Bre-X's Busang find said to be an 'elaborate hoax'
Mining expert says salting the rock samples would be as easy as adding a scoop of raisins to every bag
Indonesia bracing for Bre-X backlash
Geologist was once fired for embezzling
By DAVID THOMAS
The Financial Post
Bre-X Minerals Ltd.'s tale of gold riches at its controversial Busang exploration property is an elaborate hoax that is on the verge of being discovered, a senior
mining executive and geologic expert said yesterday.
"It's mind-blowing but it's true," he said.
The source, who spoke to The Financial Post on the condition of anonymity, said the mining and investment industries made a serious mistake in taking the
Calgary junior's results at face value.
In reality, gold could never have come out of the ground the way Bre-X's drill results said it did, he explained.
Bre-X is under siege after preliminary tests by its U.S. partner Freeport-McMoRan Copper & Gold Inc. turned up "insignificant" amounts of gold in what has
been touted as one of the richest finds ever.
Bre-X's and Freeport's results are now being rechecked by new drilling and testing in an audit by Toronto consultants Strathcona Mineral Services Ltd.
The new rock samples are being assayed in Australia, Indonesia and Canada. The results are expected to be delivered to Bre-X later this month or in early May.
Bre-X's gold at Busang occurred in patterns that were too even and homogenous to have been natural, the source argued.
"Mother Nature doesn't work that way. [Gold values] are supposed to vary all over the map."
The scientific detective work is enough to be conclusive that tampering took place, he said.
A further clinching piece of evidence that Bre-X's results are tainted was Freeport's inability to find any gold in four drill holes directly beside Bre-X's supposedly
rich holes.
"Gold grades don't diffuse into nothing over such a short area," he said.
Without coming to any conclusions of his own, Pierre Lassonde, president of Toronto-based mining company Euro-Nevada Mining Corp. Ltd., agreed.
"Technically it's impossible to drill a hole, never mind four holes, a metre away from a high-grade hole and recover no gold."
The source shot down recent statements by Bre-X chief executive David Walsh and mining financier Robert Friedland suggesting that salting was impossible.
Friedland said salting all the 30,000 or so bags of rock samples sent from Busang would have been "an exquisitely difficult thing to achieve."
"Nonsense," the source said. "It's like [adding] a scoop of raisins in every bag. It's absolutely so simple, it's sickening."
It would also have been relatively cheap, said University of Toronto geology professor Glenn Brown.
Brown has had his students calculate how much gold would have been needed to "salt" every bag of rock samples prepared at Busang.
Based on 30,000 bags, his class's estimate - which he supported - would have been about $15,000.
Several experts, including the unnamed source, who are convinced Busang will never become a mine, believe the rock samples were enhanced with alluvial, or
river, gold to boost the grades during later testing.
Walsh denied rumors that Bre-X chief geologist Michael de Guzman had been buying river gold from local gold panners up until his recent death.
He also said river gold would not have been effective for salting in any case.
"Alluvial gold would be far too fine to be of use in tainting core rock, for sure," he said.
But that view conflicts with the opinion of numerous mining experts contacted by The Post.
Several sources believe a mixture of panned gold and other minerals was added to Bre-X's samples when the rock was broken up and the bags sealed.
"It's very do-able," said an inside source who is 100%-convinced the property will never become a mine. "The gold did not come out of the ground, so it had to
have been added to the sample bags," he said.
The unnamed mining executive said one reason he spoke out was his concern for investors who are still buying shares in Bre-X.
"It's tragic. When it's all said and done, [the stock] is going to be worth a nickel, if that."
The stock (BXM/TSE) closed at $2.30 yesterday, giving the company a market capitalization of $504.1 million.
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