Freeport deal with Bre-X not yet sealed
Freeport deal with Bre-X not yet sealed
TORONTO (Reuter): Reports that Bre-X Minerals Ltd has reached an agreement with its Indonesian partners and Freeport-McMoRan Copper and Gold Inc are probably premature, said a well-informed Canadian mining analyst.
"As far as I know, there is no signed deal with any major company as we speak," Chad Williams with Research Capital Corp in Montreal told Reuters.
"I'm told that they have not yet defined a partner."
Published reports said on Friday that Bre-X signed a memorandum of understanding with its Indonesian partners and Freeport to develop the vast Busang gold find in Indonesia.
"It might just dictate the process," Williams said.
He said the reports about Freeport probably contain some truth, "but we should be cautious as to how we interpret the numbers," he added.
One news report said under the deal, Bre-X would retain a 45 percent interest in the deposit, with Indonesian interests getting 40 percent and Freeport taking 15 percent and operating the mine.
A spokesman for Barrick would not confirm or deny the reports that Barrick had been cut out of the running for Bre-X and Busang.
"It's in the hands of the (Indonesian) government," said the Barrick spokesman, Vince Borg. "The government will decide on that."
He said he knew of no agreements being signed and dismissed news reports to the contrary as "speculative".
A spokeswoman for Freeport on Friday declined comment on the rumors, but said the company would make an announcement in Jakarta next week. She would not elaborate.
A spokesman for Placer Dome Inc said the Vancouver-based company has no knowledge of Freeport's involvement. Placer Dome also has proposed a plan for Busang.
"We haven't been told anything," said Placer spokesman Hugh Leggatt. "It's hard to know what kind of credibility to place on (the reports of a deal)."
Teck Corp, which has shown interest in Busang in the past, said it did not know of any deals either.
"As far as I can see it's still foggy, but the fog should lift next week. There's now a third foghorn out there," said Teck Corp president Norman Keevil.
Asked if the third player might be Freeport, he replied: "I don't know who is blowing their horn out there but it appears that Freeport may be in the game. I had thought they weren't but who knows?"
Freeport
Meanwhile, Freeport's spokeswoman Kisten Lemkau in a phone interview from New Orleans said "We have no information we can share with you at this time." She would not deny or confirm the rumors.
"The concern right now in the marketplace is that Bre-X is nailed to the wall," one gold analyst said.
"We don't know if it's a good deal for Bre-X. We don't know the terms. We don't know if it's true. We just have no idea."
Bre-X shares dropped C$1.50 to C$23.15 with 2.3 million shares trading hands in the first hour of trading. Barrick was down C$1.15 to C$35.50 on the Toronto Stock Exchange. In New York, the stock was off 5/8 to US$26 3/8.
Placer Dome was up C$0.25 to C$28.25 in light trading. In New York, Placer was up 1/4 to US$20 7/8.
Freeport was halted after it gained US$1-1/4 to 30-1/2 in volume of 178,500 in New York.
Freeport controls the Grasberg gold mine in Indonesia, known as the world's largest gold deposit. RTZ-CRA has a 12 percent stake in Freeport.
Freeport also has links to Mohamad "Bob" Hasan, a close associate of President Soeharto and a major local partner of Bre- X in Indonesia.
Indonesia's Mines and Energy Minister said on Friday that he had discussed Busang with the president and there was a possibility of seeking tenders to develop the site if Bre-X and Barrick fail to agree.
"There is time, but if they fail, we will find a way that most benefits the country," Minister I.B. Sudjana told reporters. "One option is a tender...it could be an international tender. Until now, I have not got a report from them. We must be patient, there is time," Sudjana said.