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)