I nominate BRE-X MINERALS...5c to $290.00 and now it's ZERO on the biggest gold mining scam to hit the world...BTW, I lost big on it too:-(
What about Busang!
More than two weeks after the news that Freeport's confirmatory drilling at the Busang deposit in Kalimanatan had returned negative results the question as to whether this is the biggest scam in mining history is still open.
Busang - the phenomenal bonanza discovered by the small Canadian company Bre-X and subject of intense jockeying for control by political and corporate heavies - in the course of successive reports grew in apparent size into what was beginning to look like the largest potential gold gold mine in the world. Then, not long before the Freeport announcement, it was reported that the geologist responsible for its discovery had fallen from a helicopter to his death in mysterious circumstances.
Freeport McMoran, who had been appointed by the Indonesian government as the major company to take over the management of the project, carried out a due diligence program in an attempt to duplicate the results of Bre-X's exploratory drilling. This involved drilling close parallel holes. The report that these holes contained insignificant gold values was a market bombshell, bringing about a massive fall in the value of Bre-X stock and causing turmoil in the Toronto stockmarket. Computers failed to cope with the volume of trading as some $3 billion of share value was shed.
The timing - just before Easter - complicated matters. A modest recovery in prices was attributed to a belief that a worthwhile deposit is still believed to exist at Busang, but much of this recovery may be attributable to short covering (traders who got advance information from Indonesia of Freeport's negative assays would have made fortunes).
To any technical view the most damning information was that the appearance of the gold in the Freeport samples looked different. This immediately suggests that the core samples from the original holes were salted, probably with alluvial gold.
If it does turn out that Busang represents the biggest and most sustained mining fraud ever perpetrated the ramifications are extensive. The attractions of Indonesia as an exploration mecca are severely downgraded - with already apparent problems for capital raising and deals suspended, the Indonesian government loses face for having been fooled, the Canadian stock exchanges live down to their worst reputation , and the mining industry as a whole takes another dent in its image. There have been many attempts at salting core samples, not only with gold mineralisation, although gold is by nature the most obvious metal to try it on with, but none come to mind on this scale or of this duration. In the 1950's, when the Witwatersrand goldfields were being extended by deep drilling through 5000 feet of Karroo cover to find the gold bearing formations of the southern part of the basin in the Orange Free State, some of the closely guarded cores were salted successfully by agents of big stockmarket players. The resultant court case was a now almost forgotten legal cause celebré. But probably not one to match what is in store for Busang - even it does all turn out to have been a mistake.
Geo Resource Forum
www.geoforum.com.au Feb 10 1997
MM |
