Krueng to pursue stake in Busang

Krueng to pursue stake in Busang

JAKARTA (JP): PT Krueng Gasui, a junior local mining company,
will continue to pursue its rights as a minority partner in the
Busang gold mine regardless of the amount of gold found, a
company executive said over the weekend.

"Regardless of the amount of gold found the ownership issue is
not resolved," Krueng's president Jusuf Merukh said Saturday.
"The government must see that the ownership is not linked to the
gold but to the forth generation contract of work which has been
breached," he said.

Krueng Gasui is filing a lawsuit against Busang's largest
shareholder, the Calgary-based Bre-X Mineral Ltd., and is seeking
support from the Indonesian government to have its ownership
rights recognized, he said.

Jusuf said the company had requested a further meeting with
the Ministry of Mines and Energy and expected to meet with the
new director general of mines and energy, Adjat Sudradjat, to
settle the problem.

The company claimed that it and its partner PT Westralian Atan
Minerals (WAM) were the rightful owners of Busang under the
fourth generation contract of work.

PT Krueng Gasui was one of the minority shareholders in the
contract of work granted to WAM in 1987. The contract and the
associated agreements provided Krueng with a 10 percent share and
a 20 percent option. Krueng's partners in WAM are Westralian
Resource Projects Limited, a subsidiary of Bre-X and PT Sungai
Atan Perdana, Jusuf said.

But the contract had been violated by Bre-X Minerals Ltd, now
known as the majority owner of the Busang gold mine, he said.

Rumors have swirled around Busang since what has been called
the century's biggest gold find was cast into doubt on March 26
when partner Freeport-McMoran Copper and Gold Inc. said its
preliminary due diligence tests found "insignificant" amounts of
gold.

Bre-X, the discoverer of Busang, had estimated the site
contained about 71 million ounces of gold, potentially the
largest in the world.

Last year, Bre-X was the target of an intense bidding war as
several heavyweight mining firms battled for control of the gold
discovery deep in the jungles of Kalimantan

Barrick initially dominated the negotiations, but it lost the
inside track when noted businessman Muhammad "Bob" Hasan entered
the fray.

Bob swiftly brokered a deal, giving New Orleans-based Freeport
McMoran 15 percent of Busang and the right to mine the project.

The arrangement left Bre-X with 45 percent, down from an
original 90 percent stake, and the rest to two local companies
and the government. (das)