Sudjana to check into Busang rumors

JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana said yesterday he would soon check into rumors that the gold deposits found in East Kalimantan's Busang area might not contain the 70 million ounces as claimed by Bre-X Minerals Ltd.

"I just learned of the rumors from newspapers but I will immediately check on them, and if they are true the government will take firm action," Sudjana was quoted by Antara as saying.

However, he confirmed that information on Bre-X's huge gold find had never been verified by independent analysts.

Reports from Toronto said on Friday that Bre-X shares took another tumble on the stock exchange as doubts about the Busang deposits and the mysterious death of its chief geologist Michael de Guzman in E. Kalimantan on Wednesday pushed investors to dump the shares.

The economic newspaper, Neraca, quoted unnamed sources here on Friday as disclosing that Freeport McMoRan Copper & Gold Inc.'s tests did not match the Canadian company's estimates.

"But to my knowledge, Freeport has not yet completed its exploratory tests of the Busang gold deposits," Sudjana said.

Bre-X was forced last month to bring in an American partner -- Freeport -- to help fend off the unwanted intervention by another Canadian company, Barrick Resources, for control of the Busang field.

Under an agreement concluded last month, Bre-X owns 45 percent of the Busang gold mine, Freeport 15 percent, the Indonesian government 10 percent and Indonesian private companies, including the Nusamba group, the remaining 30 percent.

The news report, and rumors on the Toronto Stock Exchange floor, suggested that Freeport's assessors were reporting that the gold find was not as great as had previously been reported.

But Bre-X issued a terse statement saying: "Senior officials of Freeport and PT Askatindo Karya Minerals (an Indonesian partner in the project) have confirmed to Bre-X President David G. Walsh they are still conducting their due diligence at the Busang site and have not commented on the progress, to the press, in this regard."

The statement also confirmed that Bre-X vice chairman John Felderhorf was in transit to Indonesia "to assist in the due diligence process, replacing de Guzman."

Reports from E. Kalimantan yesterday said rescue workers were still searching for the body of de Guzman, who fell from a helicopter on his way from Samarinda to the Busang area last Wednesday. (vin)