A previously unknown company called Bre-X, based in Calgary, Alberta, announced that they had discovered a world-class gold deposit in Indonesia. The gold reserves increased with every new drillhole, until they reached fabulous proportions. Share prices skyrocketed, the company was listed on the Toronto Stock Exchange, and powerful mining companies competed to buy out the lucky upstarts from Calgary. The Bre-X insiders became millionaires.

Then people started investigating, and discovered that the Bre-X “ore body” did not contain enough gold to pay for the mining. It was all a fiction.  The numerous rock cores had been “salted.”  The chief field geologist and number one suspect jumped to his death from a helicopter (or was pushed, or pushed out someone else dressed in his clothes, depending on what you want to believe). Owners of suddenly worthless Bre-X shares looked for someone to sue.  The former head of the Bre-X exploration department, who had sold his shares before the swindle was revealed, retired to the Caribbean, out of legal range. 

The scandal caused by the Bre-X is due in large part because mine swindling is relatively rare today, especially in companies traded on a major stock exchange such as the Toronto Exchange.

Unlike many mining swindles in years past, The Bre-X fraud has been documented in detail. 

The Bre-X Fraud, by Douglas Gould and Andrew Willis

Bre-X: The Inside Story, by Diane Francis

Bre-X: The Inside Story of the World’s Biggest Mining Scam, by Jennifer Wells

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