Gold: The movie about the Bre-X mining scandal that ‘isn’t about Bre-X’ – by Sunny Freeman (Financial Post – January 20, 2017)

It has all of the elements befitting a classic Hollywood tale: mystery, adventure, treasure, greed, corruption, betrayal, exotic locales, plot twists and … gold.

Gold, opening in theatres across Canada on Jan. 27, is the story of a brash, chain-smoking, pot-bellied mine prospector whose dream of finding the motherlode is all-consuming. Down and out, he meets a rugged geologist, a fabled “river walker,” who convinces him to visit Borneo, Indonesia, and ultimately buy a property deep in the jungle.

They strike gold, big-time investment bankers and multinational miners come calling, their fortunes soar and suddenly they are the kings of the industry. That is until the dream suddenly turns to nightmare when their gold strike is discovered to be fraudulent since their samples are salted with river gold.

Sound familiar? Gold just so happens to be — as the movie posters say — “based on a too good to be true story.” Most Canadians will think it’s based on the $6-billion Bre-X Minerals Ltd. stock-market swindle of the 1990s, the country’s most notorious scandal. But for legal and mass-appeal reasons, the company in the film is not Calgary-based Bre-X, but fictitious Reno, Nev.-based Washoe Mining Inc.

Though Canadians have long said the Bre-X story played out like a movie script, like most Canadian legends, its juicy plot was little known outside the mining community south of the border.

To recap, David Walsh, the penny stock promoter of Bre-X, bought a property near the Busang River in Borneo on the advice of well-respected geologist John Felderhof, and then hired a project manager, Filipino geologist Michael de Guzman, who made the first glittering estimate of the site’s potential. Eventually, it was claimed the site held 70 million ounces of gold.

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