Bre-X outlines mineralization at Busang gold project

Alberta-listed Bre-X Minerals continues to post drill results from its Busang project in Kalimantan, Indonesia.

Drill results have been released for two new cross-sections of the Busang drill grid. The company reported only those intersections that were longer than 10 metres and graded more than 1 gram gold per tonne. All gold assaying was done by cyanide-leach analysis.

At section SEZ-44, all nine drill holes intersected mineralization, some of which topped 311 metres in length, with grades of up to 4.9 grams gold per tonne. Near the centre of the drill grid, SEZ-44 represents a fill-in between previously drilled sections.

On section SEZ-59, a stepout southeast of SEZ-44, five holes returned gold grades of up to 3.7 grams. The widest intersection was 168 metres long.

Bre-X did not provide true widths of the mineralized zone, but it has calculated composite mineralized widths of 500 metres on line SEZ-44 and 400 metres on line SEZ-59. Southeast Zone I is interpreted as an alteration zone 750-900 metres wide and 1,700 metres long, enveloping a zone of gold mineralization 300-625 metres wide and 1,500 metres along strike.

Also, Bre-X announced it “would not unduly withhold written approval” of the pending deal between Minorca Resources (ME) and Indonesian-based Askatindo Karya Mineral (Bre-X’s partner at Busang), provided AKM’s interests are adequately protected. However, Senior Vice-president John Felderhof cautioned Minorca that certain contracts are difficult to enforce under Indonesian law.

In addition, Bresea Resources (ME), which owns 23% of Bre-X, has announced a private placement of 2 million shares.

The deal is expected to raise $29.4 million.

The company believes the issue is “significantly oversubscribed” and expects to close the placement by April 26. A portion of the proceeds will be applied to its five properties in Indonesia.