Synopsis
In the mid 1990’s, the Calgary, Albert, Canada based Bre-X Minerals LTD., went from being a minor player in the Canadian gold mining industry to a powerhouse with stock worth over $6 billion, based on their extraordinary find in the jungles of Kalimantan, Indonesia.
Bre-X partners David Walsh, John Felderhof and Michael de Guzman announced the discovery of a massive gold deposit in Kalimantan, Indonesia, possibly the largest in the world. Attracting investors from all over the world, major trading institutions and ordinary citizens caught “gold fever”, investing heavily in what looked like a sure thing. Bre-X stock skyrocketed and “the little company that could” became a media darling. David Walsh and John Felderhof went from men one step away from personal and financial disaster to joining the company of the richest men in Canada. They reveled in their newfound luck, buying estates in the Caribbean along with all of the toys that come with being new money.
But all was not well in Indonesia. While legal battles were being fought over Bre-X’s land rights, rumors circulated about core sample tampering and other suspect procedures at the site. When confronted, Michael de Guzman, in charge of the site, was adamant that nothing was wrong. The financial centers in New York, London, Toronto and Jakarta ignored the warnings – everyone was too busy getting rich. No one did real due diligence, and those who went to the site were treated like kings, shown what the Bre-X principals wanted them to see, then were wined and dined continuously.
Walsh and Felderhof were continually assured by de Guzman that the core samples and estimates were real. But when a senior mining company did their due diligence in order to buy the production rights to the operation, all hell broke loose. They were kept from the site. Records were destroyed. Finally, as Walsh, Felderhof and de Guzman were basking in the glory of an awards ceremony in Toronto in early 1997, word came to them from the company doing an independent study of their site. There was no gold in Kalimantan. It was a fake.
The stock crashed, leaving the mining industry in shambles and tens of thousands of people penniless. De Guzman died mysteriously, falling from a helicopter over the vast jungle on his way back to the site. To this day, some think murder, some suicide. Some think he’s alive and even faked his death, as it was uncovered that he and his geologists were behind a massive salting scandal to fake better results than they actually had. Considered to be the greatest gold fraud in history, the Bre-X scandal, with its unanswered questions, continues to intrigue to this day. Walsh died of a stroke one year later, a broken man, and Felderhof, now penniless, lost millions in court battles throughout the year.
It is the story of men reaching for the brass ring, getting it, achieving their dreams, only to lose them just as spectacularly.