Busang’s fate still uncertain

The Indonesian Ministry of Mines and Energy has sent a letter to Bre-X Minerals (BXM-T) and Barrick Gold (ABX-T) that reportedly gives the two companies one month to complete a development agreement for the Busang gold project in Kalimantan.

The Ministry’s reply, dated Jan. 15, has not been released. Both Bre-X and Barrick have acknowledged that the government’s remaining concern is the settlement of ownership claims by Bre-X’s Indonesian partners.

Press reports originating in Jakarta had said that the Indonesian government’s reply told Bre-X and Barrick that ownership disputes with Bre-X’s Indonesian partners must be resolved in one month or the government would take over the right to operate the project. Bre-X subsequently denied the report, mentioning only a 30-day deadline for negotiations. Its release did not mention Barrick, saying only that it would negotiate with “other interested parties.”

A statement from Barrick said the letter “supports the Bre-X-Barrick joint venture,” and that the Indonesian government’s plan for the project was to form a company owned 67.5% by Barrick “and its partners,” 22.5% by Bre-X and Indonesian partners Askatindo Karya Mineral and Amsya Lyna, and 10% by the government directly.

Neither company mentioned Kreung Gasui and other partners in the Busang Central property, which have filed suit in Alberta to have an interest in the Busang II and III properties recognized by the Canadian courts.