Askatindo ends Bre-X partnership

Askatindo ends Bre-X partnership

JAKARTA (JP): PT Askatindo Karya Mineral is withdrawing from
its partnership with Bre-X Minerals Ltd of Canada to develop the
Busang gold mine in East Kalimantan.

Company president Harsono said here yesterday that a formal
letter announcing the end to the joint venture had been sent to
Bre-X chairman David Walsh in Canada.

Askatindo's decision comes in the wake of recent findings by
consultant Strathcona Mineral Services Ltd. that initial
assessments of the mine's deposits, touted by Bre-X as the
richest find of the century, were falsified on a scale without
precedent in mining history.

Strathcona said it found evidence of tampering with Bre-X's
core samples from the Busang site.

Bre-X had claimed Busang contained about 71 million ounces of
gold.

Harsono said the government's decision to freeze all Bre-X
activities in Indonesia had also halted exploration in
Askatindo's mining concessions at Busang.

"We have suffered losses as a result," he said.

Askatindo, owned by H. Sjakareni and timber tycoon Muhammad
(Bob) Hasan, requested complete data on Bre-X's activities at its
mining concession in Busang.

Based on the joint venture agreement signed by the two firms
in September 1994, Bre-X has to foot all the costs of
exploration.

The Indonesian firm gave Bre-X a week to respond to its
letter.

Askatindo would consider pursuing legal action against Bre-X
if outstanding issues were not solved to its satisfaction,
Harsono said.

Ahmad Yani, a director of Askatindo, said he hoped the
government would allow his company to continue exploration in
Busang.

"We're very disappointed with the Bre-X action," he said. "We
hope the government's decision to freeze all activities of the
Canadian firm will be only temporary." (bnt)