Former Bre-X chief 'unaware of tampering'

Former Bre-X chief 'unaware of tampering'

TORONTO (Reuter): Bre-X Minerals Ltd.'s former exploration chief said Friday he was unaware of and did not participate in any tampering with gold samples at Bre-X's now-worthless Busang deposit in Indonesia.

Former exploration head John Felderhof also said in a statement from his home in the Cayman Islands that he still believes "there is a significant amount of gold at Busang."

Felderhof was named Canada's "Prospector of the Year" in March for his work in finding the Busang deposit, once touted as the century's biggest gold discovery.

But the project collapsed in May after an independent audit found insignificant amounts of gold in the property. The consultant said the Busang data had been falsified on an unprecedented scale.

Calgary, Alberta-based Bre-X's last official estimate for Busang was 71 million ounces, while Felderhof had said it could hold up to 200 million ounces.

Bre-X later filed for bankruptcy protection and ousted Felderhof. The company, whose once high-flying stock was delisted from Canadian stock exchanges and Nasdaq, faces a series of investor lawsuits.

Felderhof's statement came a few days after Bre-X's private investigators concluded that Michael de Guzman, the mining company's chief geologist, salted gold samples from the Busang deposit.

After conducting interviews in Indonesia, the investigators said de Guzman bought small amounts of gold from a Kalimantan tribesman and used it to salt core samples from the Busang site.

However, the investigators said others were involved in the tampering.

De Guzman died in an apparent suicide in March when he fell from a helicopter in Indonesia shortly before the fraud came to light.

Felderhof, who has been in virtual seclusion in the Caymans, has denied any wrongdoing in the Busang affair.

He said on Friday that he believed that the systems and personnel at Busang were adequate to detect tampering.

"I still find it very hard to believe that as a respected geologist, (de Guzman) tampered with Bre-X's core samples. If Mike was involved with tampering, to my knowledge this will be the first time that a professional geologist has ever been implicated in a tampering or salting scam," he said.

Felderhof said his belief there is gold in Busang "is based on the structure, geology, mineralogy and alteration, as well as my many years' experience in the Pacific Rim. There are still many unresolved issues to consider."

He reaffirmed his ignorance of the fraud, saying he still held Bre-X stock and had encouraged the project's partner, Freeport- McMoRan Copper & Gold Inc. to conduct testing and due diligence. Freeport later pulled out of Busang.

Felderhof said he was attempting to reschedule an interview with Bre-X's investigators and would continue to cooperate with regulators in Canada and the United States in the investigation of the fraud.