So with monotonous regularity someone posts a reference to...

So with monotonous regularity someone posts a reference to Bre-X, but maybe the Bre-X comparison can serve a useful purpose. I just watched a video that referenced Bre-X and it got me thinking – could this be used as a model for BBX’s SP? It’s the best example I can find of a junior finding a Giant gold deposit. Bre-X stock went from 30 cents a share to more than $286 ($6B MC) before it all came undone.

Finding the data outlined below took ages but it’s too hot to venture outside and the comparison below is a bit of an eye-opener.

The average sample grade at Busang (Bre-X’s deposit) was less than 3g/t. Our avg. grade could be 100g/t (that’s not the number I’d use personally, but I’m being conservative).

In 1996 the POG was $400/oz. Now it’s $1350/oz!!

From what I could find Bre-X had 210 millions shares on issue. BBX have only got twice as many at ~440M shares.

Bre-X’s last resource estimate came in at 70Moz. We would need 22Mt at a grade of 100g/t AuEq to prove up 70Moz.

70Moz at 100g/t is 22Mt of dirt which is a pit 340m x 200m x 100m deep. Of course we’d need to drill some holes to prove it up, but the planned diamond drilling over the Adelar workings alone covers an area of 400m x 300m and there’s another 4 areas similar in size to be drilled at Tres Estados and Ema. That means we could easily be proving up 5 times the area required.

The next round of diamond drilling and all assaying will be completed at some stage in the next 6-8 months although first assays are weeks away.

Pilot plant results and trial mining and processing which will remove all doubt about the viability of the extraction method are weeks\ months away. We’ll learn more about this over the next few weeks.

Bre-X

From initial private offerings at 30 cents a share, Bre-X stock climbed to more than $250 on the open market. Near the peak of Bre-X share prices, major banks and media were on board:

The Peak

• It was touted by media and banks as the “richest gold deposit ever” J
• In December 1996, Lehman Brothers Inc. strongly recommended a buy on “the gold discovery of the century.”
• Major mining companies such as Barrick Gold, Placer Dome, and Freeport-McMoRan Copper & Gold, among other top producers, fought an epic battle to get a piece of Bre-X’s Busang deposit.
• Indonesia’s Suharto regime managed to grab 40% of the deposit for Indonesian interests.
• Fidelity Investments, Invesco Funds Group, and other mutual-fund companies piled into the stock.
• J.P. Morgan bankers talked up Busang in a conference call in which Bre-X’s top geologist predicted the deposit might contain a staggering 200 million oz of gold, worth over $240 billion in 2014 prices. Morgan declined to comment.
• Egizio Bianchini, stock broker and one of Canada’s top gold analysts, said “What most people are now realizing is that Bre-X has made one of the great gold discoveries of our generation.”