Barrick’s proposal rejected by Bre-X

A proposal in which American Barrick Resources (TSE) offered to acquire property joint-venture options and an equity stake in Bre-X Minerals (ASE) has been rejected.

“We declined Barrick’s offer because, in the long term, it wasn’t in the best interests of our shareholders,” explained Bre-X President David Walsh. The company has resumed discussions with other interested majors and financial institutuions regarding joint-venture participation and funding. It recently negotiated a private placement of $150,000 with a European financial institution, which, Walsh said, “will see us through until we reach an agreement with another interested party.” He added that such an agreement is expected within the next 30 days.

In the meantime, Bre-X will continue to explore its Indonesian properties. A 10-hole, 3,300-ft. drill program will be completed on the Busang gold project in Borneo’s East Kalimantan province. Previous work returned significant gold assays and, if results warrant, an additional 10,000 metres will be drilled.

On the Sable property in nearby Sumatra, soil sampling and geological mapping will get under way in March. This will be followed by sampling and mapping before a 2,000-metre drill program starts up in May.

Meanwhile, drills continue to turn on the Sangihe Islands, where six holes have been completed on the Taware gold property.

Over the past 10 months, Bre-X has spent more than $1 million on all three properties. It will spend another $1 million this year. Assuming the completion of scheduled programs, this year’s budget will be $3.5 million. For its part, Barrick will not proceed with the Bre-X acquisition. It has, however, acquired more than 1 million units of Canarc Resource (VSE) at $4.57 each. A unit consists of one common share and a common share purchase warrant to acquire an additional common share until Feb. 10, 1995, at an exercise price of $4.57 per share.

Canarc, in conjunction with the unit purchase, has granted Barrick the first right of opportunity to participate in project development should Canarc seek a partner to joint-venture, sell, develop or transfer any of its property interests. Barrick’s first right of opportunity is contingent upon its exercising the share purchase warrants.