Marcos: Walsh is an idiot (always will be) and probably also a crook.
Saturday, November 1, 1997
Busang camp had a 'salting shack:' book
Bankruptcy beckons for Bre-X
By SANDRA RUBIN
The Financial Post
Tampering with core samples at the Indonesian gold operation of Bre-X Minerals Ltd. was so open
there was a "salting shack" right in the Busang camp, according to a new book.
It also says Michael de Guzman - who died in a mysterious fall from a helicopter days before
suspicion of fraud exploded on world markets - wrote several memos addressed to chief geologist
John Felderhof that discuss finding ways to keep the gold assay results consistent.
Erratic test results are often a clear tipoff to a salt job.
Vivian Danielson, editor of The Northern Miner and
co-author of the book Bre-X: Gold Today Gone
Tomorrow, said she has obtained copies of de
Guzman's memos that discuss "experiments being done
to hide the telltale signs of salting."
"It certainly refutes the notion that the dead guy did
everything."
Felderhof, whose role in the $6-billion fraud is a
question mark, has been holed up at his Cayman Islands
home since the hoax was exposed last spring. He has
said through his lawyers he did nothing wrong.
Danielson said it's not clear if Bre-X president David
Walsh had any direct knowledge of what was going on in Indonesia. "In the early stages, Walsh was
asking people: 'Should I bring my core back to Canada?'
"But he purposefully distanced himself from what was going on. Normally, with a discovery of this
size, a president of a mining company is all over this thing. I always thought that was strange ... He
was just involved with raising money."
Walsh has insisted he knew nothing about any wrongdoing and said he was devastated by the
swindle.
His lawyer said Friday he has yet to read the book, which will be on store shelves Monday. But
Alan Lenczner disagreed with the conclusion the salting was done right at Busang.
He pointed to an investigation commissioned by Bre-X and carried out by forensic investigators that
concludes the tampering was done elsewhere.
"To my knowledge, the salting did not take place on site," Lenczner said. "It took place in a
warehouse at Samarinda, which is six or eight hours downriver by boat."
Danielson, who wrote the book with geologist and Northern Miner staff
writer James Whyte, said the Samarinda warehouse was not rented by Bre-X
until last year.
In the meantime, she said, gold was mixed in with core samples and tested at the camp's
well-equipped sample preparation lab.
"It was pretty big and quite sophisticated," she said. "It had everything.
"In other words, they could do their assays before they sent them off for independent assaying.
There's no question the salting started right on site."
The building and its contents were videotaped by Nesbitt Burns Inc. mining analyst Egizio Bianchini
during a tour of the site.
Danielson said she was alarmed as soon as she saw the tape, which was broadcast on CBC-TV's
show Venture.
"If I had seen that [first-hand], I would have freaked. Had I known that had existed, I would have
been shaken to the core. That meant they were preparing their own samples."
Bianchini, one of Bre-X's biggest cheerleaders on Bay Street, has been named in several
class-action lawsuits launched by angry investors. He has refused to comment on the swindle.
Nesbitt Burns said Friday it would not comment on the book.
Danielson said the presence of two metallurgists, Rudy Vega and Jerry Alo, should also have tipped
people off. "You don't have metallurgists on site. Their function is to find the ways to take gold out of
a rock. [They were used] to find ways to put gold into a rock.
"They do not belong on an exploration site. There was no mine in production. There was no
metallurgy. It's a red flag."
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