**NEWSALERT**
Bre-X sets date for Busang report
Reuters Story - April 25, 1997 20:11
By Darren Schuettler
TORONTO, April 25 (Reuter) - The Busang gold mystery may be
solved by late next week, Canadian gold prospector Bre-X
Minerals Ltd. said on Friday, amid reports that its
major partner may soon abandon the controversial project.
Bre-X said in a statement that Strathcona Mineral Services
Ltd., the consulting firm hired by Bre-X to audit its Busang
project, expected to issue an interim report on its findings by
the end of next week.
Rumors have swirled around Busang since the century's
biggest gold find was cast into doubt on March 26 when partner
Freeport-McMoRan Copper and Gold Inc. said its
preliminary tests found "insignificant" amounts of gold.
Panic selling of Bre-X shares lopped almost C$3 billion
($2.1 billion) or 80 percent from the company's stock market
value. Since then investors have anxiously awaited Strathcona's
findings.
"Upon receiving and reviewing the interim report, Bre-X
will be promptly issuing a press release relating to the
interim report," Bre-X Chief Executive David Walsh said.
Confusion over Bre-X's announcement on Friday sparked a
brief bout of heavy selling on the Toronto Stock Exchange. Bre-X sank to a session low of C$2.50, but recovered to finish
down C35 cents at C$3.25 on 8.9 million shares.
Freeport's annual meeting next week was also expected to
draw intense media and investor attention, analysts said.
Citing unidentified sources, Indonesia's Harian Ekonomi
Neraca newspaper on Friday said Freeport was planning to pull
out of Busang before Strathcona's results were released.
"At best, this way Freeport can avoid any possible (legal)
suit that may arise. And this (suit) is quite possible " the
anonymous source told Neraca.
Freeport spokeswoman Kristin Lemkau said on Friday the firm
had no comment beyond its earlier statements on participating
in the Busang project.
"We're not going to comment. We will elect to participate
only if the development is economically feasible," she said in
a telephone interview.
Freeport's annual meeting is on Tuesday, April 29 in New
Orleans.
Bre-X has a 45 percent stake in Busang, Freeport has 15
percent, the Indonesian government 10 percent and local
companies the remaining 30 percent.
The Neraca report had little impact on Freeport's stock,
which closed down 25 cents at $28.625 on the New York Stock
Exchange. But some analysts said the report was interesting.
"My sense is there may be a kernel of truth in it," one
U.S. mining analyst said of the Neraca report, noting other
reports this week that Freeport Chief Executive Jim Moffett met
with Indonesian President Suharto on a recent visit to
Indonesia.
Freeport has not confirmed or denied these reports, saying
it does not release specific travel plans of its officials.
The analyst also said that several days before Freeport's
statement on March 26, Neraca cited unidentified sources as
saying that Freeport did not get the same Busang results as Bre-X.
A Canadian analyst said Bre-X investors were divided into
two camps heading into next week.
"One group thinks there is very little chance that the gold
is anywhere near the amounts that Bre-X stated and the other
group is firmly entrenched that this is all a grand
conspiracy," the analyst said.
Meanwhile, Strathcona has promised tight security to
prevent its findings from leaking out.
Assay labs in Indonesia, Canada and Australia will not
report their results to Strathcona until all the labs have
completed their work. Only one or two persons in management at
each laboratory will have access to the final assays,
Strathcona said.
The principal conclusions in the interim report are not
expected to change when Strathcona releases its full report six
weeks later.
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