Canadian firms aims to reveal Busang gold

Canadian firms aims to reveal Busang gold

TORONTO (Reuter): While the Busang gold controversy panics
investors and crashes trading computers, a tiny Canadian
consulting firm is quietly working to answer a crucial question
-- Is the gold there?

Strathcona Mineral Services Ltd. is maintaining a strict
silence as it performs a critical audit of Bre-X Minerals Ltd's
gold project in the jungles of Indonesia.

The company is shunning interview requests, but analysts and
industry rivals said Strathcona had a solid reputation and was
expected to provide at least some answers that may help resolve
some of the confusion around Busang.

"We wouldn't touch it (Bre-X) until we have more information
from Strathcona. Strathcona are the referee here. We would want
to see something from Strathcona before we change our opinion,"
Yorkton Securities analyst Doug Leishman told Reuters on Tuesday.

Bre-X hired Strathcona two weeks ago as rumors swirled around
the Busang discovery, heralded as the richest gold find of the
century.

The story broke on March 26 when Bre-X said it was advised by
Strathcona that "there appears to be a strong possibility that
the potential gold resources on the Busang project...have been
overstated because of invalid samples and assaying of those
samples."

Strathcona is currently performing a detailed audit of
drilling, sampling and assaying of the Busang project, which is
expected to take four weeks.

"Their engineers are very conservative and in our
opinion ...they will determine the accurate gold content of the
samples that they find. They have a very good reputation within
the industry," Leishman said.

Privately owned Strathcona was founded by President Graham
Farquharson, a veteran mining engineer who is currently in
Indonesia. The company's six employees work out of a small office
on a side street in Toronto's financial district.

Aside from consulting, Strathcona has managed mining projects,
including a zinc/silver project on Canada's Baffin Island in the
Northwest Territories.

"They are tough, but fair competitors. I know Farquharson
reasonably well," said Stan Bharti, president of William
Resources Inc [WIM.TO], which owns a competing mining consulting
company, BLM Service Group.

Meanwhile, Bre-X said on Tuesday it needed more time to study
a detailed report from engineering firm Kilborn SNC Lavalin on a
check assay program at the Busang site.

"This report is an extensive document which requires a more
thorough review by Bre-X's technical team than initially
anticipated," Bre-X said in a statement.

The Canadian exploration firm said it intended to conduct a
detailed analysis of this report and correlate the relevant data"
with Strathcona's findings. It did not say when the Kilborn
report would be released to the public.

Kilborn has said its latest resources calculations showed the
Busang project contained 70.95 million ounces of gold. But its
conclusions depended on the validity of samples and assays
provided to the company by Bre-X.

Bre-X has denied any tampering with the samples and said that
its claims for Busang would be vindicated.