Mining
Bre-X Scandal: A History Timeline
Bre-X Scandal: A History Timeline
Sponsored by: BDO and BDO Natural Resources LinkedIn Group
This infographic documents the rise and fall of Bre-X.
From initial private offerings at 30 cents a share, Bre-X stock climbed to more than $250 on the open market. Near the peak of Bre-X share prices, major banks and media were on board:
The Peak
- It was touted by media and banks as the “richest gold deposit ever”
- In December 1996, Lehman Brothers Inc. strongly recommended a buy on “the gold discovery of the century.”
- Major mining companies such as Barrick Gold, Placer Dome, and Freeport-McMoRan Copper & Gold, among other top producers, fought an epic battle to get a piece of Bre-X’s Busang deposit.
- Indonesia’s Suharto regime managed to grab 40% of the deposit for Indonesian interests.
- Fidelity Investments, Invesco Funds Group, and other mutual-fund companies piled into the stock.
- J.P. Morgan bankers talked up Busang in a conference call in which Bre-X’s top geologist predicted the deposit might contain a staggering 200 million oz of gold, worth over $240 billion in 2014 prices. Morgan declined to comment.
- Egizio Bianchini, stock broker and one of Canada’s top gold analysts, said “What most people are now realizing is that Bre-X has made one of the great gold discoveries of our generation.”
The Timeline:
1989: David Walsh founded Bre-X Minerals Ltd. in 1989 as a subsidiary of Bresea Resources Ltd.
1993: Walsh followed the advice of geologist John Felderhof and bought a property in the middle of a jungle near the Busang River in Borneo, Indonesia.
1994: Initial drill results were encouraging, and the drill program was ramped up.
1994: However, it was the project manager, Michael de Guzman, who was filing gold from his wedding ring and mixing the flakes in with the crushed core samples.
De Guzman used realistic ratios of gold to rock to not set off alarm bells, and to keep project going forward.
Over the next 2.5 years, de Guzman would buy $61k of panned gold from locals to use in salting.
Independent auditors that were sent in by large institutional investors found that the panned gold had rounded edges, but de Guzman explained it was because of “volcanic pool” theory.
De Guzman, Felderhoff and Walsh sell off a small portion of their options for $100 million
1996: Bre-X hits a snag with the Indonesian government, who claimed that Bre-X was not playing by the “rules” of the country. Bre-X’s exploration permits are revoked.
1997: January fire at Busang destroys many of the sample records.
1997: After many major miners express interest in Bre-X, eventually a joint venture is reached that gives Indonesia 40% share, Bre-X 45%, and Freeport McMoRan a 15% share of interests.
1997: Freeport begins due diligence on deposit and starts to twin holes that were already drilled.
1997: Freeport reports “minor amounts of gold” in some holes, but not much else.
1997: On his way to meet the Freeport due diligence team, de Guzman mysteriously falls to his death 600 ft from a helicopter. Police rule it a suicide.
1997: Shares of Bre-X crash.
1997: Report confirms that there is no gold at Busang, and samples were tampered with.
Technology
Visualizing the Critical Metals in a Smartphone
Smartphones can contain ~80% of the stable elements on the periodic table. This graphic details the critical metals you carry in your pocket.
Mining
Silver Through the Ages: The Uses of Silver Over Time
The uses of silver span various industries, from renewable energy to jewelry. See how the uses of silver have evolved in this infographic.
Silver is one of the most versatile metals on Earth, with a unique combination of uses both as a precious and industrial metal.
Today, silver’s uses span many modern technologies, including solar panels, electric vehicles, and 5G devices. However, the uses of silver in currency, medicine, art, and jewelry have helped advance civilization, trade, and technology for thousands of years.
The Uses of Silver Over Time
The below infographic from Blackrock Silver takes us on a journey of silver’s uses through time, from the past to the future.
3,000 BC – The Middle Ages
The earliest accounts of silver can be traced to 3,000 BC in modern-day Turkey, where its mining spurred trade in the ancient Aegean and Mediterranean seas. Traders and merchants would use hacksilver—rough-cut pieces of silver—as a medium of exchange for goods and services.
Around 1,200 BC, the Ancient Greeks began refining and minting silver coins from the rich deposits found in the mines of Laurion just outside Athens. By 100 BC, modern-day Spain became the center of silver mining for the Roman Empire while silver bullion traveled along the Asian spice trade routes. By the late 1400s, Spain brought its affinity for silver to the New World where it uncovered the largest deposits of silver in history in the dusty hills of Bolivia.
Besides the uses of silver in commerce, people also recognized silver’s ability to fight bacteria. For instance, wine and food containers were often made out of silver to prevent spoilage. In addition, during breakouts of the Bubonic plague in medieval and renaissance Europe, people ate and drank with silver utensils to protect themselves from disease.
The 1800s – 2000s
New medicinal uses of silver came to light in the 19th and 20th centuries. Surgeons stitched post-operative wounds with silver sutures to reduce inflammation. In the early 1900s, doctors prescribed silver nitrate eyedrops to prevent conjunctivitis in newborn babies. Furthermore, in the 1960s, NASA developed a water purifier that dispensed silver ions to kill bacteria and purify water on its spacecraft.
The Industrial Revolution drove the onset of silver’s industrial applications. Thanks to its high light sensitivity and reflectivity, it became a key ingredient in photographic films, windows, and mirrors. Even today, skyscraper windows are often coated with silver to reflect sunlight and keep interior spaces cool.
The 2000s – Present
The uses of silver have come a long way since hacksilver and utensils, evolving with time and technology.
Silver is the most electrically conductive metal, making it a natural choice for electronic devices. Almost every electronic device with a switch or button contains silver, from smartphones to electric vehicles. Solar panels also utilize silver as a conductive layer in photovoltaic cells to transport and store electricity efficiently.
In addition, it has several medicinal applications that range from treating burn wounds and ulcers to eliminating bacteria in air conditioning systems and clothes.
Silver for the Future
Silver has always been useful to industries and technologies due to its unique properties, from its antibacterial nature to high electrical conductivity. Today, silver is critical for the next generation of renewable energy technologies.
For every age, silver proves its value.
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