Walsh says gold hoax was a 'horrendous blow'<\/p>\n
MONTREAL (AFP): Bre-X Minerals chief David Walsh said Friday
\nthat a police investigation into the Busang gold strike hoax in
\nIndonesia was \"moving rapidly.\"<\/p>\n
In an interview with Canadian Press, Walsh also said he had
\nhoped right up to the last minute that an independent audit
\nconducted by Strathcona Minerals Ltd. of Toronto of the claim
\nwould produce a \"positive report.\"<\/p>\n
Strathcona's announcement last Sunday that the goldfield in
\nBorneo was a bust came as a \"horrendous blow,\" said Walsh, chief
\nexecutive officer of Bre-X.<\/p>\n
When Bre-X officials got the news, \"we contacted the
\nauthorities and had already started an investigative process on
\nour own,\" Walsh said.<\/p>\n
Walsh has filed a formal complaint with the Royal Canadian
\nMounted Police alleging his company was the victim of a massive
\nfraud.<\/p>\n
On Thursday, Walsh announced that Bre-X and two related
\ncompanies, Bresea Resources Ltd and Bro-X Minerals Ltd, had filed
\nfor protection from its creditors.<\/p>\n
Walsh also said that Bre-X chief geologist and vice president
\nJohn Felderhof, currently in the Cayman Islands, had been fired.<\/p>\n
Felderhof was instrumental in the earlier claims that Busang
\nwas the world's biggest gold find.<\/p>\n
Prices<\/p>\n
Bre-X share prices tumbled from more than US$2 to just a few
\ncents, pulling down the share prices of other Canadian mining
\ncompanies. Firms doing business in Indonesia lost one-third of
\ntheir value on Monday alone.<\/p>\n
The company was de-listed Wednesday by the Toronto Stock
\nExchange while the Alberta and Montreal exchanges continued to
\nsuspend trading in Bre-X.<\/p>\n
A day after Bre-X Minerals Ltd. filed for bankruptcy, its
\nousted chief of exploration said on Friday he was unaware of any
\nfraud at the now worthless Busang gold project.<\/p>\n
In a statement released through his lawyers in Toronto and
\nHouston, Felderhof said he has reviewing the \"startling new
\nmaterial\" on Busang, but added more facts were needed.<\/p>\n
\"Again, let me state without reservation that I was not aware
\nof any fraud at Busang, Loa Duri, or Bre-X,\" the 56-year-old
\nCanadian geologist, now living in the Cayman Islands, said.<\/p>\n
Felderhof, 56, was named Canada's Prospector of the Year in
\nMarch for his work in finding the Busang gold deposit in
\nIndonesia, once touted as the century's biggest gold discovery.<\/p>\n
Bre-X's last official estimate for Busang was 71 million
\nounces of gold, while Felderhof had said it could hold up to 200
\nmillion ounces of gold.<\/p>\n
But in a devastating report on Sunday, a consultant hired by
\nBre-X concluded that Busang was falsified on a scale \"without
\nprecedent in the history of mining.\"<\/p>\n
Bre-X's storage warehouse near the Borneo town of Samarinda,
\nwhere core samples were kept for long periods, was the most
\nlikely spot for any tampering, the report said.<\/p>\n
Felderhof said in his statement he was cooperating with
\nauthorities probing the biggest mining scandal in history.<\/p>\n
\"I can't disclose who he has been contacted by, but I can tell
\nyou he has been cooperating with the people that have been
\ncalling him,\" Joseph Groia, Felderhof's lawyer, said in a phone
\ninterview on Friday.<\/p>\n
Felderhof also has retained the Houston law firm of Jenkens &
\nGilchrist. Felderhof and other Bre-X officials have been named in
\nseveral class action lawsuits filed in the United States and
\nCanada.<\/p>",
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"sponsor": "Okusi Associates",
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