Emerging Busang tale stuns Aussie mine experts<\/p>\n
SYDNEY (Reuter): Indications that Indonesia's Busang gold lode
\nmay contain much less gold than investors were led to believe has
\nstunned Australian mining experts.<\/p>\n
The assaying techniques used to calculate the level of known
\nreserves have come into question as has the ability to expand the
\nreserve base over a relatively short period.<\/p>\n
\"There were very serious claims about the size of the deposit
\nbeing made in a very short timeframe,\" a senior gold mining
\nexecutive with experience in the Kalimantan region of Indonesia,
\nnow employed in Ghana, said on Thursday.<\/p>\n
Still, failure of Busang to live up to expectations as one of
\nthe world's largest untapped gold mines would be hard to fathom,
\nthe executive added.<\/p>\n
\"Our big query was that they never turned the (exploration)
\nrigs,\" said Keith Goode, mining analyst for Bell Securities Ltd.
\n\"They always drilled in one direction, southwest,\" he said.<\/p>\n
Experts point to the danger in such procedures in that a miner
\ncan end up drilling only in a line of gold mineralization
\nproviding a less accurate read of the size of the deposit.<\/p>\n
\"If you draw the picture only in right angles, you only find
\nout what's happening on a right angle,\" Goode said.<\/p>\n
On Feb. 17, Canadian prospector Bre-X Minerals Ltd issued a
\nstatement estimating gold reserves at Busang at nearly 71 million
\nounces.<\/p>\n
Trading in Bre-X shares were halted on Wednesday by the
\nToronto Stock Exchange. They last traded at C$15.50.<\/p>\n
Freeport McMoRan Copper & Gold Inc., Bre-X's partner in
\nBusang, said that analyses of its own drilling results so far
\n\"indicate insignificant amounts of gold.\"<\/p>\n
While such a revelation from an experienced miner such as
\nFreeport, which has a long history in mining the rich copper and
\ngold deposits of Irian Jaya province is surprising enough, in
\nhindsight there were signals something may be astray.<\/p>\n
But it may not only be the partners in Busang that suffer.<\/p>\n
\"Any Indonesian exploration company is being valued based on
\nits location relative to Busang,\" said Aaron Colleran, an analyst
\nfor stockbrokers Eyres Reed Ltd.<\/p>\n
A number of Canadian exploration companies are in this
\ncategory, he said.<\/p>\n
In Australia, the fallout in Bre-X is taking its toll on
\nperipheral Busang player Golden Valley Mines. Golden Valley has a
\ntechnical and financial agreement with Indonesian company PT
\nKrueng Gasui (KG), controlled by businessman Joseph Merukh.<\/p>\n
KG owns an undisputed 10 percent stake in the Muara Atan
\nContract of Work, which contains part of the Busang deposit.<\/p>\n
Golden Valley shares lost 16 cents on Thursday to close at 72
\ncents.<\/p>\n
Golden Valley company secretary Chris Ferrier noted that it
\ndoes not have an interest in the Busang 2 project, where Freeport
\nhas carried out core drilling that led to its concern.<\/p>\n
However, Golden Valley has written to Bre-X, as operator of
\nMuara Atan, to verify resources published regarding the central
\nzone of Muara Atan.<\/p>\n
\"The company also will closely monitor the position at Busang
\nII with regard to its potential impact on PT Kreung Gasui's
\ncontinuing submissions to the Indonesian government and its
\nCanadian court proceedings,\" Ferrier said in a statement.<\/p>\n
Merukh claims another 10 percent interest through PT Sungai
\nAtan Perdana and an option for a further 20 percent of Busang.<\/p>\n
KG filed a C$2 billion lawsuit on January 15 in Canada against
\nBre-X to reinforce its claim to the deposit.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/emerging-busang-tale-stuns-aussie-mine-experts-1447893297",
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