As two Indonesian companies and their Australian backer dispute the title to its Busang gold deposit, Bre-X Minerals (BXM-T) has moved to cement a relationship with a powerful friend.
Bre-X and spinoff company Bro-X Minerals (BXO-A) have formed an alliance with Indonesian-based Panutan Duta, a private company controlled by Sigit Harjojudanto, the son of Indonesian President Suharto. Bre-X has retained Panutan as a consultant at a cost of US$1 million per month for 40 months.
Panutan, which has oil, mining and telecommunications interests, will assist Bre-X with what the Canadian company calls “administrative, technical and other support matters.” The agreement will close only when contracts of work are issued for the Busang properties.
Under the agreement, Panutan will receive a 10% interest in both the Central and Southeast zones at Busang. Panutan will also receive a cash advance, which may be used to buy out existing Busang partners as well as those at other Indonesian properties held by Bre-X and Bro-x.
Should any of the projects come to production, the advance is to be repaid from cash flow. The agreement also forms a company, which is owned 40% by Panutan, that will provide utilities, fuels and aggregate supplies to the Bre-X projects.