Bre-X shareholders to get dividend

Shareholders of Bre-X Minerals (BXM-T) will soon receive shares of Bro-X Minerals, a wholly owned subsidiary which acquired Bre-X’s interests in the Sable and Sangihe properties in Indonesia for $2.8 million.

A final prospectus has been filed to qualify the distribution of up to 22 million shares of Bro-X to Bre-X shareholders by way of a “dividend-in-kind.” Each Bre-X shareholder of record on Oct. 23 will receive one Bro-X common share for every 10 shares of Bre-X. A cash payment will be offered in lieu of fractional shares.

Bre-X currently has 219 million shares issued and outstanding.

Bresea Resources (BSR-M) currently holds a 22.36% equity interest in Bre-X and will, as a result of the dividend-in-kind, acquire an approximate 22.36% equity interest in Bro-X. This can be increased to 28.75%, assuming the conversion of preferred shares.

The Alberta Stock Exchange has conditionally approved the listing of Bro-X, subject to Bro-X fulfilling certain requirements.

Bro-X currently has working capital of about $4.8 million.

Bre-X, meanwhile, is attempting to settle a dispute with an Indonesian partner that is seeking a larger stake in the main portion (the Southeast zone) of the Busang gold deposit in Kalimantan. Currently, this partner holds only a 10% stake in the smaller Central zone.

Bre-X, which has undertaken a review and investigation of the facts relating to the dispute, says the allegations made by its Indonesian partner are “without merit.”

Bre-X’s applications for Contracts of Work for Busang II and III properties have been delayed, however, pending resolution of the dispute. In the meantime, the company is continuing discussions with major mining companies interested in acquiring all or part of its interests in the Busang gold project.