Bre-X #2: the Skeptical Geologist

Here is an interesting contemporary report from a stock market observer about a Bre-X skeptic:

I

n our Stockex Issue 6/96 of October – November last year we wrote as follows, at about the time Bre-X was being asked to go on a blind date with Barrick.

“Remarkably, given the involvement of groups like Kilborn in the intermediate feasibility study defining proven, probable and possible ore, there are still skeptics out there – on 30.11.96, an anonymous senior geologist in Jakarta was quoted as saying about Busang:"They haven’t proved a thing to me yet." We also recall skeptics of a few months ago who were saying that BreX in some way or another were fudging the assay results; Stockex feels that unless we are looking at the one of the great scams of the 20th Century, can $20 million in exploration costs, 2 years work by 15 geologists and 7 drill rigs, be anything but Kosher?”

It seems there is at least one still anonymous senior sceptical geologist in Jakarta, and all power to him or her if their reservations of October 1996 prove correct. Since the above data were published, Bre-X have gone on to claim anywhere from 70 to 200 million ozs of gold may be present at Busang, and the Indonesian glitterati and power brokers have all scratched and broken their fingernails in getting a seat inside the Aladdin’s Cave that is Busang.

It would indeed be one of the world’s great ironies if this avaricious mob have ended up with 4/5 of 2/3 of stuff-all. (We’ll come to the Canadians later.) By providing some historical overview of Busang and its main players, we can update events to about 7th April 1997. From March 26th 1997, Strathcona Mineral Services were retained by Bre-X to audit both the Bre-X program and the Freeport due diligence programs. It was Strathcona who tapped Chairman David Walsh on the shoulder and told him that there was "strong possibility that the gold resource was overstated because of invalid samples and assaying of those samples."

STOCKEX REPORT 1/9 Pierpont May 1997

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