EDITORIAL — Dearth of data warranted skepticism — The bitter taste of humble pie

There were many tales told at the Busang property in Kalimantan, Indonesia, but one that might have a grain of truth was the story of the over-educated “egg-head” geologist sent by a major mining company (no, not Barrick) a year or two ago to examine the property’s potential.

Armed with his Ph.D., years of field experience and a healthy dose of skepticism, our unknown soldier marched off into the jungle to examine, first-hand, what Bre-X geologists believed to be their elephant-in-waiting.

As the story goes, he looked at outcrops, studied the alteration assemblage and may even have taken a few samples for testing.

While all this was going on, Bre-X’s on-site exploration team no doubt was expounding its “maar-diatreme” geological theory which, boiled down, meant Busang was like the nearby Kelian gold mine, only with a much, much larger structural setting that made it far, far more prospective. “Kelian, plus,” as Bre-X Vice-Chairman John Felderhof would often say.

As the story goes, the “over-educated” scientist missed the “big picture” because he was too preoccupied with details, such as the geochemical expression of the deposit, its mineralogy and the nature of the surrounding rock and associated structures. And if Busang was about anything, it was about “the big picture.”

Our unknown geologist then went back and prepared a report, which, we were told, was numerous pages in length. On a point-by-point basis, he stated his views on the project, which clearly did not line up with those of the Bre-X technical team. We were told that the scientist was puzzled, for one thing, by the lack of a geochemical expression for this particular epithermal deposit. The “real story,” according to the Bre-X team, was that it had “limited” geochemical expression, for reasons then unknown.

As the story goes, the geologist’s views found their way to Bre-X’s exploration team on site, where they were held up to ridicule as an example of how a geologist can become so fixed on trees that he is unable to see the forest.

The story’s irony is now altogether too obvious. It is time for us to eat a little humble pie and acknowledge that we, like so many others, bought into the Busang story with perhaps a little too much enthusiasm, before the technical work (an independent, audited prefeasibility or feasibility study) was in-hand to support Bre-X’s claims. After all, it isn’t ore until it can be mined at a profit.

We had been told that Kilborn Engineering was gathering information for a feasibility study and, at the time, this appeared to be the case. As it turns out, though, the firm’s mandate was restricted to reserve and resource calculations using data provided by Bre-X.

So, if Busang is as big a bust as it now appears to be, we’re prepared to take our lumps for having given Bre-X’s David Walsh and John Felderhof our “Man of the Year” award last year for their role in creating Bre-X and “discovering” the Southeast zone at Busang.

We’ll take those lumps, knowing we did the best job we could with the information made available to us. And, later, when the issue became rather more complicated, we attempted to provide as much sound technical information as we could so that shareholders of Bre-X and others could make up their own minds as to what took place at the property.

It would have been helpful to have had the report that our unknown skeptic prepared on Busang. Perhaps, had more skeptics made their views known, Bre-X might have been asked to curtail its arm-waving and talk of “millions and millions of ounces” until it had the technical data to prove, beyond a shadow of doubt, that it had even 1 million ounces of gold at Busang.