Bre-X
| Industry | Mining |
|---|---|
| Defunct | 2003 |
| Headquarters | Canada |
| Products | Minerals, metals, gold |
Bre-X was a group of companies in Canada. Bre-X Minerals Ltd., a major part of Bre-X based in Calgary, was involved in a major gold mining scandal when it reported it was sitting on an enormous gold deposit at Busang, Indonesia (in Borneo). Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a , its stock price reached a peak at CAD $286.50 (split adjusted) in May 1996 on the (TSE), with a total capitalization of over CAD $6 billion. Bre-X Minerals collapsed in 1997 after the gold samples were found to be a fraud.
Busang's gold resource was estimated by Bre-X's independent consulting company, Kilborn Engineering (a division of SNC-Lavalin of Montreal), to be approximately 71,000,000 troy ounces (2,400 short tons; 2,200 t). Reports of resource estimates of up to 200,000,000 troy ounces (6,900 short tons; 6,200 t) were never made by Bre-X though the property was described as having this potential by John Felderhof, Bre-X's Vice-President for Exploration, in an interview with Richard Behar of Fortune Magazine.
Bre-X's gold resource at Busang was a massive fraud. Encouraging gold values were intersected in many drill-holes and the project received a positive technical assessment by Kilborn. Crushed core samples had been falsified by salting with gold that has a wide variety of characteristics that had been subjected to mineralogical examination by Bre-X's consultants. In fact in an old report, found in Bre-X files, a mineralogist had reported that gold particles in Busang samples had the tell-tale darker yellow skin compared to the interior. This results from selective leaching of silver from the surface of gold particle during river transport, an indication that it was alluvial gold, not consistent with the drill core origin of the samples. The salting of crushed core samples with placer or supergene gold constitutes the most elaborate fraud in the history of mining. In 1997, Bre-X collapsed and its shares became worthless in one of the biggest stock scandals in Canadian history, and the biggest mining scandal of all time.
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