Bre-X Minerals says it can sell Busang stake

Bre-X Minerals says it can sell Busang stake

CALGARY (Reuter): Bre-X Minerals Ltd confirmed on Wednesday it
has the right to sell its 45 percent holding in the rich Busang
gold deposit in Indonesia without offering a right of first
refusal to its Indonesian partners.

"Bre-X's 45 percent interest in Busang Indonesian Gold JV is
held by wholly owned Dutch subsidiaries. Bre-X is free to sell
its Dutch subsidiaries without a right of first refusal," Bre-X
president and chief executive David Walsh said in a statement to
shareholders.

"However, there is no plan for such a sale," he added.

Walsh said Bre-X remains committed to Bre-X's joint venture
partners and the project.

"Based on the latest resource calculations, the Busang
property contains at least 70.95 million ounces of gold -- making
it the largest and richest gold mine in the world. At today's
price of approximately US$350 an ounce, the Busang property has a
gross economic value of $24.8 billion," Walsh said.

He added that production costs in Indonesia are estimated to
be roughly $75 to $95 an ounce as compared with $200 an ounce as
a world average.

"Based on Bre-X's 45 percent ownership, the company's
currently estimated gross economic value in the property is $11.2
billion. While we are confident that this figure could be
substantially higher, any such estimate is based on potential and
remains speculative," Walsh said.

Walsh said the final joint venture agreement reached, which
awarded 15 percent of the property to Freeport-McMoRan Copper &
Gold, 45 percent to Bre-X and 40 percent to Indonesian interests,
reflected the political, economic and social environment in
Indonesia.

"In the months leading up to the final agreement, various
third parties conducted negotiations with the Indonesian
authorities, from which Bre-X was excluded, which introduced a
percentage ownership mind-set that significantly reduced our
ultimate negotiating leverage," Walsh said.

"Even though we discovered the gold fields of Busang, they are
of such extraordinary richness that the final deal had to include
a 40 percent share for Indonesians to be competitive with the
offers put forth by other major mining entities and to satisfy
domestic political requirements," he added.

Walsh said Freeport, chosen by Mohamad "Bob" Hasan, was an
excellent choice for the large, experienced partner in Busang for
which Bre-X had long acknowledged a need.

Walsh also addressed a newspaper report that he pulled profit
from his Bre-X shares at a crucial time.

He said at one stage last year, a false news report said that
Bre-X's ownership in Busang was at risk, because of the
revocation of a SIPP (preliminary survey permit) on August 15,
1996. The stock fell to C$17.

"The report in question neglected to include the fact that
Bre-X's ownership and exploration rights were fully protected by
virtue of the outstanding KP's (mining authorizations) which
supersede the legal status of the SIPPs," Walsh said.

"Prior to this report, I made a decision to sell approximately
three percent of my Bre-X position for personal reasons. I retain
97 percent of my Bre-X stock and remain the company's single
largest shareholder. My desire to attain full value for Bre-X's
stake in the Busang deposit is, and will remain aligned, with
other Bre-X shareholders," Walsh added.