fine-grained gold
deposits across relatively even distribution."
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