Geologist denies involvement in Busang fraud

Geologist denies involvement in Busang fraud

TORONTO (Reuter): Bre-X Minerals Ltd head of exploration John Felderhof said he was not involved in a fraud and personally still thinks there is significant gold at Bre-X's Busang property in Indonesia.

Felderhof said late Sunday in a fax from the Cayman Islands that he was "shocked and dismayed" by a report from independent consultant Strathcona Mineral Services Ltd which said the Busang results were falsified on a scale "without precedent in the history of mining."

"I know that I was not involved in a fraud," Felderhof said in the statement.

"I also find it very hard to believe that anyone in my staff was involved in a fraud. I intend to fully cooperate with the authorities investigating this matter," Felderhof said.

The geologist said he has only had a brief opportunity to review the Strathcona report. He added that he has spent sixteen years of his professional life in Indonesia.

"Based on all of my work, and my 35 years experience as a geologist, I personally still believe that there are significant amounts of gold at Busang," he said in the statement.

"Although this will be a very difficult time for Bre-X and our shareholders, I believe that eventually our work and our deposit in Busang will be confirmed," Felderhof said.

In Manila, the family of Michael de Guzman said yesterday that the late Filipino geologist for Bre-X Minerals Ltd would never commit fraud despite findings that the Busang gold strike in Indonesia was falsified.

"Let us shout to the whole world that my brother has never been involved in any kind of fraudulent acts or scam and he will never do anything that will jeopardize the integrity of the Filipinos in Indonesia," said de Guzman's brother, Simplicio.

The reports of a huge gold find came from samples submitted by Bre-X's head of exploration John Felderhof and his team of geologists, including de Guzman.

De Guzman died on March 19 after falling mysteriously out of a helicopter flying him to the Busang jungles in Indonesia, where Bre-X had previously reported what appeared to be the largest gold find this century.

Indonesian police had said de Guzman might have committed suicide, based on a letter they said he left behind stating he was suffering from acute hepatitis-B.

"Everything that is coming out in the newspapers, television, are all negative about my brother," Simplicio de Guzman said.

The family has refuted reports de Guzman committed suicide, saying he had laid out too many plans for his Filipino family.

Simplicio told Reuters that up to now the family had not received any official report from Indonesian police on the results of an autopsy performed on his brother.

Simplicio said officials of the Philippine National Bureau of Investigation, which carried out a second autopsy on de Guzman, reported to the family that he died from a fall.