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.