Former Bre-X Minerals Ltd. geologist John Felderhof, a central figure in Canada’s largest stock market fraud, died on the weekend. Mr. Felderhof was vice-president of exploration at Bre-X when the tiny mining company reported finding a massive gold deposit in the jungles of Busang, Indonesia, in the 1990s, and went on a stock market tear.
Independent geologists exposed the claim as bogus, and Mr. Felderhof was charged with spreading false information and insider trading, but was acquitted in 2007. He died in the Philippines this past weekend at age 79 of natural causes, said his lawyer, Joe Groia.
“In many ways, John’s was a remarkable story,” Mr. Groia said. “He enjoyed enormous success before Bre-X. Most geologists think they are lucky to have one discovery. John found two major deposits.”
In the early stages of his career, Mr. Felderhof found copper and gold deposits that became producing mines, but he is best known for his central role at Bre-X. At its peak in 1996, the exploration play had a market value of $6-billion and Mr. Felderhof claimed the property in Indonesia contained more than 200 million ounces of gold with a value of $70-billion, which would have made it the world’s largest gold mine.
In 1997, a potential buyer for the mine investigated Bre-X’s site and found no significant gold. Consultants discovered Bre-X geologists faked drilling results by salting rock samples with gold from jewelry and flakes panned from nearby rivers. Mr. Felderhof was the only Bre-X executive to stand trial.
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