Hang on to your hats and your shares everyone.
Attached is the Bre-X news release. Don't let this cause you to sell CLL.
_______________________________________________________________________
Attention Business/Financial Editors:
BRE-X MINERALS LTD.
CALGARY, May 4 /CNW/ - BRE-X MINERALS LTD., (T-BXM, ME-BXM,
NASDAQ-BXMNF) a member of the BRE-X Minerals Group of Companies, announced
that it has received today an interim report from Strathcona Mineral Services
Limited. This independent technical audit was commissioned because of the
Company's determination to account for the variance of data generated by
Freeport-McMoRan Copper & Gold Inc. (NYSE-FCX) during its due diligence
activities with respect to the Busang project. Bre-X is committed to
expeditiously implement the recommendations contained in the interim report.
A copy of the cover letter from Strathcona and the executive summary of the
report form part of this release. Copies of the full report have been
provided to securities regulatory authorities to be placed on the public file.
Chairman and Chief Executive Officer David G. Walsh said: ``Bre-X is
devastated that the Strathcona analysis does not confirm earlier analytical
work done by Bre-X. The report instead indicates that the Company's belief
about the size of the Busang II reserve was based on falsified data.''
The Strathcona report is an interim report and Bre-X has asked
Strathcona to remain as part of the investigative process. In addition, Bre-X
said it is informing all of the appropriate authorities of the results of the
above-mentioned report.
The Company has also retained legal, accounting and investigative
personnel, including Price Waterhouse and Forensic Investigative Associates
Inc., who were retained to work with Strathcona in determining how, in the
face of the Strathcona report, the data on which Bre-X relied in its prior
public statements about Busang could have been generated. Bre-X has
instructed that the investigation be prompt and thorough and be directed
wherever the professional advisors think it should go. Bre-X has asked for
final reports and has received commitments for their delivery as soon as
feasibly possible.
These reports will be made available to all of the above-mentioned
authorities and Bre-X will continue to cooperate fully, as it has to date,
with all regulatory inquiries it receives. ``We share the shock and dismay of
our shareholders and others that the gold we thought we had at Busang now
appears not to be there,'' Mr. Walsh said. ``We have spent millions of dollars
in the strong belief that a sizable deposit existed and have directed all our
efforts towards development of the project. It is paramount for us to
redirect our energy to protecting the company's remaining assets for the
benefit of the shareholders. We are determined to gain a full understanding
for the shareholders, for Bre-X's business partners and for others, of how the
earlier data came to exist and whether any of the properties in which the
Bre-X Group of Companies has an interest contain an economically viable
deposit.''
On Behalf of the Board
David G. Walsh
Chairman, President & Chief Executive Officer
Strathcona Mineral Services Limited
12th Floor, 20 Toronto Street, Toronto, Ontario, Canada M5C 2B8
May 3, 1997
CONFIDENTIAL
Mr. David Walsh
President and Chief Executive Officer
Bre-X Minerals Ltd.
119 - 114 Street NW
Calgary, AB T2N 1Z6
Dear Mr. Walsh:
Busang Technical Audit - Interim Report
Enclosed is our report covering that portion of the technical audit of
work on the Busang property that we have completed to date including the very
conclusive assay results from 175 core samples. We very much regret having to
express the firm opinion that an economic gold deposit has not been identified
in the Southeast Zone of the Busang property, and is unlikely to be.
We realize that the conclusions reached in this interim report will be a
great disappointment to the many investors, employees, suppliers and the
joint-venture partners associated with Bre-X, to the Government of Indonesia,
and to the mining industry everywhere. However, the magnitude of the
tampering with core samples that we believe has occurred and resulting
falsification of assay values at Busang, is of a scale and over a period of
time and with a precision that, to our knowledge, is without precedent in the
history of mining anywhere in the world.
Yours sincerely,
G. Farquharson
Summary
The Busang property in the Province of Kalimantan in Indonesia has been
under exploration by Bre-X Minerals Ltd. (Bre-X) with core drilling results
since mid-1995 on the Southeast Zone of the property giving rise to
expectations that the Busang property could host one of the largest single
gold deposits ever discovered. In February 1997, Freeport McMoRan Copper &
Gold Inc. (Freeport) commenced a due diligence program prior to becoming a
participant in the further development of the Busang property. The Freeport
program included core drilling and in mid March, Freeport advised Bre-X that
gold values comparable to those from the Bre-X drilling were not being
realized.
As a consequence, Strathcona Mineral Services Limited (Strathcona) was
engaged by Bre-X to carry out a technical audit of the work done by both Bre-X
and Freeport. As part of that technical audit, we have completed a closely
supervised six-hole core drilling program with 1470 metres drilled. Because
of the intense interest in the Busang property and the consequences for many
parties arising from any conclusions reached in our audit, we have made the
decision to select an initial 350 metres of core for assaying that would allow
us to issue an interim report on our findings, rather than wait for several
more weeks before all core has been assayed and all investigations completed.
The 350 metres of core and the resulting 175 samples were selected so as
to provide the best chance of confirming the presence of gold as indicated by
the Bre-X core samples. The sample treatment procedures and assaying were
carried out at laboratories in Australia, Indonesia and Canada, with all
results received just prior to our issuing this interim report. The assay
results have been quite conclusive, and along with work done by Freeport,
results from recent drill core samples submitted by Bre-X, and other
investigations and observations we have made, we are able to express without
reservation the following opinions and conclusions concerning the main area of
interest on the Busang property, the Southeast Zone I South, and to which we
anticipate no changes in our final report when all the drill core from our
audit program will have been assayed.
1. Only trace amounts of gold have been found in the samples assayed,
and there were no samples that gave gold values of economic interest.
2. As a consequence, we believe there to be virtually no possibility of
an economic gold deposit in the Southeast Zone I South of the Busang
property.
3. The assaying of the samples from the Busang property submitted by
Bre-X to Indo Assay Laboratories in Balikpapan, Indonesia has been of
a good standard, and the gold values reported have reflected the gold
in the samples delivered to the laboratory.
4. The due diligence program conducted by Freeport has been very
thorough and of a high professional standard in all respects.
5. The gold recovered in samples submitted by Bre-X has originated from
a source other than the Southeast Zone of the Busang property and has
resulted in falsification and misrepresentation of many thousands of
samples with consequent and subsequent erroneous estimates of gold
resources.
We therefore make the following recommendations to the Board of Directors
and management of Bre-X Minerals:
1. Those authorized and qualified to carry out investigations into the
fraudulent activities that we believe to have occurred should be
contacted immediately and requested to pursue the matters that we are
bringing to the attention of Bre-X and any other parties concerned.
We are ready to assist in whatever manner we can in carrying out
these investigations.
2. All core and samples that have not yet been assayed and all
documentation pertaining to the Busang property should be placed
under tight security until the investigations recommended are
completed.
3. All exploration work on the Southeast Zone at the Busang property
should cease immediately.
Unless we receive further instructions to the contrary, we shall continue
with the completion of our audit program although we do not feel it necessary
that assaying of the remaining core samples be carried out at all three
laboratories.
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For further information: David G. Walsh, Chairman, President and Chief Executive Officer, Bre-X Minerals Ltd., (403) 543-7070
BRE-X MINERALS LTD. has 64 releases in this database.
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