Thursday, April 17, 1997
Busang has gold: Friedland
By SANDRA RUBIN
The Financial Post
Besieged Bre-X Minerals Ltd. was hit with another U.S. class-action lawsuit yesterday but a European suit has been put on hold.
Edinburgh-based Waverly Mining Finance, which sold the Calgary-based exploration company the Busang site, said it will wait for the dust to settle before
deciding whether to proceed with its case.
Waverly's 49% Australian-owned subsidiary, Montague Gold, has been flirting with the idea of a lawsuit for months on the grounds it was "conned" out of its rights
to Busang in 1993.
Montague sold its Busang site just before Bre-X discovered what was until recently thought to be one of the world's richest gold finds.
Even as the legal ramifications continue to hit, a key Canadian businessman insisted yesterday there is gold in the Busang strike.
Robert Friedland, chairman of Indochina Goldfields Ltd., said he's convinced there is gold despite serious questions that have been raised in recent weeks.
"I would be astonished if there wasn't a significant deposit there," said Friedland, who was voted Canada's mining developer of the year in 1996. He rocketed to
fame when his Diamond Field Resources Inc. discovered the massive Voisey's Bay nickel find in Labrador.
A gold salting fraud at Busang would be "an exquisitely difficult thing to achieve -- an amazing accomplishment," he told Bloomberg news service.
Friedland said it's premature to comment on whether Indochina, which is exploring an area next to Busang, is interested in investing in Bre-X. But he insisted he's
confident his company will be able to mine gold in its nearby exploration site.
Meanwhile, Bre-X issued a statement yesterday acknowledging it is facing seven lawsuits in the U.S. from unhappy investors who charge there was a fraud.
"The complaints allege that Bre-X statements to the public about the size and nature of the gold deposits at the Busang project have been materially false," the
statement said.
"The complaints also allege that the statements were made with the intention of deceiving members of the investing public and with the intention that the price of
Bre-X shares would rise, making it possible for insiders at the company . . . to profit."
Bre-X shares (bxm/tSE) plunged to $2.50 from $15.50 in less than 24 hours last month on suspicion the Busang find could be a bust. Yesterday, Bre-X shares fell
6› to $2.17.
Bre-X's statement summing up the lawsuits was made to appease securities regulators, a spokesman said.
In Manila, a medical examiner said a second autopsy on the body believed to be Bre-X geologist Michael de Guzman has so far failed to result in a positive
identification. De Guzman, 41, is alleged to have taken a suicide plunge from a helicopter days before news that the Busang strike might have been grossly
overstated. Dr. Albert Reyes said he hadn't been able to compare dental or fingerprint records.
-- with files from Dow Jones |
