MINING NEWS: Trial of Bre-X geologist set to resume

Gary Park

Petroleum News Calgary correspondent

The attempt to pin blame in the massive Bre-X Minerals gold fraud drags on, with no hint of compensation for investors who lost an estimated C$3 billion.

A long-delayed trial of former Bre-X geologist John Felderhof is now scheduled to resume sometime between late October and early January, but the hearings are not expected to be completed until May 2005.

But Felderhof has reportedly been living in Indonesia, the Cayman Islands and Central America. He faces a maximum of two years in jail and C$150 million in fines, but is unlikely to ever appear at his own trial.

Meanwhile, various civil suits in the United States and Canada are hanging on the outcome of the trial.

Even though Felderhof cannot be extradited, attorney Frank Marrocco, who is heading an Ontario Securities Commission prosecution team, said that abandoning the case “would not be good public policy ... otherwise we would be saying to people that if you flee the jurisdiction we won’t proceed.”

Felderhof is charged with eight counts of selling C$84 million worth of Bre-X shares in 1996 while aware that core drillings backing Bre-X’s claims to a massive gold find in Indonesia had been “salted” with gold.

He is also accused of authorizing Calgary-based Bre-X to issue misleading press releases about the gold property.

The insider trading trial began in Ontario in 2000, but has been on hold for three years after Justice Peter Hyrn was accused by the Ontario Securities Commission of showing bias against the prosecution.