Golden Valley statement near on Busang

Golden Valley statement near on Busang

SYDNEY (Reuter): Australia's Golden Valley Mines NL is expected to break its public silence on the ownership dispute over the big Busang Indonesian gold discovery majority owned by Canada's Bre-X Minerals Ltd, a company official said yesterday.

Golden Valley managing director Warren Beckwith was last night flying from a round of talks in Indonesia to Australia.

An official of the Perth-based company said a press statement was in preparation and expected to be released on Beckwith's return.

This would be the first statement by Golden Valley since a week ago when it publicized details of a technical assistance agreement with Indonesian businessman Jusuf Merukh's PT Krueng Gasui for the Busang deposit, in Kalimantan.

While Bre-X shares fell sharply on the Toronto Stock Exchange on Wednesday, Golden Valley shares rose by 0.6 cents to 5.3 cents on solid turnover on the Australian Stock Exchange on Thursday. This put the shares well ahead of their year's low of 2.0 cents and nudging the year's high of 5.9 cents.

Bre-X on Tuesday described statements that Golden Valley was entitled to part of the big Busang gold discovery as "false and misleading".

Bre-X said it has asked the Australian Stock Exchange to ask Golden Valley to back up its claims.

According to Merukh, his interests own 40 percent of Busang.

This arises through a 20 percent stake in section one of the Busang property, which is divided into three sections, and an option to buy a further 20 percent.

Golden Valley said in its statement a week ago that it had a technical assistance and finance agreement with the Indonesian company, which had a call option over a further 20 percent in shares of the Bre-X subsidiary that controls the Busang deposit.

According to Merukh, Golden Valley will receive a royalty, not a share in the property, from the technical assistance agreement. The royalty arrangement was under discussion, he said on Wednesday.

Meanwhile, the Indonesian government has delayed issuing a contract of work for Bre-X to continue its work on the property until the dispute is resolved.

Bre-X has estimated gold reserves in the deposit total at least 47 million ounces.