Canadian regulators force data release, says Bre-X

Canadian regulators force data release, says Bre-X

CALGARY (Reuter): Securities regulators forced the release of disappointing preliminary results from tests at Bre-X Minerals Ltd's deposit in Indonesia, the head of the company said in a newspaper interview published on Sunday.

Bre-X Chief Executive David Walsh, interviewed by the Calgary Herald, did not apportion blame to prospective partner Freeport- McMoRan Copper & Gold Inc.

Freeport-McMoRan had said initial tests at seven holes showed there not to be enough gold at the Busang deposit to make a mine worthwhile, causing Bre-X's price to crash after a stellar performance.

"First of all, it wasn't Freeport's fault. It was a regulatory issue," Walsh was quoted as saying.

"Rumors started that the preliminary results were not comparable to Bre-X results and it had been their intention to complete their due diligence in full without disclosing, because you could have a (drilling) hole miss, as we've had.

"But because of the rumor that started, our shares started to decline. That prompted a call from the regulatory bodies, which prompted the preliminary release of the assay data that Freeport had, which as they've said in any correspondence, is preliminary and there's more work to be done."

Asked who pushed for it to be released, he said: "It was the Ontario Securities Commission on the Toronto Stock Exchange. I think it was an over-reaction...just based on the way we've drilled for the last three years.

"We don't issue hole-by-hole results and have wild gyrations in the market. Freeport completed a seven-hole program. We have no further results from that program than what's been announced from them."

Some defenders of Bre-X have speculated that the episode was manufactured to depress Bre-X's share price so a bigger mining company could buy it on the cheap.

Walsh reiterated his belief that Bre-X's gold numbers would hold up. The company had claimed the Busang deposit contained 71 million ounces of gold and some officials had said publicly it could hold up to 200 million ounces.

He said Freeport-McMoRan Chief Executive Jim Bob Moffett had phoned him with the initial news of the preliminary results.

Walsh said he thought this was three or four days before Michael de Guzman -- Bre-X's chief geologist at Busang -- plunged to his death from a helicopter in Indonesia. His death was on March 18.

"He was cordial but said that it was very preliminary, they hadn't completed their seven holes...in very preliminary stages...but stated that we all could have a problem," Walsh was quoted as saying.

"I wasn't concerned. I phoned John Felderhof (Bre-X head of exploration). John wasn't that concerned because it was too preliminary and neither was Mike de Guzman. It could have been any number of factors, the drilling, the lab..."

Since then the preliminary data was released, he has not had an update from Freeport-McMoRan, he said.

"I've talked to him (Moffett) off and on. There's not much to talk about until the final analysis and as I said I haven't received an update on their work since what's been announced," Walsh said.

"And I don't think I want to...because it would end up piecemeal again. I'd have some information that wasn't generally in the public domain. I'm satisfied just to wait until the end of the month and get the whole picture at once."