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MARKETANALYST.US / ECONOMY & WORK

A Billion-Dollar Gold Scam and The Mysterious Fall Of The Geologist Behind It From a Helicopter

Samples run by U.S. mining company Freeport-McMoRan showed no traces of gold.
PUBLISHED MAY 23, 2024
Cover Image Source: Representative Image | Pexels | Mine | Tom Fisk
Cover Image Source: Representative Image | Pexels | Mine | Tom Fisk

A land laden with so-called gold, three men, and a billion-dollar gold scam forever etched on investors' minds is none other than the Bre-X scam. The story was later made into a film in 2016 titled, "Gold", starring Matthew McConaughey, Édgar Ramírez, and Bryce Dallas Howard. The story already had enough enigma surrounding it, however, it gave people even more to talk about, when the mining company's chief geologist Michael de Guzman boarded a helicopter flight to a remote jungle site in Indonesia, a place he had traveled several times before, where he had reported finding the large gold site. However, on the morning of 19 March 1997, Guzman failed to arrive. As per reports, just 20 minutes into the journey, a rear door on the left-hand side of the helicopter opened, and Michael de Guzman allegedly fell into the dense foliage below.



The CEO later said that de Guzman had taken his own life after being diagnosed with hepatitis B and exhausted from fighting recurring Malaria. Canadian journalist Suzanne Wilton recently flew to the Calgary Herald to investigate De Guzman's death and later spoke to BBC about it. "I was sent halfway around the world...This story has haunted me ever since," she told the publication.

The story began with a Dutchman, John Felderhof, claiming that the remote site in Busang, in the province of East Kalimantan on the island of Borneo was an unchartered mine that he wanted to get to. In 1993, Felderhold struck a deal with David Walsh, who was the CEO of Bre-X Minerals. Felderhof later started ground operation with the help of fellow geologist and friend de Guzman. For the next three years, the work continued. The estimated amount of gold there grew like anything, as did the number of investors. The company which was eventually valued at C$6bn (US$4.4bn; £3.5bn), drew in billions of dollars of investments even from many Canadian individuals from small towns. However, the hype surrounding the gold rush was never aimed at standing the test of time. In early 1997, Indonesia's then-government ruled that such a small company should not be allowed to reap all rewards. They soon decided to join in and invited the U.S. company Freeport-McMoRan to take charge of the mining project. Upon, fresh investigations run by the Freeport-McMoRan, the results were shocking! The samples showed no traces of gold. This went on to prove cataclysmic for the investors.



Soon, Walsh and Felderhof were informed of the new data by Freeport-McMoRan. They instructed de Guzman, who was at a convention in Toronto, to return to Busang to meet the Freeport-McMoRan team to explain. De Guzman later traveled from Canada via Singapore where he spent time with his wife and kids for the last time.

According to Canadian journalist Jennifer Wells, De Guzman spent the last evening in Balikpapan city located 161 KM south of Busang mine. The coming morning, de Guzman along with Bre-X Minerals' employee Rudy Vega traveled by helicopter to Samarinda, another city closer to Busang. This is where he bid farewell to Vega and boarded a helicopter to travel to the mine however he soon made an unusual stop. He requested a stop-off at Samarinda—was odd as he would normally fly direct. By 10:30 local time on 19 March 1997, de Guzman was dead. His suicide note was later found on the helicopter. It took another week for the scam to be completely unveiled and soon the company was in ashes.

Walsh later died from a stroke in 1998 and a Canadian judge ruled that Felderhof had been unaware of the whole issue, and found him not guilty. However, there is still chatter surrounding de Guzman's death. It was later found that Guzman had spelled out his wives' names incorrectly in the suicide note, which raised suspicion.



Other sources said that Guzman's body found in the jungle had marks around his neck suggesting that he had died by strangulation. Even today, people raise their eyebrows when they hear the story of de Guzman, while his son believes that his father is still alive.

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