Gold has been represented as wealth, status, glory and power for its participating years in the business world. Gold, as one of the most valuable of the precious metals also had been in relation with frauds for number of years. And the Bre-X fraud was revealed to be the largest gold frauds in history. International and local investors took heavy losses when the stock price plunged so much that it was eventually delisted off the stock exchange. This long-time recommended company presented disappointment and deep deception to the world, for the word "fraud" was not comparable to this company, Bre-X.
The Formation of The New Bre-X.
David Walsh first created Bre-X Minerals Ltd. in 1988. It started as a gold searching company in the Northwest Territories in Canada but by 1993, due to lack of luck and no gain, bankruptcy was declared. With $10,000 left from part of his Bre-X position, Walsh flew to Indonesia in search for opportunities abroad. He then met up with an old colleague, John Federhof, a geologist from the Netherlands. Federhof was first part of an Australian company, Jason Mining Ltd., but their search for gold in Indonesian land was unsuccessful. Federhof continued to believe in gold in Indonesia and claimed opportunities in a location in Indonesia to Montague Gold. Federhof told Walsh that he had discovered a large gold deposit in Indonesia and persuaded Walsh in investing in some property. Michael de Guzman was then hired and convinced to buy the site from Montague Gold. Afterwards, Walsh paid the initial payment of $80,100 (US) to Montague Gold for the purchase of the site.
On July 19, 1993 Bre-X closed the deal with Montague Gold with full purchase of the site Federhof believed to have large amount gold deposits. Busang, the 57,571 hectares of land in central Indonesian jungle was put into project operation as soon as the contract was reached. Federhof considered shutting down the operation after finding insignificant amount of gold deposits in the first few holes but it was found that additional holes retrieved sufficient gold deposits.
