LETTERS TO THE EDITOR — Reporting of reserves deemed irresponsible

Although the details of the Busang affair will be emerging for a long time to come, recent weeks have seen a flurry of belated checking by writers and analysts, much of which should have been done last year. Seldom has so much been accepted so uncritically by so many for so long. A remote and access-Controlled site obviously provided good soil for this corporate weed.

Changes in the corporate climate over the past decade, however, also contributed.

To begin with, an obsession has arisen among those responsible for categorizing mineral inventories to designate all uncertain, undesigned or otherwise inferior categories as a “resource.” That usage is misleading as used by the irresponsible, who often know that readers will have varying interpretations. Even the notorious “estimate” of 200 million oz. made by [former Bre-X Minerals director] John Felderhof was upgraded by some into the official “reserve” category.

There is also a tendency to describe mineral inventories only in terms of their gold content. Any mention of the enclosing rock, which incurs all costs and determines the scale of operations and environmental disturbance, is omitted. Assets are reported, but not liabilities.

Lastly, it is now fashionable to accumulate inventories by purchase, which comes at great risk, rather than by discovery. Productive mining seems to have lapsed into secondary relevance.

A couple of short-Term steps can be taken. Responsible publications should embargo announcements of mineral inventories that fail to disclose the tonnage of accompanying rock. In addition, the reportage of accumulated ounces by companies should also be discouraged. Such descriptions serve no useful purpose.

H.K. Taylor, P.Eng

Vancouver, B.C.