In 1993, a prospector named Michael de Guzman walked out of the jungles of Borneo with extraordinary news: he found gold.This is according to MasterMinds, a Canadian true crime documentary television series produced by truTV.
For the next three years, de Guzman produced thousands of core samples riddled with gold. Canada’s CBC News has a detailed timeline of the events.
During that period, the market value of de Guzman’s employer, Bre-X Minerals, went from nothing to $6 billion. BusinessWeek notes that Wall Street’s top analysts were extremely bullish on the stock. Big funds poured money into the stock and the world’s major miners wrestled for a piece of the action.
The problem: there was no gold.
As the story unravelled, records mysteriously burned and people unexpectedly died. Questions were left unanswered.
There are plenty of people who wish this story would just go away. But just a few days ago, a lawyer representing one of the players in the Bre-X story was disbarred.
What follows is a summary of MasterMinds’ telling of the incredible story.
Michael de Guzman,a Filipino geologist, was struggling to get recognition from his employer. So, he devised a plan to get rich
He would convince the world that he had found gold in Borneo. But first he needed someone with credibility to corroborate his story
Enter geologist John Felderhof, who immediately got excited about the news. De Guzman convinced Felderhof that they needed an investor
De Guzman and Felderhoff wined and dined Walsh in Indonesia, and immediately got him to commit $80k to the project
Now that he had financing, de Guzman assembled a team and started pulling core samples out of the ground
After the core samples were crushed and collected, de Guzman made sure he had some privacy with them before they were shipped off to be analysed
De Guzman used a ratio of around 3oz of gold per ton of rock, which was small enough to not attract too much attention. The labs were convinced and gave Bre-X the thumbs up
So, he started paying locals for their gold, which they got through panning. De Guzman would buy $61k worth of this panned gold over the next two and a half years
However, all of this wealth creation caught the attention of Indonesian President Suharto, who wanted to get in on the action
With the government hot on is tail, de Guzman allegedly set fire to his office, destroying all of his records
The Indonesian government eventually left Bre-X with only 45% control of the mine, and the rest was left to be run by Freeport McMoran. Bre-X's market cap plunged by a billion dollars
To offset this, de Guzman ramped up the amount of gold flake showing up in the core samples, and the stock soared again. The shareholders were pleased
But after much drilling, the miners from Freeport McMoran couldn't find a flake of gold. They were suspicious and they demanded that de Guzman explain
De Guzman boarded a helicopter that would fly him to the site. The only other person in the helicopter was the pilot
According to reports, the pilot turned around at one point and de Guzman was gone. Everyone concluded that he jumped
Days later, the Indonesian Army found de Guzman's body, which they said was badly decomposed and mostly eaten by animals. The family was not allowed to see the body
Walsh denied knowing anything about the fraud. He soon moved to the Bahamas where he died of a heart attack two years later
Felderhof, the only one who was charged of anything was acquitted. He now lives in the Cayman Islands, which has no extradition agreement with Canada regarding white collar crimes
People think that de Guzman is still alive. One expert noted that Indonesia is one of the easier places to disappear. Apparently it only costs a few hundred dollars to buy a dead body
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