How discovery of $6,000,000,000 ‘gold mine’ led to sinister consequences

A Canadian company in the 90s managed to fool people and secure millions in investment in a wild scam.

Unless you are in the mining industry, you probably haven’t heard of the Bre-X mining company.

But they are responsible for one of the biggest gold mining scams in the industry and it even resulted in the death of one key member.

John Felderhof, known as the Indiana Jones of geologists believed the a site in Busang, Indonesia, was a goldmine but he needed cash to move forward.

In April 1993, he was able to strike a deal with Bre-X Minerals CEO David Walsh and Walsh was able to sell this gold dream to investors.

The company bought land in Busang, and two years later claimed significant amounts of gold had been found on it.

Felderhof controlled operations on the ground but said he wanted a project partner to help with the search, fellow geologist and friend Michael de Guzman.

Michael De Guzman was integral to the massive fraud (Family handout)

With only a little time before the exploration licence (granted to them by the Indonesian government) expired, Guzman and Felderhof allegedly found gold at the precise spot they needed to. The idea on where to drill came to Guzman in a dream... yeah, sure.

As you can imagine, the idea that gold had been found sent the company’s stock price soaring. In fact, it was valued at C$6bn ($4.4bn).

In early 1997, then Indonesian President Suharto ruled that the small Bre-X company couldn’t solely own the site. It therefore had to be shared with the Indonesian government and assisted by a larger and more experienced mining firm.

A deal was struck with US company Freeport-McMoRan. But the company insisted on doing its own checks on the site before agreeing to the massive financial risks that come with precious metal mining.

The company's geologist were sent in to recover rock samples, a standard practice in mining, and the sampled were sent to two different labs. Both labs confirmed that there were no traces of gold found.

I think those who had already thrown out some serious money might be a little bit cheesed off about this conclusion. De Guzman would allegedly die not long after this discovery and this has fueled multiple theories about what happened to him.

Jerome Alto, site manager; John Felderhof, senior vice-president; Michael de Guzman, exploration manager; Cesar Puspos, senior geologist. Bre-X Minerals Ltd. geologist Mike de Guzman is presumed dead after he fell from a helicopter. (Northern Miner)

De Guzman, was at a convention in Toronto at the time but was asked to return to Busang to meet with the Freeport-McMoRan team to explain himself.

His final moments have been pieced together by journalist Jennifer Wells who covered the story for years. She has said he spent his last evening in the city of Balikpapa, a little more than 100 miles away from the Busang mine, with Bre-X Minerals employee Rudy Vega.

According to an account, Vega, who would later tell this to the Indonesian police, the two of them went to a karaoke bar. After returning to his hotel room, de Guzman attempted to take his own life.

He would then successfully take his own life while taking a helicopter to the mine, this time not travelling with Vega.

He had reportedly jumped from the helicopter into the wilderness below, however, this series of events has been questioned and contested over the years.