In the 1990s, a Canadian company orchestrated a significant deception, convincing many and securing millions in investments through an audacious scam.
If you’re not involved in the mining industry, it’s unlikely that the name Bre-X rings a bell.
Bre-X was behind one of the most notorious gold mining scandals in history, which even led to the death of a pivotal figure.
John Felderhof, dubbed the Indiana Jones of geology, believed he discovered a gold-rich site in Busang, Indonesia, but lacked the capital to proceed.
In April 1993, he partnered with Bre-X Minerals CEO David Walsh, who then successfully pitched this lucrative gold venture to investors.
The company acquired land in Busang, and two years later, they announced substantial gold discoveries on the property.
Felderhof managed the site operations but sought assistance from another geologist and friend, Michael de Guzman.
With the exploration license from the Indonesian government nearing expiration, Guzman and Felderhof reportedly discovered gold precisely where needed. Guzman claimed the drilling location came to him in a dream.
The news of gold discovery sent Bre-X’s stock skyrocketing, valuing the company at C$6 billion ($4.4 billion).
However, in early 1997, then-President Suharto of Indonesia decreed that a small company like Bre-X couldn’t exclusively own the site. It needed to share the rights with the Indonesian government and partner with a larger, more established mining firm.
A partnership was formed with the US company Freeport-McMoRan. However, Freeport insisted on conducting its own site evaluations due to the substantial financial risks involved in precious metal mining.
Their geologists retrieved rock samples, which were analyzed by two separate labs, both of which found no evidence of gold.
Those who had invested heavily were understandably upset by these findings. Shortly after, de Guzman allegedly died, sparking numerous theories regarding his demise.
De Guzman was attending a convention in Toronto but was summoned back to Busang to meet with the Freeport-McMoRan team for an explanation.
Journalist Jennifer Wells, who covered the story extensively, pieced together his final hours. She reported that he spent his last evening in Balikpapan, about 100 miles from the Busang site, with Bre-X employee Rudy Vega.
According to Vega’s account to Indonesian police, the two visited a karaoke bar. Upon returning to his hotel, de Guzman attempted suicide.
Later, while traveling by helicopter to the mine without Vega, he successfully ended his life by reportedly jumping into the wilderness below, though this account has been debated over time.