MINING NEWS: Former Bre-X geologist surfaces at Ontario securities trial; says he will ‘clear my name’

John Felderhof is unyielding in his belief that the Busang mining lease in Indonesia — the core of history’s biggest mining fraud — holds a “substantial gold resource.”

Emerging from his home in the Cayman Islands, the Dutch-born geologist is attending Ontario Securities Commission hearings in Toronto into eight charges against him — four of insider trading involving the sale of C$84 million in shares of Bre-X Minerals before it collapsed in 1997 and four of issuing false press releases.

“Basically I’m here to clear my name and that of my family,” he told reporters, in explaining his surprise appearance.

But it is not clear whether Felderhof, who has pleaded not guilty, will testify.

Growing claims in the mid-1990s that Bre-X had discovered a 62 million-ounce gold find — some later reports boosted the estimate to 200 million ounces — propelled the Calgary-based company’s market value to C$6 billion and turned small-time stock players into instant multi-millionaires.

That world evaporated when Strathcona Mineral Services President Graham Farquharson, who had been hired to audit the Busang results, described the property as a fraud “without precedent in the history of mining.”

Felderhof is the last survivor of the Bre-X principals. A geologist, Michael de Guzman, reportedly jumped to his death from a helicopter in Indonesia as questions were being raised and Chief Executive Officer David Walsh died of a heart attack.

Answering questions from the Calgary Sun, Felderhof said it is now clear to him that some of the Bre-X samples were salted, but he would not speculate on who was responsible.

However, he remained emphatic that there is gold in large quantities in the jungles of Busang.

—Gary Park