FREEPORT HOLDS FIRM: Further testing of samples from holes
covering thousands of acres of Busang still shows no gold, says
Jim
Bob Moffett
Symbol: FRPM U/FCX BXM U/BXMNF
Subject: FPT
PAPER The Financial Post
PDATE Wed 30 Apr 1997
EDITION Daily
PAGE 1
HEADLINE FREEPORT HOLDS FIRM: Further testing of samples from holes
covering thousands of acres of Busang still shows no gold, says Jim
Bob Moffett
COMPANY Freeport-McMoRan Copper & Gold Inc. (Z/FRPM, N/FCX); Bre-X
Jim Bob Moffett stuck to his guns yesterday and said that
Freeport-McMoRan Copper & Gold Inc. has found no gold at Busang
despite drilling holes over ``thousands of acres.''
The gruff Texan at the helm of Freeport, who has become one of the
Busang saga's main characters, also said his company still cannot
find any gold after further testing of rock taken from the seven
holes it drilled on the property in East Kalimantan, Indonesia.
Bre-X Minerals Ltd. believes Busang contains at least 71 million
ounces of gold. Freeport agreed earlier this year to become operator
and 15% owner of a Busang mine, but only if the project can be shown
to be economically feasible.
Later this week, Strathcona Mineral Services Ltd., a consulting
firm hired by Bre-X, is expected to hand over to Bre-X the results
of a month-long ``audit'' of Busang's mineral content. The report is
expected to answer the mystery's central question: is there or is
there not enough gold there to build a mine?
If Freeport has any doubts about its discovery of only
``insignificant'' quantities of gold in the seven holes it drilled,
none was evident yesterday at the annual meeting.
Several times, Moffett repeated his company's vow to walk away from
its agreement with Bre-X if Busang can't be proved to be
economically worthwhile.
``We will participate only if we can confirm an economic deposit,''
[Back] 86 FN 30-Apr-97 at 06:06:00 14:39 Page 4
Moffett said. ``If not, we will withdraw.''
In that event, ``Bre-X can find another partner or go forward by
itself.
``The determination will be made by Freeport only, and others will
make their own determinations.''
Moffett said Freeport's seven holes were drilled across ``several
thousand acres of mineralization'' in the area of the discovery
known as Busang II, long depicted by Bre-X as home to most of
Busang's gold.
Craig Saporito, Freeport's vice-president of investor relations,
said further testing of rock cores from the seven holes after the
company's dramatic March 26 press release had failed to turn up any
gold.
``We've continued to analyse those cores and do some additional
testing, and the results haven't changed. We certainly stand by the
results we've released to the press.''
Freeport has not drilled new holes beyond the original seven, he
added.
In its audit, Strathcona has drilled six more holes.
``We are hoping the additional drilling will shed light on the
situation,'' Moffett said.
Freeport's due diligence review has been ``preliminary and
inconclusive, but we have not been able to confirm Bre-X's
[Back] 86 FN 30-Apr-97 at 06:06:00 14:40 Page 6
mineralization.''
Moffett's remarks were made during a brief address to shareholders.
The annual meeting itself was strictly controlled by Freeport
officials.
In addition to the Busang controversy, the company faces persistent
criticism of its environmental and human rights record at its
Grasberg copper-gold mine in Irian Jaya, also in Indonesia.
Reporters were not allowed into the meeting and had to watch the
proceedings on closed-circuit television in a separate room in
Freeport's headquarters.
Company officials said this was because of lack of space in the
[Back] 86 FN 30-Apr-97 at 06:06:00 14:40 Page 7
meeting room, although only 11 reporters were present and some
people attending the meeting said there were numerous empty seats.
As for shareholders, their questions were only permitted if they
concerned one of the three items on the agenda.
In a brief question-and-answer period, questions were limited to 60
seconds and had to be about one of the three agenda items.
A man who tried to query Moffett on his US$33.7-million pay package
was told to stop or be escorted out of the meeting.
``I want you to sit down or I'll ask you to leave,'' Moffett said.
``You are not going to address things that are not part of the
business of this meeting.''
End of News |
