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Gold/Mining/Energy : BRE-X, Indonesia, Ashanti Goldfields, Strong Companies. -- Ignore unavailable to you. Want to Upgrade?

To: alan holman who wrote (28154)	7/18/1999 1:51:00 PM
From: alan holman	Read Replies (1) \| Respond to of 28369

The Bre-X Saga: Fortune or Folly? Bre-X shareholders sue investment houses Tuesday 29 July 1997 Vicki Barnett and Paul Brent, Calgary Herald; Bloomberg Bre-X Minerals Ltd. shareholders in Alberta and B.C. are participating in a lawsuit against three investment houses, including Nesbitt Burns Inc., over their connection to Bre-X's Busang deposit in Indonesia. The deposit was revealed in March as the world's biggest gold mining fraud. The lawsuit, filed last week in U.S. District Court in Texarkana, Texas, consolidates nine existing U.S. class action lawsuits and a Canadian lawsuit and also names investment bankers Lehman Brothers Inc., J.P. Morgan & Co, Bre-X Minerals Ltd. management and their mining consultant, SNC-Lavalin Group Inc.'s Kilborn subsidiary. Vancouver lawyer David Klein, who is working with Calgary lawyer Clint Docken on a western Canadian class action, said Monday that the lawsuit has been filed, but a judge hasn't made a decision on whether the lawsuit can proceed, or whether Canadians can participate. "We haven't abandoned the Canadian lawsuit," Klein said. Docken said the best option is for Canadians to become part of the U.S. class action "because we have an easier time proving our case there, and damages are higher." If Canadians aren't allowed to participate in the U.S. lawsuit, the second-best option is a Canadian class action filed in B.C. or Ontario, with the final choice being an Alberta group action because there's no class-action legislation here, he said. "We'll be seeking leave to file here (in Calgary Court of Queen's Bench) Sept. 16," Docken said. Klein said he anticipates an Ontario class action will also join the U.S. lawsuit. A proposed Quebec lawsuit hasn't yet been filed. The investment banks were added to the lawsuit because their bullish recommendations helped Bre-X, a Calgary-based exploration company, attain a stock market capitalization of $6 billion Cdn, a lawyer associated with the suit said Monday. "Those companies are reputable and they gave a tremendous amount of credibility (to Bre-X). Representatives of those companies stated that they had done research and analysis into Busang," said Thomas Ajamie, a lawyer in Houston. The lawsuit could also be broadened to include other brokerage houses from the 15 or 20 analysts who toured the Indonesian site. "We are considering that, we are looking at those and deciding what to do," said Ajamie. "We have to review their conduct first." J.P. Morgan officials consulted Bre-X regarding a joint-venture agreement with Freeport-McMoRan Copper & Gold Inc. to develop a mine at Busang in Indonesia. Lehman released a 50-page report about Busang on Dec. 3, 1996, describing Busang as "the gold discovery of the century" and rating Bre-X shares a "buy." Nesbitt Burns, one of Canada's largest brokerage firms, was one of the first to research and recommend Bre-X. Toronto-based Nesbitt also faces a lawsuit brought forward by a Windsor, Ont., lawyer claiming it misled investors about Bre-X's viability. Nesbitt, owned by the Bank of Montreal, has said the lawsuit is unfounded. Officials at J.P. Morgan, Lehman and Nesbitt refused to comment Monday. Canada's brokerage industry has come under intense criticism for recommending Bre-X right up until March 26, when Freeport-McMoRan said the world's supposed-biggest gold find in Indonesia contained virtually no gold. Shares of the company, which were once valued at $280 apiece before a 10-for-1 stock split, are now delisted and worthless. - The issue: Bre-X Minerals Ltd. - What's new: Bre-X shareholders in Alberta and B.C. are participating in a lawsuit against three investment houses. - What's next: Judge's decision on whether suit can proceed or whether Canadians can participate. We welcome your suggestions; send e-mail to online@theherald.southam.ca This web site is a supplement to the Calgary Herald