Bre-X: Gold Today, Gone Tomorrow, Anatomy of the Busang Swindle

by Vivian Danielson and James Whyte

Book Overview

Book by Vivian Danielson, James Whyte This description may be from another edition of this product.

• Format: Hardcover
• Language: English
• ISBN: 1552570037
• ISBN13: 9781552570036
• Release Date: November 1997
• Publisher: The Northern Miner
• Length: 304 Pages
• Weight: 1.54 lbs.

Customer Reviews

An account worth more than the imaginary deposit

This book is a well-researched, coherent and logical account of a gold-mining scam that literally rocked the foundations of the mineral exploration industry in the mid to late 1990s, and caught up in its maw the spectrum of individuals who make their living from exploring for, bankrolling, analyzing, developing and producing gold. It is above all a tale of how previously honorable people succumbed to the twin temptations of outright greed or wishful thinking.I have some technical qualifications to assess the value of the book. I was an ore reserve geologist at a large gold mine in northern Nevada from 1988 thru 1997 responsible, during the last 5 of those years, for posting and interpreting thousands of assays to rectified, controlled cross-sections in a large open pit (approx 3 mi x 1 mi by 1900' deep in ultimate design). My work required constructing hundreds of orthogonal N-S and E-W sections in a commercial mine-modeling software program, and these sections were checked against plan maps over a 1900' vertical interval represented by 95 invidual benches of 20' height.In early 1997, when Bre-X started making its assays from Busang (the deposit location in Indonesia) available on its web site, I took a look at them and reached conclusions similar to those of Merks, a Dutch statistician quoted in the book. Namely, the assay runs were inconsistent with any conceivable pattern of gold mineralization I had ever seen in 2,000 drill holes in a very productive gold environment.At our mine, which was large, well-endowed with widespread sediment-hosted disseminated gold and occasional 'nugget' effects in fractures, the striking thing about the gold occurrence was how much barren rock can exist in a well-mineralized system. I had looked at literally thousands of down-hole assays, and knew that a huge deposit is possible even in the midst of much waste. Therefore, the extensive runs of mineralization at Busang appeared spurious or exaggerated on its face, and the occurrence in the same location of both low-grade and high-grade streaks was completely contrary to the behavior of gold we had seen in both host shales soaked in gold-bearing solutions, and in the occasional fracture-controlled settings in the same locality. I came in the next day to the office and said flatly that, although I didn't know what was at Busang, if anything, the assays being reported were garbage and not to be believed.The scam - which was achieved by implementing rigorously systematic but surreptitious salting of samples at a field preparation site - fell apart in early 1997 when other players interested in acquiring the assets, including members of the ruling Indonesian family and major mining companies, began to demand confirmation of the reported results, and could not obtain any.The only winners in the story were the thousands of stockholders and speculators who rode Bre-X stock up and sold out before its peak; the losers were all the serious long-term investors, and a huge numb

Hurriedly but not badly put together. Editing is poor.

Other than the obvious exculpation of the authors and their Northern Miner for having been taken in as much as anyone, the book should be required reading for those involved in exploration and financing. Northern Miner also contributed as much as anyone to spreading the hype on Bre-X stock, and many small investors who relied on the newspaper as an accurate and reliable source of information not otherwise available to them got badly hurt. So the authors themselves are not free of blame. The deep involvement of industry leaders - Barrick Gold, Placer Dome and FreeportMcMoran - in the self-servingly and intensely publicized bidding wars for control of Bre-X and the Busang property is inexcusable. Their respective CEO's and Boards should have known better. The damage of the Bre-X fraud and all those even peripherally involved in it to the mining industry, particularly to the independants in the exploration end of the business is incalculable. So the "jury remains out." If from only the standpoint of having an unfolding story in one place, the book is a very good and worthwhile read.