Bre-X founder dreamed of riches
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TORONTO (Reuter) - David Walsh, the maverick Canadian embroiled in the world's biggest gold fiasco, always
dreamed of striking it rich.
Under siege since doubts about Busang deposit surfaced in late March, Walsh had dismissed the conspiracy and
tampering theories that have dogged his company Bre-X Minerals Ltd. -- until now.
"We share the shock and dismay our of shareholders and others that the gold we thought we had at Busang now
appears not to be there," Walsh said after his company released a devastating report on Busang Sunday.
In an interim report to Bre-X, consultant Strathcona Mineral Services Ltd. said the company's data on Busang was
falsified on a scale "without precedent in the history of mining anywhere in the world."
It is a stunning conclusion to a mystery that has gripped the world mining community in recent months.
Walsh, 51, has made millions of dollars and appeared on the covers of national magazines since his Calgary, Alberta
-based exploration company announced its 1993 Busang gold discovery in Indonesia.
"I'm nuts. I'm looking for the bucket of gold at the end of the rainbow," the beefy stock promoter, who lives in the
Bahamas, told a Canadian magazine earlier this year.
Veteran Calgary journalist Jim Bentein, who covered Bre-X since its early days on the Alberta Stock Exchange, has
described Walsh as "a sophisticated trucker," who is as comfortable having a beer and a smoke in a bar as he is in
financial circles.
After the Strathcona report, some Bre-X shareholders who stood by the company during the turmoil now blamed
Walsh.
"He should be prosecuted to full extent of the law," Chris Laughren, a construction worker, told Reuters Sunday as he
waited anxiously outside Bre-X's headquarters in Calgary.
Laughren said he has lost C$7,500 ($5,400) on Bre-X stock, or "three months work down the drain."
Walsh said Sunday he would do all he could to protect Bre-X's assets "for the benefit of the shareholders."
Raised in a wealthy suburb of Montreal, Walsh followed his father and grandfather into the stock business.
He joined a small trust company shortly after graduating from high school. In 1976 he moved to brokerage Midland
Doherty Ltd. (now Midland Walwyn Capital Inc.) and rose to vice president in its institutional equity sales department.
In the 1980s Midland moved Walsh to Calgary, but he left the company shortly afterward to set up his own company,
Bresea Resources Ltd.
After dabbling unsuccessfully in oil and gas, Walsh created Bre-X Minerals Ltd. in 1989 and ventured into mining. But
by 1993 his exploration efforts had dried up.
He and his wife declared bankruptcy in 1993 after accumulating almost C$60,000 ($43,800) in debt on 15 credit
cards.
"We had these claims which were worthless, and no money," Walsh said in an interview earlier this year.
Almost broke, he scraped together C$10,000 ($7,300) to start exploring in Indonesia, pursuading friends to invest
C$200,000 ($146,000) for a stake in the area now known as the central Busang in Indonesia's East Kalamantan
province.
Walsh hit the jackpot with Busang, and Bre-X quickly became the darling of the world's mining community.
"There's nothing like success. Our other explorations have been zero. I had never imagined it would be this big," he said.
Walsh, his wife and other company officials added more than C$37 million ($27 million) to their bank accounts after
they sold Bre-X stock at prices ranging from C$24.40 ($17.81) to C$28.40 ($20.73) between August and October
1996.
But the sales were controversial because they occurred shortly after Bre-X learned its preliminary license had been
canceled by the Indonesian government, a development the company did not reveal publicly until October 1996.
As the fallout from Sunday's announcement reverberated through the world mining community, Walsh had little to say to
reporters as he sped away from Bre-X's Calgary headquarters.
"I think our press release says it all for now," he said. |
