Bre-X – Of Course I Know Where Michael de Guzman Is!
A firsthand account of the $6 billion 1997 Bre-X Minerals gold fraud by Warren Irwin, Founder and Chief Investment Officer at Rosseau Asset Management Ltd. Rosseau was the top ranked hedge fund in the world in 2016 of 4,099 hedge funds tracked by BarclayHedge. Irwin made $millions long and short Bre-X, and was one of a few investors to attend a site visit to Bre-X’s Indonesian property before the biggest scam in the history of the gold sector unravelled…
The story of Bre-X was reborn after 20 years with the release of the movie “Gold” starring Matthew McConaughey in February 2017. The Bre-X fraud was brought to an end by a mining consultant, Graham Farquharson of Strathcona Mineral Services, who released on May 4, 1997 that its independent audit concluded a massive campaign of tampering and fraud without precedent in the history of mining.
The question remains to this day, what really happened to geologist Michael de Guzman, who reportedly fell from a helicopter on his way to Bre-X’s Busang gold property. By the end of this article, you will finally know the answer.
My story begins in 1991 with a trip to Indonesia following graduation from MBA school. Contrary to my classmates and professors at the time who were convinced the future growth engine of the world would be Russia, after the fall of the Berlin Wall, I headed to Southeast Asia where I believed the future of business activity was going to be.
My tour included Hong Kong, Macau, Thailand, Malaysia, Singapore and finally Indonesia where I was hosted by one of my former MBA professors who took a job teaching at a business school in Jakarta. My professor was kind enough to share his experiences of living and working in Indonesia and also lent me his car and driver to tour the slums and mansions of Jakarta, where in some cases they were right across the street from one another. It was clear to me, there were Indonesians making some serious money, and I had a feeling deep down in my gut that I knew I would be back someday to find my fortune.
Fast forward four years to 1995, where as a Director of Proprietary Trading at Deutsche Bank Canada, I first heard the story of Bre-X from our trading desk. The story intrigued me as it combined my interest in gold discoveries, seeded from the stories of Noah Timmins and his gold discoveries heard when I was as a kid living in Timmins, Ontario, and my recent experiences in the Indonesian archipelago… I had to learn more.
The pitch I heard from our trader was that one of his stockbroker buddies had loaded up with this junior mining stock called Bre-X Minerals for pennies a share and it had discovered gold in East Kalimantan, the Indonesian territory on the southern part of Borneo, and he was up millions. I researched the situation extensively, built a model of the ore body, plotted every drill hole and knew this would be a huge winner.
The heady days of the mid-1990s in the mining business were ripe to be exploited as investors were coming off a $4.3 billion win with Robert Friedland’s Diamond Fields takeover by Inco and they were eager to do it again. Greed was in the air and the timing for Bre-X’s discovery could not have been better.
For the rest of this article, click here: https://ceo.ca/@warrenirwin/2016s-top-hedge-fund-manager-relives-historys-greatest-gold-scam