To All
From this Mornings Financial Post hope this is not a re-posting.
New clues in Bre-X assay mystery
Area where 13-kilogram samples were bagged presented best opportunity for any
tampering at Busang site, experts say
Is de Guzman really dead?
By DAVID THOMAS and SANDRA RUBIN
The Financial Post
ÿA recent account of Bre-X Minerals Ltd.'s assaying procedures in Indonesia has
failed to convince some experts that its fabled Busang find will ever become a mine.
ÿShares of the Calgary junior (BXM/TSE) rose 40› to $2.67 yesterday as investors
reacted to a detailed report of the sampling and assaying methods that Bre-X
geologists used at the Busang site.
ÿYesterday's market activity indicates that some investors still have faith in Bre-X's
claim that Busang will become one of the world's richest mines
ÿHowever, experts said the account by Bre-X may actually help investigators
pinpoint where the suspected tampering of ore samples took place.
ÿIndustry sources claim it was possible for workers at the site to salt, or add more
gold to the rock, as it was broken into pieces to be loaded into sample bags.
ÿ"That would be the logical place if you were doing any salting," said a top Wall
Street gold analyst. "It's not the only place, but it would make the most sense."
ÿHe said Bre-X's account of its methods does nothing to eliminate fears of
tampering at the Busang site.
ÿ"It still doesn't answer the question: Did anybody do independent drilling,
independent assaying, and what did they get? Well, the first ones were Freeport -
and they got nothing.
ÿ"It's nice that they laid out their sampling assay procedure methodology. That's
great. So that's what was supposed to happen. But the question is: Did the process have integrity? And this doesn't answer that."
ÿBre-X has been under siege in recent weeks after preliminary tests by its U.S. partner Freeport-McMoRan Copper & Gold Inc.
turned up "insignificant" amounts of gold in what was believed to be one of the richest finds ever.
ÿAn inside source said yesterday that some of the evidence - several tonnes of it - is missing as the result of two suspicious fires
at the Busang camp.
ÿOnly one fire has been acknowledged by Bre-X, in January. Bre-X chief executive David Walsh said at the time that nothing
material had been lost.
ÿThe leftover rock, which is believed to have been removed and stored separately before the suspected tainting process took
place, would prove conclusively if salting had occurred, several mining experts agreed.
ÿOnce found, the rock, known as skeleton core, may not be identifiable, but it will still reveal the true value of Busang, the
insider said.
ÿ"The core boxes and the labels burned, but unless somebody suggested that the gold [was] ripped out of the core, the skeleton
core is still valid."
ÿTesting of those cores would allow one to conclude "beyond a shadow of a doubt that there was no gold to start with."
ÿHe said he suspected the core was dumped somewhere near the Busang camp and will turn up soon if it hasn't already been
discovered.
ÿ"It's a couple of tons of material [and] that cannot go into hiding."
ÿBre-X, which did not return phone calls yesterday, stands by its estimate that Busang holds 71 million ounces of gold.
ÿOn Wednesday, director Paul Kavanagh told Dow Jones news service that salting at Busang was impossible. He concluded that
the only other possible explanation for the Busang riddle is a mistake by its partner Freeport-McMoRan.
ÿAs for Bre-X's procedural account, which was released on the Internet on Wednesday, the inside source told the The Financial
Post: "It's all smoke and mirrors. Nothing is inconsistent with the scenario that I believe to be extremely valid."
ÿThat scenario is that Bre-X's rock samples were systematically tainted to boost their gold values and that Busang is unlikely to
ever become a gold mine.
ÿ"This will go down in history as one of the most incredible stories," he predicted.
ÿThe procedural account follows almost every step that Busang rock samples took after coming out of the ground.
ÿExperts surveyed, including the inside source, said that tampering could have occurred when the 13-kilogram samples were
being bagged before being sent to the assay laboratory.
ÿ"[Bagging of broken core samples] is the stage at which it makes sense to add gold," offered John Kaiser, a mining analyst
with San Francisco-based Canspec Research.
ÿ"It's a very good place to salt - if you were going to," added George Duncan, president of Accurassay Laboratories in Kirkland
Lake, Ont.
ÿNeither Kaiser nor Duncan concluded that tampering had taken place but each confirmed that a massive tampering job was
feasible.
ÿIt was suggested yesterday to The Financial Post that the proposed tampering might have taken place in the form of a mixture of
gold and other heavy minerals at the bagging stage.
ÿIf this theory is correct, placer-type river gold, panned locally, would likely have been the source.
ÿIf tampering of this sort took place, the consensus is that the proof is lying at the bottom of any remaining bags of prepared
samples.
ÿIf most of the gold could be recovered from this "crumbly stuff" at the bottom of the bags and not from the broken chunks of
rock, "you'd be looking at tampering," offered Kaiser.
ÿDuncan said if chunks or particles of gold can be found in the bottom of the bags, there must also be matching visible gold on
the core from where it had broken off.
ÿ"If I couldn't find [the other half of the gold] on the core, then I would immediately become suspicious that the gold does not |
