Bre-X Minerals set to cash in on RI gold find

Bre-X Minerals set to cash in on RI gold find

HONG KONG (Reuter): Canada's Bre-X Minerals Ltd may become one of the world's largest gold companies after the discovery of the Busang gold deposit in Indonesia, the firm's exploration manager Michael T. Guzman said.

Guzman, speaking at an Asian Gold Congress in Hong Kong Tuesday, said the find in East Kalimantan on Borneo island could also push Indonesia into the ranks of the world's top five gold producers.

As of July this year, data gathered by the company showed Busang contained total gold resources of 46.92 million ounces, or 29.4 percent of Indonesia's total resources, making it the second largest gold deposit in the country, Guzman said, adding that the company's evaluations are still underway.

Bre-X Minerals aimed to start open pit mining at Busang in the fourth quarter of the year 2000 with an annual gold production capacity of two million ounces, Guzman said.

Preliminary data indicated up to US$1 billion of capitalization was needed to get the mine into production, he told the conference.

Bre-X owns majority interests at three contiguous Contract of Work (government allocated mining right) areas in East Kalimantan, with minority stakes held by Indonesian joint venture partners, he said.

The Busang mine is located in rugged mountainous terrain, 160 km (99 miles) northwest of Samarinda, the capital of East Kalimantan.

"Regular access to the area is by boat through the Mahakam River to Long Tesak village and onward along a gravel surfaced road 33 km (20 miles) to the site base camp," Guzman said.

Indonesia's largest gold mine is Grasberg, in the eastern province of Irian Jaya, which is owned by U.S. Freeport-McMoRan Copper & Gold Inc, with 82.3 million ounces, or 51.8 percent of the country's gold resources.