Bre-X in meetings to resolve Busang dispute

Bre-X in meetings to resolve Busang dispute

TORONTO (Reuter): Bre-X Minerals Ltd executives have been meeting in Toronto in an attempt to clear up questions over the ownership of its spectacular Busang gold discovery in Indonesia, a Bre-X spokesman said.

Company president David Walsh and chief financial officer Rolando Francisco were "in Toronto resolving the problem," the spokesman said over the weekend.

Company officials would not say whether they were making progress.

Bre-X stock rose C$1.80 in morning trading to C$21.70, with more than four million shares changing hands.

The stock has taken a beating in the past week since news of the ownership dispute became public. Bre-X was trading at C$26.90 before the news broke.

One of Bre-X's Indonesian partners is claiming up to 40 percent of the Busang discovery. Australia's Golden Valley Mines NL is backing the Indonesian partner.

Bre-X has said the partner has a right to only 10 percent of part of the Bre-X property.

The Indonesian government has delayed issuing a vital contract of work to Bre-X until the parties settle their problems.

Shares in Golden Valley fell A$0.002 to A$0.051 in trading of 5.8 million shares on the Australian Stock Exchange on Friday.

Investors overreacted to the dispute, mining analyst Michael Fowler of brokerage Levesque Beaubien Geoffrion said in an interview.

"I think the stock has been punished over-severely based on all the hype coming from the media," Fowler said. "The reality is, it's not as bad as the media make it to be." He said he expects a negotiated settlement soon.

Fowler said he has seen nothing official to suggest the claims from Golden Valley and the Indonesian partner are credible.

"I would suggest they come with some of the documents," he said. "It's put-up or shut-up time."

But other analysts have said they do not think the blood letting is over yet.

Golden Valley told Reuters in Australia on Friday it was prepared to take Bre-X to court in Canada if necessary.

Golden Valley has no solid evidence, Bre-X spokesman Steve McAnulty said in an interview.

The Busang property promises to be one of the world's biggest gold discoveries, with almost 50 million ounces outlined so far. Analysts have suggested the property may contain up to 100 million ounces.