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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies.

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To: Dennis Martin who wrote (14549)4/16/1997 2:54:00 PM
From: R.M.C.   of 28369
 
I am posting part of the referenced article because this is the crux of the problem as I see it. Folks, Bre-x already has the problem in hand. Freeport screwed up. My question is, did they do it deliberately or accidentally?

"In order to illustrate the definitive process by which core at the Busang deposit must be assayed the following detailed historical background was provided to me, over the weekend, by our chief metallurgicalist under the direction of John
Felderhof both of whom are currently at the Busang site.

"At the early exploration stage, prior to the acquisition by Bre-X
Minerals Ltd. of the Busang property, the problem of sampling and
assaying of the Busang ore had already been identified. Reproducibility
in fire assaying had been a major constraint. Gold assay results could
fluctuate ñ 100% or in short, ore could be waste and waste could be ore.

With this problem, the Bre-X technical team decided to use a two-metre
full-core sample instead of split core for better assay accuracy. Initially,
the fire assay technique was used with the statistical average of the repeat
assays as the final figure. Intensive and extensive studies were conducted
to determine the most effective and efficient laboratory process.

Results of the study were as follows:

1.In a screen-fire test, 80% of the gold was found to be in the +150
mesh (106 micron), and the size fraction was 5% of the original
sample volume.
2.Metallurgical tests showed that most of the gold is in the +106
micron to -400 micron-size range.
3.Panning tests from the diamond saw core cuttings showed visible
gold.
4.Test samples sent to various laboratories showed wide variances.

The Kelian Mine, which has similar geology to Busang, had the same
assaying problem. Ultimately, Kelian adopted the cyanide leach
technique.

After a thorough review, the Bre-X technical team also adopted the
cyanide leach technique.

In evaluating the Busang deposit proper orientation and full
understanding of the Busang geology is a must."

Bre-X director Dr. Paul Kavanagh recently commented that "After observing
the uniform appearance of long intervals of the mineralized core in SE
Zone holes during a visit to the Busang property in the fall of 1995, and
after being told of a considerable backlog of the 2-metre samples waiting
to be assayed at the Indo Assay laboratory in Balikpapan, he suggested to
John Felderhof that the individual sample length be extended to 3 metres
from 2 metres, thereby reducing the number of samples by 1/3. John
Felderhof would not accept that suggestion, arguing that it would reduce
the accuracy of the assay results of the gold grade of the mineralization.
When queried by Kavanagh at the time, a highly-experienced Canadian
gold exploration geologist supported Felderhof's opinion."
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