World of Secrets: The Six Billion Dollar Gold Scam – Episode 6: The End of the Bonanza

Released March 31, 2025

Introduction

In the sixth episode of Season 7 titled “The End of the Bonanza,” BBC’s World of Secrets delves deep into one of the most notorious financial frauds in history—the Six Billion Dollar Gold Scam orchestrated by the Canadian mining company Bre-X. Host Suzanne Wilton navigates listeners through the intricate web of deception, tragedy, and corporate malfeasance that led to the collapse of Bre-X and the devastation of countless investors worldwide.

Background: The Busang Gold Discovery

In 1995, Bre-X made headlines by announcing a massive gold discovery in the Busang region of Indonesia, igniting a frenzy among investors and sending stock prices soaring. The promise of one of the largest gold finds in history captivated the global market, drawing billions of dollars into the company’s stock. However, the dream quickly spiraled into a nightmare when Bre-X’s chief geologist, Michael de Guzman, mysteriously fell from a helicopter, raising suspicions and sparking the unraveling of the scam.

The Mysterious Fall of Michael de Guzman

[01:54] Tom Adjameh, a lawyer representing Bre-X shareholders, discusses the initial chaos following De Guzman's fall:

"Do you have an active theory about the Guzman?"
Jim Bob Moffett [02:00]: "I mean, just speculation at this point. From what I've talked to all my people about Indonesia about, a lot of people that I know think suicide and some possibly think he was killed."

De Guzman's death was officially deemed a suicide, but questions lingered about the true circumstances surrounding his demise. Bre-X President Jim Bob Moffett remained tight-lipped, citing the need to protect Freeport, Bre-X’s larger partner.

Discovery of the Salting Fraud

[06:52] Freeport's geologist, Andrew Neal, uncovered evidence of sample tampering, known as "salting," where gold was artificially added to drill samples to falsify assay results.

Jim Bob Moffett [07:38]: "The reason it's called salting is the way they used to do it is they literally would put it in a salt shaker when the sample went into the bag."

Upon this revelation, Moffett ordered a complete shutdown of operations to verify the findings, but his silence only fueled conspiracy theories suggesting foul play within Bre-X.

Investigative Journalism and Uncovering the Truth

Journalist Jennifer Wells took it upon herself to investigate further, retracing De Guzman's final journey and uncovering inconsistencies in the items he carried. Notably absent was the "black box" that witnesses had reported, leading Wells to suspect deeper layers of deceit.

Market Turmoil and Investor Panic

As suspicions mount, Bre-X's stock faced immense volatility. Despite experts like Strathcona Mineral Services' Graham Farquharson and Henrik Thalenhorst identifying the salting, the market remained irrationally optimistic.

[21:50]

Jim Bob Moffett: "I can tell you that Graham Farquharson, when he made the call at 4:00 in the morning out of Indonesia, said, I don't want this stock to trade. I don't want a grandmother buying this stock."

The Toronto Stock Exchange (TSX) eventually opened trading, leading to unprecedented trading volumes and crashes as investors, driven by greed and hope, bought and shorted Bre-X stocks en masse.

The Final Blow: BRE X's Judgment Day

On May 4, 1997, nearly three years after the initial discovery, BRE X delivered the devastating conclusion: there was no substantial gold deposit at Busang. The report, prepared by Farquharson and Thalenhorst, declared the salting inconceivable to maintain, effectively dismantling the Bre-X façade.

[33:00]

Jim Bob Moffett: "We very much regret having to express the firm opinion that an economic gold deposit has not been identified in the southeast zone of the Busang property and is unlikely to be."

The announcement led to immediate chaos. Investors saw their six billion dollar investment evaporate overnight, and Bre-X was swiftly delisted from the stock exchange.

Aftermath and Accountability

Despite the evidence, no one was held accountable for the Bre-X scandal. Questions remain about who orchestrated the salting and whether De Guzman was a mere pawn or a willing accomplice in the fraud.

[39:15]

Jim Bob Moffett: "There were local gold panners around. They bought a bit of gold and they worked out this very sophisticated system of salting the core."

The episode concludes with reflections on the human cost of the scandal, touching on personal losses and the lasting impact on the community.

Notable Quotes

• Jim Bob Moffett [03:11]: "This is the $6 billion gold scam. A story about the lengths people will go to in pursuit of getting rich."

• Jim Bob Moffett [07:38]: "This gold doesn't belong in this sample."

• Jim Bob Moffett [23:22]: "I consider myself a good person…so if we're missing information, why should I let my mother buy stock?"

• Jim Bob Moffett [29:15]: "We're all supposed to be honest, aren't we? We can have bad ideas, but we shouldn't act on them."

• Jim Bob Moffett [37:58]: "Cracked an unfortunate joke with the stewardess…I don't take their gold either. Ouch."

Conclusion

“The End of the Bonanza” serves as a compelling examination of corporate greed, deceit, and the catastrophic consequences of financial fraud. Through meticulous investigation and gripping storytelling, World of Secrets unravels the intricate layers of the Bre-X scandal, offering listeners a profound understanding of how one of the largest gold scams unfolded and the enduring questions it leaves behind.

Credits

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

Key Contributors:

• Host: Suzanne Wilton
• Producers: Kate Bissell, Anna Miles, Mark Rickards
• Story Consultant: Jack Kibble White
• Music and Sound Design: Hannis Brown
• Additional Sound Design and Audio Mix: Joel Cox
• Executive Editor: Heather Kane Darling (CBC)
• Senior Producers: Veronica Simmons, Willow Smith
• Executive Producers: Chris Oak, Cecil Fernandez, Arif Noorani
• Director: Ann Dixie (BBC World Service)
• Podcast Commissioning Editor: John Manell

Stay Tuned

In the next episode, "The Fallout from BRE X Begins: We Lost Everything," the series explores the immediate and long-term repercussions of the Bre-X scandal on investors, employees, and the broader mining industry.

For more thrilling investigations and untold stories, subscribe to World of Secrets wherever you listen to podcasts.