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Bre-X Minerals shares soar amid rumors
Reuters Story - April 23, 1997 22:02
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By Darren Schuettler
TORONTO, April 23 (Reuter) - Shares in Bre-X Minerals Ltd.
soared on the Toronto Stock Exchange on Wednesday as
rumors continued to swirl around the Busang gold deposit and
analysts sifted through drill results from the site.
The Calgary, Alberta-based company's stock jumped C$1.22 to
close at C$3.62 on massive turnover of 17 million shares on
Canada's biggest stock market.
Frenzied late afternoon trading pushed the volatile stock
to a session high of C$5.75.
Bre-X has been embroiled in controversy since preliminary
tests by its partner, Freeport-McMoRan Copper & Gold Inc.,
on the gold property indicated the deposit may contain
"insignificant" amounts of gold.
The announcement prompted panic selling of Bre-X shares
last month, lopping almost C$3 billion ($2.2 billion), or more
than 80 percent, from the company's stock market value.
Reports on Wednesday that Freeport recently received the
first independent tests of the Busang deposit by a Canadian
firm were challenged by Freeport and Bre-X officials.
The reports said Freeport received the tests while Freeport
Chief Executive Jim Bob Moffett was in Indonesia and held
meetings with President Suharto.
"The testing is still going on and Freeport has not been
informed of any assay results," Freeport spokeswoman Kristen
Lemkau told Reuters by telephone.
Bre-X commissioned Toronto-based Strathcona Mineral
Services Ltd. last month to conduct an audit of its Busang
project. The results are expected in early May.
"The audit was commissioned by Bre-X and it is going to be
submitted to Bre-X," said Bre-X spokesman Richard Wool, adding
that it was Bre-X that would release the audit results.
Bre-X late on Tuesday released drill results from 22 holes
at the Busang property that were not included in its resource
calculation of 70.95 million ounces of gold released on
February 17.
Bre-X said 16 holes produced values ranging from 1.05 grams
per tonne to 7.58 grams per tonne, while six holes showed no
significant amount of gold.
"They were sort of old holes, but I think investors are
taking it positively," said one mining analyst.
John Kaiser, editor of the Kaiser Bottom-Fishing Report,
said the drill results released on Tuesday were positive, but
not enough to quash the controversy surrounding Busang.
He said the final word on Busang was still up to two weeks
away.
"We need to know what the numbers for this deposit run as
produced by strictly controlled sampling, drilling and assaying
procedures. Until we get a batch of results where we know that
there is nothing screwy along the way, everything is
uncertain," Kaiser said.
The Busang saga took another curious twist on Wednesday
when an Indonesian company linked to President Suharto raised
its stake in the Busang property.
Nusamba Group, 80 percent-owned by three foundations headed
by President Suharto, raised its stake in the main Busang II
section to 25 percent. Pt Askatindo Karya Minerals reduced its
stake to five percent from 15 percent, said a spokesman for the
family-owned company.
Bre-X has a 45 percent stake in Busang, Freeport has 15
percent and the Indonesian government 10 percent.
Copyright 1997 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly
prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the
content, or for any actions taken in reliance thereon.
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