Diary: All that glisters at the bottom of mine may not be worth as much as yours

It is not only investors who are suffering sleepless nights in the unfolding tale of the Busang gold mine, once - erroneously - thought to be worth dollars 50 billion (pounds 31.25 billion).

It is not only investors who are suffering sleepless nights in the

unfolding tale of the Busang gold mine, once - erroneously - thought to

be worth dollars 50 billion (pounds 31.25 billion).



In the world of PR, I hear Hill and Knowlton’s New York office is also

relearning the truth of those irritating proverbs about counting

chickens, and grass being greener on the other side.



The Borneo mine, once reckoned to straddle the richest gold strike this

century, hit the news recently after independent drilling revealed only

’insignificant amounts of gold’. The mine’s owners Bre-X Minerals, which

employs Hill and Knowlton, then admitted the strong possibility that the

mine’s reserves had been overstated.



Soon after its chief geologist apparently committed suicide en route to

a meeting where he was to explain why new tests showed up minimal

gold.



All of which was a severe blow for thousands of investors, whose panic

saw the value of shares plummet from from dollars 32 to dollars 2 on the

Toronto Stock Exchange, causing trading to be suspended twice - once

because of the freefall and again because fresh selling caused the TSE

computer system to crash.



But spare a thought for Hill and Knowlton. Not merely is its client

taking a pasting but it must now be regretting its decision, three

months ago, to resign its international account of 11 years standing

with a company called Barrick Gold in order to take on the Bre-X

business.



That’s the same Barrick which is the largest gold mining company in the

world outside South Africa and owns the most valuable gold mine in the

US.



All that glisters.



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