TESTING FIRM SAYS BORNEO GOLD CLAIMS A LODE OF BULL.

Byline: Associated Press 

The Indonesian jungle tract touted by Bre-X Minerals as one of the biggest gold bonanzas ever is instead the site of one of the biggest scams in the history of mining, an independent testing company said Sunday.

Strathcona Mineral Services Ltd., a consulting firm hired to resolve a dispute over the value of the Busang site on the island of Borneo, said its tests showed no evidence of any gold worth mining. It also asserted that the supposedly promising samples gathered earlier by Bre-X had been tampered with by the addition of gold from other sources.

However, Strathcona's report did not indicate who might be responsible.

Bre-X, a small Calgary exploration company, had hired Strathcona to conduct tests after a prospective partner of Bre-X said in late March that its preliminary tests indicated the claims of a vast gold deposit at Busang were false.

That announcement by the potential partner, New Orleans-based Freeport-McMoRan Copper & Gold, triggered a meltdown of Bre-X stock on the Toronto Stock Exchange. In less than 30 minutes of trading on March 27, Bre-X stock - for three years a darling of many investors across North America - plunged by 84 percent, a loss of more than $2 billion U.S.

Despite the stock collapse, Bre-X insisted that further testing would validate its claims that the Busang site contained up to 70 million ounces of gold - which would make it the biggest gold find of this century.

Instead, Strathcona corroborated Freeport's negative results.

``We very much regret having to express the firm opinion that an economic gold deposit has not been identified in the southeast zone of the Busang property, and is unlikely to be,'' wrote Strathcona's Graham Farquharson of the Indonesian claim.

``The magnitude of the tampering with core samples that we believe has occurred and resulting falsification of assay values at Busang, is of a scale and over a period of time and with a precision that, to our knowledge, is without precedent in the history of mining anywhere in the world.''

Strathcona, a widely respected mining consultant firm, said in its report that only trace amounts of gold were found in the samples it tested and there were no samples with gold values worth mining.