The Six Billion Dollar Gold Scam: 4. Prospector of the year

Summary

World of Secrets: The Six Billion Dollar Gold Scam - Episode 4: Prospector of the Year

Release Date: March 17, 2025

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Introduction

In the thrilling fourth episode of BBC's "World of Secrets" titled "The Six Billion Dollar Gold Scam: Prospector of the Year," host Suzanne Wilton delves deep into one of the most audacious frauds in mining history. The episode meticulously unpacks the Bre-X scandal—a tale of deception, greed, and the relentless pursuit of wealth. Listeners are taken on a journey from the dense jungles of Indonesia to the corporate boardrooms of Canada, uncovering how Bre-X manipulated geological data to orchestrate the largest goldmine fraud of all time.

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Background of Bre-X and the Busang Site

Bre-X Minerals, a Canadian mining company, announced in 1995 a groundbreaking gold discovery in Busang, Indonesia. The news sent stock prices soaring as investors worldwide flocked to stake their claims. However, the euphoria was short-lived. The intrigue deepens when Bre-X's chief geologist mysteriously died in a helicopter crash, leaving unanswered questions about the legitimacy of the gold findings.

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The Investigation Team: Joe McPherson and Dave Potter

Enter Joe McPherson and Dave Potter, geologists from Freeport, who were tasked with verifying Bre-X's claims. Their mission: to conduct independent drilling to authenticate the gold deposits in Busang. Their first encounters with Bre-X's team, including CEO John Felderhoff and geologist Michael de Guzman, set the stage for the unfolding drama.

Notable Quote:

"We tried real hard to make them part of the team. We even had some hats made that were half Bre-X, half Freeport FCX. Just trying to get everybody to be part of it."
— Dave Potter [10:12]

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The Initial Suspicion and Red Flags

As McPherson and Potter delved into the operations at Busang, several red flags emerged:

1. Destruction of Records: A mysterious fire destroyed critical files, including drill logs and maps. Official statements blamed an electrical short circuit, but rumors of sabotage persisted.

2. Unusual Operational Practices: Freeport noticed discrepancies in core sample handling. Contrary to standard practices mandated by the U.S. Securities Exchange Commission (SEC), Bre-X ground all core samples for assaying, leaving no physical evidence for verification.

3. Inconsistent Geological Data: When Freeport conducted twin drilling—drilling adjacent holes to verify Bre-X's findings—the results were dismal. No gold was found, contradicting Bre-X's claims. Furthermore, unexpected silver presence in trenches raised further suspicions.

Notable Quote:

"Normally you keep what we would call a skeleton, maybe an 8 to 10-inch piece of whole core. And the surprising thing with what they were doing was that they ground all of it up to assay, which is not normal practice."
— Dave Potter [12:21]

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Uncovering the Fraud Behind the Scenes

The tension escalated when assay results from both Bre-X's Jakarta lab and Freeport's independent lab in Samarinda returned null for gold—a stark contrast to Bre-X's reports. As the realization dawned that Bre-X might be fabricating data, internal friction and paranoia took hold.

During the 1997 Prospectors and Developers Association (PDAC) convention in Canada, revelations poured in:

• Michael de Guzman's Deteriorating Behavior: Found partying late into the night, de Guzman was instructed to return to Busang to address the discrepancies.

• Jim Bob Moffat's Confrontation: As the first to report the fraudulent findings, Moffat confronted Bre-X's CEO, David Walsh, leading to heated exchanges and a cover-up attempt by Bre-X's leadership.

Notable Quote:

"I was shocked. I was kind of in a state of shock."
— Joe McPherson [23:58]

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The Aftermath: Reactions and Consequences

With the damning evidence mounting, Bre-X's façade began to crumble. The once-celebrated "Prospector of the Year" award now became a symbol of the industry's gullibility. Investors faced colossal losses, and Bre-X's reputation was irreparably tarnished.

Michael de Guzman's actions and the internal dynamics within Bre-X highlighted the lengths to which individuals and corporations might go to maintain a lucrative illusion. The scandal served as a cautionary tale about the importance of transparency, due diligence, and ethical practices in the mining industry.

Notable Quote:

"His first comment was kind of a rude thing... he wasn't really focusing too much on what we were talking, talking to him. He just said, that can't be. I don't believe it."
— Dave Potter [29:35]

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Notable Quotes

1. Dave Potter on Team Integration:

   "We tried real hard to make them part of the team. We even had some hats made that were half Bre-X, half Freeport FCX. Just trying to get everybody to be part of it."
   [10:12]

2. Dave Potter on Bre-X's Assaying Practices:

   "Normally you keep what we would call a skeleton, maybe an 8 to 10-inch piece of whole core. And the surprising thing with what they were doing was that they ground all of it up to assay, which is not normal practice."
   [12:21]

3. Joe McPherson on Discovering the Truth:

   "I had to go downstairs and get the facts... I was shocked. I was kind of in a state of shock."
   [23:38 & 23:58]

4. Dave Potter on Confronting David Walsh:

   "I called him up and said, well Jim Bob, there's nothing there. And I got to give the man credit, he just said, are you sure, Potter? And I said, yes sir, I am sure. And he hung up. That was it."
   [25:37]

5. Jim Bob Moffat on the Bre-X Confrontation:

   "And so they left. They left the job site and left all these young Filipinos out there. We had nobody in charge. And we're out there sitting on this goddamn pat a cake."
   [27:55]

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Conclusion

"The Six Billion Dollar Gold Scam: Prospector of the Year" serves as a gripping exposé of corporate fraud and the catastrophic consequences of unchecked ambition. Through meticulous investigation and firsthand accounts, the episode sheds light on the Bre-X scandal's intricacies, revealing how deceptive practices can lead to monumental financial losses and shattered lives. This narrative not only captivates listeners with its suspense but also underscores the paramount importance of integrity and transparency in the pursuit of success.

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Produced for the BBC World Service and CBC by BBC Scotland Productions.

Transcript

[Joe McPherson]

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[Dave Potter]

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[Suzanne Wilton]

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[John Felderhoff]

From the BBC's investigations podcast World of Secrets here's the fourth episode of our guest season, the $6 billion gold scam from the BBC World Service and CBC over to Suzanne Wilton. In early 1997, a fax arrived at Bre X's Jakarta office for John Felderhoff. It was from Michael de Guzman, 854 miles away at the exploration site in Busang. It read, Sorry to disturb you, but our geology building got burned down last week. The fire at the Busang camp destroyed the survey office, an administrative office, and a break room. Numerous files were lost, including drill logs and maps.

[Dave Potter]

One of the investment bankers, who was really trying very hard to be involved with all of this, had arranged to visit the site and wanted to inspect the core samples. And there was a mysterious fire that shut everything down for a while.

[John Felderhoff]

Paul Murphy, the Indonesian vice president for Freeport, Bre X's new partner, never really questioned how the fire got started.

[Dave Potter]

There was so much going on at the time about the Brex frenzy that that was kind of lost in the shuffle.

[John Felderhoff]

Officially, Brie X blamed the fire on an electrical short circuit caused by a power surge. But John Felderhoff circulated another rumor. The fire could in fact be someone playing dirty tricks. Earlier that evening, he'd spotted a helicopter circling overhead. No one ever got to the bottom of how the fire started, but those lost Files, the records from all of Bre X's gold drilling. There weren't any copies. They were gone forever. It was amidst that chaos that Freeport sent a small team to the site in East Kalimantan. Their job was to prove once and for all whether Briex's gold really did exist. I'm Suzanne Wilton and from the BBC World Service and CBC, this is the $6 billion gold scam. A story about the lengths people will go to in pursuit of getting rich and how greed can obscure the trut. This is episode four Prospector of the Year. Geologists Joe McPherson and Dave Potter were part of the Freeport team sent to Busang. Their plan was to do their own drilling to verify Bre X's findings. First, they flew into the nearby city of Balikpapin to meet with Felderhof and de Guzman. Joe McPherson remembers that meeting.

[Joe McPherson]

So we met them in the hotel that night. We were down in the bar and having a couple of drinks and Dave Potter had to get up and go back up to his room. And we were, you know, it was all very cordial at the time. Everybody was laughing and joking and having a great time. And Potter was gone for a long time. And he came back down, he sat down again beside me and said, well, what's going on? He said, well, somebody broke into my room. Really, Dave? Yeah. He said it was really weird because they didn't. I had a pile of money sitting on the desk. They never took it. But someone had broken into his room.

[John Felderhoff]

Was he concerned?

[Joe McPherson]

Not at the time. Retrospectively, yes, because we realized that they were probably looking for notes or something and trying to figure out what our plan was. And they being the unknown, they. I don't know who exactly. Okay. But clearly someone broke in and it wasn't anybody that we were down there with. So it wasn't Deguzen, it wasn't Feldorhof.

[John Felderhoff]

What do you think that they could have been looking for?

[Joe McPherson]

Well, they obviously weren't looking for money because Dave had, I think 10 or 12 million rupiah sitting on the table there in plain sight and it wasn't touched. He said he thought his notebook had been looked through.

[John Felderhoff]

And how could they use that information or what might that be important for?

[Joe McPherson]

Well, perhaps it would give them an idea of what our plans were, where we would go and what part of the property we'd want to visit, if we wanted to look at Drill Corps, if we were going to make deep dive on the labs. That was all that would have all been in. Dave's notes to some degree. And for knowing Dave, it would have just been a point for him, you know, okay, like we're gonna need to do this, this, this and this.

[John Felderhoff]

Unsettling for sure. But they shook it off and carried on to the Busang site. While flying over the jungle canopy and into the camp, Joe McPherson remembers getting a feel for the place once again.

[Joe McPherson]

We flew in in a helicopter and landed at the helipad. And there were buildings there where some of the core was theoretically stored.

[John Felderhoff]

Core are small cylindrical samples taken from a mine to double check the quality and amount of gold.

[Joe McPherson]

It was quite a large camp, a lot of dormitory type thing. A nice big canteen for people to eat. And the main house was where Felderhof and de Guzman lived. And it had a porch and it would look out over the bre x area down in the valley and there was, you know, lots of chairs and couches and stuff. They would entertain all the visitors there.

[John Felderhoff]

John Felderhoff and Michael de Guzman had made their own way from the hotel in Balikpapin to the camp and met them on the veranda.

[Joe McPherson]

So of course, out came the beer again. And it turned into quite a session that, that afternoon we sat there with probably for about three hours. Felderhoff was very ebullient, okay, very excited. He was running off, showing us pictures of his new Ferrari, his new red Ferrari and his beautiful house and somewhere in the Hamptons. I don't know where it was exactly, but he was, he was very excited to have us there. And as the beer started to flow a little, a little bit more, people were yakking more and more. De Guzman was very quiet through most of this, I must say. And I noted that to Colin, who was sitting beside me.

[John Felderhoff]

Colin Jones was another member of the team from Freeport who joined McPherson and Potter at the site.

[Joe McPherson]

Later in that afternoon, Colin, myself and Felderhoff got into a bit of a conversation and Felderhoff came out of the blue and said, what would you do if you drilled holes and didn't get any gold? And Colin, of course, at that point we were very excited and we said, ah, well, it must have been a mistake at the lab or, you know, we kind of laughed it off.

[John Felderhoff]

Felder half assed her.

[Joe McPherson]

How fast it.

[John Felderhoff]

And at this point you hadn't done any of the drills.

[Joe McPherson]

We were just there first day. We hadn't even unpacked our bags.

[John Felderhoff]

And did that trigger you at all or.

[Joe McPherson]

We wondered about why he would ask that. But again, we kind of, you know, said, oh, no, it's probably, you know, have to check the lab. Maybe there was a screw up in the lab because that does happen. But it was just a very, very strange question to ask. And we both commented to each other later that, yeah, this was, that was kind of weird. Dave had notified John and Mike and de Guzman that we were going to do twin holes. Now, a twin hole is basically if this is their drill hole, we would come in and drill another hole ourselves right beside it in order to check. Because there was no core from the original drill hole, we really had no choice. And that's a commonly accepted procedure for any due diligence. You know, you always twin a number of representative holes.

[John Felderhoff]

And did they seem resistant to that idea?

[Joe McPherson]

No, not resistant, but just not super cooperative either.

[Dave Potter]

The jungle is surprisingly quiet. Believe it or not. The only bad part of the jungle is so hot. Oh, it's hot. You walk outside and you're just covered in sweat and so you're constantly wet. And everything you touch seems to have a thorn. And the mosquitoes are unbelievable.

[John Felderhoff]

This was Dave Potter's second trip to Busang. As Freeport's head geologist, he'd gone out there a few weeks before the deal was made to check out the site. Not drilling, just to look around.

[Dave Potter]

The camp was on the side of a hill, kind of went down into a valley, and they had a nice camp. See, that's the other thing. Exploration geologists like to get out far, far away from anybody because nobody comes to see what you're doing.

[John Felderhoff]

Dave Potter had a lot of geological experience and he was skeptical about the amount of gold in Busang, but he was prepared to be proved wrong.

[Dave Potter]

You know, I went out with a clean slate. I thought, okay, Freeport's got involved in this thing. I'm a little leery, but okay, they're gonna be our partners. Let's, you know, fold them into the embrace here. And tried real hard to make them part of the team, our team. I tried real hard to make us part of their team. I even had some hats made that were half half BRE X Freeport fcx. Just trying to get everybody to be part of it.

[John Felderhoff]

On Dave Potter's first trip, he'd found a well run and busy camp. But this visit was different.

[Dave Potter]

How do I explain this? It just got kind of quiet before. It was a lot of activity, a lot of people running around. And then when we got out there to do the work, it kind of got quiet. There wasn't quite as many of the higher ups around and you had to look for the main guys, they were hard to find. And I started talking to some of the young geologists out there, gave us a lot of information, a lot of help. And then, you know, you start getting this. It sounds silly, but you get kind of a creepy feeling something just isn't right. That's when things started to get interesting for us.

[John Felderhoff]

And then a red flag.

[Dave Potter]

I wanted to look at some of the core that was in the sheds there. I was a little disappointed because there wasn't a lot of core. I was somewhat surprised that they didn't have more examples of what they were drilling because they just drilled thousands of meters of rock and it should have. I was surprised that there wasn't more core available to look at.

[John Felderhoff]

Standard practice is that you keep 50% of the core drilled. The U.S. securities Exchange Commission, the SEC, who helps prevent fraud, require it in case there's ever a question over results.

[Dave Potter]

Normally you keep what we would call a skeleton, oh, maybe a 8 to 10 inch piece of whole core. And the surprising thing with what they were doing is that they ground all of it up to assay, which is not normal practice.

[John Felderhoff]

Assaying is the process of determining the purity of gold in a sample.

[Dave Potter]

I question that a little bit. I had been told by both de Guzman and some of the geologists is that the gold was so touchy that they had to ensure that they got all of it by grinding up the entire core. But they assured me it was okay because they took pictures and described the rock. And I was again, I was a little hesitant about that because you run into problems with the SEC if you do that.

[John Felderhoff]

Dave Potter went to visit the lab in the city of Samarinda. 200 miles or 300 kilometers through dense jungle from Busang. This is where BRE X were sending the crushed rock samples to be tested for gold. What he found there made him even more concerned.

[Dave Potter]

The guy at the lab, a good lab man, good, honest man, ran a good business. And he commented to me, he said, you know, it's kind of funny here we get these cores in plastic bags and when we dump it into the crusher to be crushed up, he said, they make us wash the bags out. And I started talking to him about, well, they grind up all the core. And he said, yeah. And he said, I don't know why they want to do that. And we started talking back and forth. And that feeling got worse, that tense feeling, because I think the guy at the lab was trying to tell me that he thought something was funny too. But he didn't want to break up the client confidentiality thing that he had with BRE X. And he didn't want to be pointing fingers, but he was a little uneasy about the whole thing as well. He kind of looked at me and said, you know, maybe you want to check this, Dave?

[John Felderhoff]

Joe McPherson was also running into difficulties in other areas.

[Joe McPherson]

The team that was looking after data management, I wouldn't say they were resisting my questions, but they weren't openly saying, well, here it is kind of thing. So that made me start to wonder, well, why aren't they just giving this to me? And when I say this, I mean drill geology logs, laboratory analytical results, geotechnical portions of the geology, anything that had to do with the geology and understanding the gold deposit.

[John Felderhoff]

And then another red flag.

[Joe McPherson]

Then we went out to the field with, I think it was Colin, myself, Potter, Felderhoff for sure, and I think de Guzman in the main zone, southeast zone. They had basically cleared off all the trees and exposed the outcropping rocks and had done some sampling, which you normally do in any kind of an exploration project. We asked John Felderhoff, well, John, so what grades did you get out of these trenches? And John says, oh, we didn't get any gold, but we got lots of silver. I thought, okay, now, Geology 101 here. Gold is basically what we call immobile. It doesn't move very far. Silver will. Silver will actually move over time as a result of weathering processes. So if anything, you would expect the gold to still be present in those trenches. And Colin and I looked at each other and then the light started to go on. At that point we said, this doesn't make any sense.

[John Felderhoff]

So by this time, you're starting to get a pretty good inkling that something's not right here.

[Joe McPherson]

Something is. Yeah, something's not right.

[John Felderhoff]

Joe McPherson and Colin Jones knew that if there was any gold, they should have seen some evidence of it in the trenches. The Freeport team persevered with their due diligence to check Brie X's results. Dave Potter made every effort to match where and how he was drilling so that his drill core would be identical to BRE X's.

[Dave Potter]

I like to call drill rigs a geologist's lie detector, because do you really think we know what's going on 300 meters below the ground? We like to think we do, and we get all excited about it. But at the end of the day, it's that drill rig that tells you whether you have it or not. And our drill rigs, the drill rigs and we use the same drill rigs that the BRE X people were using. They drilled those holes. We were getting the right rocks.

[John Felderhoff]

Same holes, same rocks, different results. Dave Potter sent the drilled core to the same lab in Samarinda used by BRE X. The first results were not good. No traces of gold were found.

[Dave Potter]

We started going, uh, oh, what's going on here? So that we changed a few of the drill hole locations. We actually took a drill and set it like, oh, I think about three or four feet away from an existing hole and drilled right beside it to make sure that we hadn't missed something by doing a scissor hole, that one came back dead. And while all this was going on, things got harder and harder to get done there at the camp. People started disappearing. De Guzman disappeared.

[John Felderhoff]

After these poor results from Samarinda, Dave Potter sent the final drill samples to Freeport's own assay lab in Jakarta. This would be the clincher. Struggling to get out of bed? It might be time for an upgrade. Leesa makes exceptionally comfortable mattresses designed for every body and bud budget. But what truly sets them apart is their commitment to giving back. Since 2015, they've donated over 41,000 mattresses nationwide. Elevate your sleep and your space with Leesa. Go to Leesa.com for 20% off their award winning mattresses plus an extra $50 off with promo code iHEART. That's L-E-E-S.com promo code iHEART for an extra $50 off. This is Jenny Garth from I Do Part 2. You could have lost 10 pounds already if you started one month ago. So are you ready to start today? Find out if weight loss meds are right for you in just 3 [e-mail] tryfh.com Results vary based on start weight and adherence to diet, exercise and program goals. Data based on independent studies sponsored by Future Health. Future Health is not a health care services provider. Meds are prescribed at provider's discretion with.

[Michael de Guzman]

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[John Felderhoff]

As the drill results were being tested back In Jakarta, the 1997 Prospectors and Developers association convention was being held back in Canada. This is the mining industry's annual gathering and John Felderhoff was due to receive the Prospector of the Year award. The season CEO of BRE X, David Walsh, joined John Felderhoff and Michael de Guzman, plus his group of Filipino geologists who'd flown in from Busang. The Bre X3 should have been feeling bullish. Bre X's vice president, Brian Coates remembers de Guzman and Felderhoff introducing their gold discovery. This year they were being crowned as kings.

[David Walsh]

1997 was more of coronation with the transaction that had occurred. So they were rock stars. That's the way I would describe it.

[John Felderhoff]

He and John were riding high though, at that point.

[David Walsh]

But I mean, you know, again, they were rock star. They had discovered they were amongst their peers. They were heading and out of the park right from day one. So pretty amazing. And that's why they had the status they had within a convention of explorers and promoters.

[John Felderhoff]

How colorful was Michael de Guzman?

[David Walsh]

He had a Nora around him and Felderhoff and the rest of the team had sold that this guy was really smart, high iq. Leave him in his bubble so that he could think about his whole aspect there. Don't disturb him. It's like a successful athlete. You live with their quirks because they're talented in certain things. So you say, you know, don't mess up the recipe.

[John Felderhoff]

Joe McPherson had also made his way out of the jungle and back to Canada to attend the conference. He was anxiously awaiting the results from the last round of core samples and tried to remain professional.

[Joe McPherson]

Walsh was there with all his sons and all the investors. It was a big deal. Everybody was, you know, back slapping and congratulating each other and all that kind of stuff. And I was trying to stay in the background. They kept trying to drag me in. So I was there and I was kind of mixing with them, but trying to keep my distance as well because, you know, there's like six billion dollar tag hanging out there on the chairs and that. So now I just kept my distance. I was cordial and I met with him a couple of times. One time I met de Guzman in the Royal York Hotel, which is the main kind of the meeting place. They have a mezzanine level and it's got a railing around it. I came out of the elevator one evening, I think it was Monday night, and there was de Guzman. He had his head down and he was like, leaning over the railing. He looked very unhappy. So I went over to him. I said, michael, what are you doing? Are you feeling all right? He says, oh, yeah, yeah. I just got a lot on my mind. I said, okay. And then I walked away. I didn't hang around.

[John Felderhoff]

On the Monday, after chatting to de Guzman on the mezzanine, Joe McPherson decided to go back to his hotel room.

[Joe McPherson]

I guess around 5:30, I got a call from Jakarta, and it was a geologist who looks after all the analytical results. She's a very smart lady, but she's very timid. And she on the phone, she says, Pa, Joe, Pa. Joe, I'm really sorry. I said, why are you really sorry? Well, the assays came back and there's no gold. So I'm sitting on the side of my bed in the room of the Royal York, and I'm holding a $6 billion secret in my hand.

[John Felderhoff]

Wow.

[Joe McPherson]

I had to go downstairs. I actually had to go downstairs and get the facts, because back in those days it was facts, right? So I got the facts and I looked at it and I went, holy shit. And then I said, I don't think I'm going back down to the Prospect of the Year award. So I bailed.

[John Felderhoff]

Do you remember how you felt in that moment?

[Joe McPherson]

I was shocked. I was kind of. Yeah, I was. I was. I was in a state of shock.

[John Felderhoff]

But there you are in Toronto. John Felderhoff is about to give a speech as prospector over the year, and you're holding the secret.

[Joe McPherson]

Yeah, I had the secret at that point.

[John Felderhoff]

Did you tell anyone?

[Joe McPherson]

No, I couldn't. You know how many people's lives I would have ruined at that time? You know, it was. It was not good. I was in a very, very difficult position. But I talked to Dan and I said, look, I'm not going to say another word. I'm getting the hell out of here. And I said, yeah, that's right. Just get out. Go.

[John Felderhoff]

Dave Potter was the first person to receive these negative results from Freeport's lab. And while Joe was reeling from the news, Dave was already on a flight from Busang to Jakarta.

[Dave Potter]

Well, the first person I had to talk to was Jim Bob. And I gotta tell you, that was one of the hardest telephone calls I've ever made in my life. I had to call him up. And there was always the potential that this was real and that we were sitting on one of the largest gold deposits that the world had ever found. And Freeport was involved for, like, pretty good percentage of it. And Jim Bob Was, I think he was hoping against hope that it was real. I agonized for about an hour before I finally picked the phone up that night, it was about 2:00 in the morning and called him up and said, well Jim Bob, there's nothing there. And I got to give the man credit, he just said, are you sure, Potter? And I said, yes sir, I am sure. And he hung up. That was it.

[John Felderhoff]

After that call, Jim Bob went looking for answers.

[Dave Potter]

He started asking questions which would be kind of like having a 5 ton boulder drop on your head to have Jim Bob talk to you. So.

[John Felderhoff]

Freeport's reputation and his own was on the line, not to mention the lives of all the investors. He needed to speak to Bre X's CEO David Walsh. So we picked up the phone over at the Prospectors convention. A litigation lawyer named Alan Lentzer happened to be in David Walsh's hotel room with John Felderhoff when the call came in from. From a furious Jim Bob Moffat.

[Suzanne Wilton]

Anyway, so while we're sitting there, the most astonishing thing happens. The phone rings and David picks it up because it's his suite and I can only hear one side of the conversation, but it's Jim Bob Moffat was calling and from what I could ascertain he was telling David Freeport McMorran, which was his company, had drilled some holes adjacent to the holes that BRE X had drilled and they recovered core. They'd taken the core to the assay lab and there was no gold. And it was David's reaction which really stunned me because he said what? What are you talking about? Of course there's this is impossible in.

[John Felderhoff]

The Brie X tapes, Jim Bob Moffat recalls this phone call with David Walsh to Richard Behar who was writing an article for Fortune magazine.

[Joe McPherson]

And then you called Bre X, you spoke to David?

[Jim Bob Moffat]

Yeah.

[Joe McPherson]

Did you speak to him right away?

[Jim Bob Moffat]

Yeah. Yes. I wouldn't let that. I wouldn't sit around with something like that. No, I know, but, but see the problem, Richard.

[Joe McPherson]

But you said you couldn't get him anyone out there from Griegs?

[Jim Bob Moffat]

Yeah. Well, guess what. Guess where they all were the night after the damn phone call. All of their senior people were in Toronto because Feldenhoff and David Walsh were receiving the Prospect of the Year award. Even de Guzman was there.

[Joe McPherson]

I spoke to them that week, you see. Yeah.

[Jim Bob Moffat]

And so they left. They left the job site and left all these young Filipinos out there. We had nobody in charge. And we're out there sitting on this goddamn pat a cake. And I told David, I. I said, david, we've got a problem here. And I'm talking to a guy who starts the conversation about me saying, look, I don't know anything about all this technical stuff. I'm just a money raiser. And some of us just keep saying, you guys must be confused. I said, we may be confused. I'm not going to tell you anymore over the telephone. I'm asking you to get somebody out here who can go over this data with us so you can understand the problem.

[Suzanne Wilton]

The conversation went on for a little while, and David said, we'll check this out right away. Said, I'll get back to you, and put the phone down and turned to John and said, john, where is de Guzman? Where is he? Get him back here as fast as you can.

[John Felderhoff]

Then it was Dave Potter's turn to speak with Walsh and Felderhoff.

[Dave Potter]

I called him up and wanted to talk to him and said, you guys. And this was the night they gave their acceptance speech for that award, which I thought was kind of ironic. I said, you guys need to get back out here and explain why we can't find any of the gold that you claim you have. His first comment was kind of a rude thing. He was caught up in the moment of the award. So he was. He was riding a high at that point in time, and he wasn't really focusing too much on what we were talking, talking to him. He just said, that can't be. I don't believe it.

[John Felderhoff]

As Felderhoff walked to the award podium to the theme music of Raiders of the Lost Ark, in front of a room full of promoters, investors, and developers, all oblivious to the drama unfolding. Michael De Guzman was found partying hard in one of Toronto's strip joints. Walsh and Felderhoff wasted no time instructing De Guzman that he had to go back to Busang to meet with Dave Potter and answer why Freeport couldn't find any gold. So confident of Busang's gold, Felderhoff and Walsh tried to dismiss those early results. They never entirely trusted Freeport anyway, and they suspected they'd try to drive down the price of Bre X by discrediting their sampling. Over in Busang, Dave Potter had just blown up a $6 billion company, and he was anxiously waiting, waiting for De Guzman to return. Next time on the $6 billion gold scam. Tempers are getting frayed.

[Jim Bob Moffat]

I was so pissed off, I could eat.

[Joe McPherson]

I could eat dirt.

[John Felderhoff]

And the net begins to close around Michael de Guzman. De Guzman was caught like a rat in a trap. The $6 billion. Gold Scam is produced by BBC Scotland Productions for the BBC World Service and cbc. I'm Suzanne Wilton. Our lead producer is Kate Bissell Producers Anna Miles, Mark Rickards story consultant Jack Kibble White music and sound design by Hannis Brown additional sound design and audio mix by Joel Cox Executive Editor Heather Kane Darling at cbc, Veronica Simmons and Willow Smith are senior producers, Chris Oak is executive producer, Cecil Fernandez is executive producer and Arif Noorani is the director at the BBC World Service. Anne Dixie is senior podcast producer and John Manell is the podcast Commissioning editor. Thanks for listening.

[Michael de Guzman]

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