Bre-X , Barrick said to continue Busang talks .
K.T. Arasu
JAKARTA 1996-12-06
Canada 's Bre-X Minerals Ltd and Barrick Gold Corp are to continue negotiations to hammer out a partnership agreement to develop the spectacular Busang gold find in Indonesia , sources close to the talks said on Friday .
" The negotiations will be held both in Toronto and in Jakarta , " one source , speaking on condition of anonymity , told Reuters .
Another source said most of the key negotiators from both Bre-X and Barrick had returned to Toronto , but declined to say if there had been any progress in their negotiations .
Both sources said Bre-X and Barrick did not hold talks on Thursday with Mines and Energy Ministry Secretary-General Umar Said , who is coordinating the negotiations over the Busang find in East Kalimantan .
The first source also said Bre-X had until December 21 to submit to the Indonesian Mines and Energy Ministry a feasibility study on the central region of the Busang property , estimated to contain 2.6 million ounces of gold .
The richest parts of the property to the north and south of the central region have been estimated by Bre-X to contain 57 million ounces of gold .
" Bre-X is expected to complete the feasibility report by December 16 and submit it to the government before the December 21 deadline , " the source said .
He said Bre-X would then formally seek the permission of the Indonesian government to begin construction to develop Busang 's central region , which might take up to two years .
The source declined to say if there had been any progress in the talks between Bre-X and Barrick .
" This is a huge project ...
we are not selling furniture , and Bre-X has 13,000 shareholders to answer to , " the source said .
" While there has been some agreement in principle on some issues , there are still others such as procedures and mechanisms that needed to be sorted out , " he added .
The source said no new deadline had been set by the Mines and Energy Ministry for Bre-X and Barrick to strike a deal .
The Ministry had given the companies until December 4 to complete a partnership deal , and advised Bre-X to take a 25 percent stake and Barrick 75 percent to develop the property .
" As far as I am aware , there 's been no new deadline , " the source said .
The Ministry 's Umar said on Thursday that both Bre-X and Barrick had responded positively to a government letter recommending a 25-75 split in the Busang gold property .
The government also wants 10 percent of the property .
Umar said the government had yet to receive a formal reply from the companies .
He had said earlier that if the two companies failed to reach a partnership agreement , the government would explore other ways to expedite development of the Busang find .
Bre-X has a partnership deal with PT Panutan Duta of the Panutan Group run by President Suharto 's eldest son , Sigit Harjojudanto , under which Panutan would receive $ 40 million over 40 months plus a 10 percent stake Busang 's richest parts .
Barrick has teamed up with a construction company in the Citra Group of Suharto 's eldest daughter , Siti Hardianti Rukmana , in what Barrick had said was a partnership " to prepare us for a potential mining development project " .