Management of Diadem Resources (DIR-M) is refusing to make cash-Call payments to Bresea Resources for work performed by Bre-X Minerals at the Belitung Island base metal projects in Indonesia.
After an audit showed that Bre-X’s Busang gold deposit was a fraud, Diadem launched an extensive due diligence investigation into the exploration ventures with Bresea in Indonesia. Bre-X operated the work programs up until May 8.
Diadem retained KPMG Peat Marwick to perform a forensic examination of all financial information relating to the Bresea-Diadem projects, of which Bre-X was operator.
At the same time, an independent Canadian geologist was retained to perform a geological audit and report on its results.
Diadem says it notified Bresea and Bre-X that it will not be making any payments until the financial audit is completed, as preliminary results “suggest that amounts invoiced have been substantially overstated.” Diadem also recommended that Bresea take steps to freeze all payments to Bre-X, “on the basis of numerous mistaken calculations as well as several substantive issues relating to Bre-X’s conduct and actions during its tenure as operator of the projects.”
Diadem, Bresea and Tandem Resources (TDM-M) recently sent notices to an Indonesian partner, withdrawing from three joint ventures in Kalimantan. All work has ceased on the two Upper Makaham properties and the Mirah North property.
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