Bre-X Minerals - Says Never Owned 90% Of Busang (Dow Jones)
TORONTO (Dow Jones) During the conference call, David Walsh, Bre-X Minerals Ltd.'s (BXNMF) president, chairman and chief executive, said it was a mistake for shareholders to assume that Bre-X owned 90% of Busang II, which contrasts with several early press reports of the company's claims about its ownership.
''Some have mistakenly thought that we somehow owned 90% of this property, but this was never the practical reality, nor was it ever the basis (for the value of) Bre-X's stock. It was always envisioned that we would share in the owership with local interests and a development partner,'' Walsh said.
''The political reality is that Busang is of national importance to Indonesia, The authorities have always made clear that mineral sources belong to the people,'' he said.
Walsh said it was unrealistic for the market to expect Bre-X to receive payment for a portion of Busang that Indonesia believed belonged to it by right.
As reported, Freeport-McMoRan Copper & Gold Inc. (FCX) won't pay Bre-X any upfront cash for its 15% stake in the property. Bre-X holds 45% of the project under the joint venture pact, and the Indonesian partners hold 40%.
''It is certainly the case in the real world that this was the only deal which was available to Bre-X,'' said Leslie Morrison of J.P. Morgan Securities Inc. Bre-X's financial adviser.
Furthermore, ''it is our belief'' that this deal provides comparable value to the Barrick Gold Corp. (ABX) proposal, Morrison said. Barrick proposed a plan that would have allocated a 67.5% stake in Busang to Barrick, 22.5% to Bre-X and 10% to the Indonesia government. Placer Dome Inc. (PDG) proposed a share swap between Placer and Bre-X.
''Some of the previous deals, in particular the Barrick one, were so complex that there's cause for different opinions as to what it was worth,'' Morrison said.
Copyright Dow Jones News 1997
IMO this is spin doctoring of the worst kind. If BXM didn't feel that they had any prospect of keeping the 90% ownership then Walsh should have mentioned this to the dozen or so analysts who have written reposts on this company in the last year. |
