Bre-X expects to resolve Busang issues

Bre-X expects to resolve Busang issues

CALGARY, CANADA (Reuter): Bre-X Minerals Ltd said that it has
been told by a law firm advising it that the claims of one of its
Indonesian partners to a 10 percent participation in Busang II
and Busang III are without merit.

This partner has a 10 percent stake in Busang I and believes
it is entitled to a similar stake in Busang II and Busang III,
the Toronto Globe and Mail reported over the weekend.

"This law firm has advised Bre-X that the assertion by the
Indonesian partner is without substance. Bre-X has held
discussions with senior Indonesian Government officials in
relation to this matter," Bre-X said in a statement.

Bre-X representatives have also met with those from the
Indonesian partner, but Bre-X said the partner failed to provide
pertinent information and documents requested, all of which pre-
dated Bre-X's acquisition of its stake in Busang I.

Bre-X said the Indonesian partner has requested that this
issue be resolved by discussion and negotiation.

"Bre-X believes it will shortly resolve all outstanding issues
relating to the Busang project and remains confident that the
Indonesian government will proceed with the issuance of COWs
(contracts of work) for Busang II and III," said David Walsh,
president and chief executive in a statement.

Bre-X said the newspaper report added that Jean Anes, the
vice-consul for investments with the Indonesian Consulate General
in Toronto, said the Indonesian government was investigating a
claim made by this partner in Busang I that BRE-X breached the
COW relating to the property by failing to get the approval of
the appropriate Indonesian government authorities when it
acquired its 80 percent stake in PT WAM, the Indonesian company
that holds the COW for Busang I.

Bre-X said although it was generally not company policy to
comment on reports in the financial press, it felt compelled to
make a statement about the Globe and Mail article.

The Busang Gold Project consists of the central zone, Busang
I, the southeast zone Busang II and the northwest zone Busang
III.

A COW was issued in relation to Busang I in 1987 to PT
Westralian Atan Minerals (PT WAM), in which a stake was acquired
by Bre-X. Bre-X became the project manager of Busang I in 1993.

Bre-X said the resource calculation of Busang I stood at about
three million ounces of gold. The resource calculation to date
for the entire Busang gold project is approximately 47 million
ounces of gold.