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Biggest gold find ever?

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Asia Week - March 1, 1997

Three years after discovering what is touted as the worlds richest gold lode in Indonesias Kalimantan province, Canadas Bre-X Minerals may have finally hit the jackpot. It reached an agreement for a development venture with the Indonesian government and other partners last week. Bre-X claims the mine could yield 200 million ounces of the metal – more than Indonesias total confirmed gold reserves and worth some $68 billion at current prices. The pact at a glance:

Winners

  • Bre-X Minerals keeps 45% of the mine – but is paid nothing for the other 45% it gave up.
  • Bob Hasan gets 30% through PT Askatindo Karya Mineral and PT Amsya Lyna – for free.
  • Americas Freeport-McMoRan Copper & Gold takes a 15% stake and operational control of the project – and kicks in $400 million up front as initial investment.
  • The Indonesian government gets 10% of the shares, also free.

Losers

  • Canadas Barrick Gold Corp. ends up with nothing despite expensive lobbying and even linking up with President Suharto's eldest daughter, Siti Hardijanti Rukmana.
  • Barricks Canadian rival Placer Dome also loses out. It had explored a merger with Bre-X but now says it would be difficult to proceed.
  • Also out in the cold: Indonesian state-controlled mining firms PT Aneka Tambang and PT Tambang Timah, Canadas Teck Corp. and Newmont Mining of the U.S.
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