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Gold/Mining/Energy : Bre-X, What happens after Strathcona results?

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To: opalapril who wrote (17)5/4/1997 6:58:00 PM
From: Robert Dirks   of 31
 
Bre-X to seek more Busang tests - paper

Reuters Story - May 04, 1997 15:02

FINANCIAL GDM CA MET EMRG US GOL ID AU HOT MRG GB BMX FCX V%REUTER P%RTR
TORONTO, May 4 (Reuter) - Canadian gold prospector Bre-X
Minerals Ltd will argue on Monday that more tests are needed to
determine just how much gold is in the controversial Busang
find in Indonesia, a Canadian newspaper reported on Sunday.

The Calgary-based company is expected to release an
independent report by consultant Strathcona Mineral Services
Ltd on the Busang project on Monday.

Bre-X hired Strathcona in March to review the project after
doubts emerged at that time over what has been called the gold
find of the century.

"Bre-X will argue that what's now needed is a large bulk
sample from the Busang site for further testing," the Toronto
Star newspaper said in a report on Sunday which quoted an
unnamed source at Bre-X.

"Any mining company in our position would want further
testing," the source said.

A bulk sample would involve more extensive drilling,
sampling and assaying of the site. Strathcona's report is based
on samples from six holes drilled at Busang.

"Don't forget Bre-X drilled more than 300 holes for
testing. There should be another large bulk sample tested
before it's concluded we made a mistake," the source told the
newspaper.

The newspaper report also quoted mining analysts who said
the company's desire for further tests suggested the Strathcona
report is negative for Bre-X.

"Talk of a bulk sample suggests the independent test
results are going to show there's far less gold at the Busang
site than Bre-X had led investors to believe," Calgary-based
analyst Ted Carter said in the Star report.

A Bre-X spokesman said on Sunday the company had no comment
on the Star report.

Bre-X has estimated the Busang site contains about 71
million ounces of gold, potentially the world's richest gold
discovery.

But those claims were cast in doubt on March 26 when Busang
partner Freeport-McMoRan Copper and Gold Inc said its
preliminary due diligence tests found "insignificant" amounts
of gold.

After Freeport's announcement, panic selling of Bre-X
shares lopped almost C$3 billion from the company's stock
market value.

Bre-X's stock closed up C$0.19 at C$3.23 on the Toronto
Stock Exchange on Friday as investors placed their final bets
on whether the gold discovery is a bonanza or a bust.

Bre-X has said it will issue a press release on the
Strathcona report before North American financial markets open
on Monday.

Copyright 1997 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content is expressly prohibited without
the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance
thereon.

>>> MY COMMENTS

So here we go again, they (B-X) are already starting to backtrack.
Walsh has stated very clearly all along that he is sure they have the 71M ounces. They have always reported consistent grades in the B-X drilling so it should be very easy to show the 71M ounces with the
Strathconna audit --- that is if it's really there.
Looks to me like they are starting to dance sideways already.
Just what the junior markets need now, more uncertainty !!!!!
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