Ghosts of Bre-X scandal expected to haunt annual mining convention
By PAUL BAGNELL
Mining Reporter The Financial Post
When thousands of mining industry players begin gathering in Toronto this weekend for the 66th edition of a huge mining convention, one title they won't find among the dozens of events listed in their programs is "Bre-X - What Happened?"
Organizers of this year's convention of the Prospectors & Developers Association of Canada say they never gave serious thought to setting aside half a day to thrash out the industry's most monumental fraud.
"We would prefer to have that behind us and move ahead," says outgoing PDAC president John Heslop.
Last year's gathering is already part of industry lore.
It was during the four days of the event the Busang gold swindle began to unravel.
David Walsh, Bre-X Minerals Ltd. president, was at the conference when he took a call from Jim Bob Moffett, chief executive of Freeport-McMoRan Copper & Gold Inc. Moffett told Walsh his geologists were finding no gold at the site.
Bre-X geologist Michael de Guzman spent several of the last days of his life at the conference.
According to private investigators, de Guzman, along with four assistants, flew to Toronto to demand from Walsh that they be allowed to cash in 50% of their Bre-X share options.
De Guzman, who the investigators say was the ringleader of the Bre-X sample-fixing operation, also proposed marriage to a dancer at a nearby strip club.
The PDAC's reticence aside, echoes of the Busang scandal won't be absent from the conference, which runs from Sunday to Wednesday.
On Tuesday morning, a session on mining and finance will include a visit from an official of the RCMP's market fraud section.
His subject: restoring credibility to the mineral exploration industry.
A Wednesday session will discuss securities regulators "at the crossroads" and a vice-president of the Toronto Stock Exchange will update the work of a regulators' task force on Bre-X on Monday morning.
For the most part, however, the convention will be dominated by typical convention fare like detailed presentations on major new mineral discoveries, dozens of junior companies displaying their drill cores, and hospitality suites offering booze and schmooze late into the night.
PDAC director Tony Andrews predicts a slightly lower attendance this year than last year's record 7,200. Slumping gold and metal prices may be one reason, he says.
Ten years ago, the event drew 4,800, he says. Over time, the convention has grown from a national gathering to one that now draws participants from around the world.
This year, for instance, the mining minister of the new revolutionary government in the Democratic Republic of Congo, Frederic Kibassa Maliba, will speak at the gathering.
His goal will likely be to convince delegates his country is a safe place for foreign mining investment.
For junior gold exploration companies like Mispec Resources Inc. the purpose of appearing at the convention may simply be to show the industry they are still alive.
Toronto-based Mispec has turned up promising early results on a property in West Java, Indonesia, and officials will display core samples and speak at the show.
Although its stock was pummelled by the Bre-X fiasco, the company has remained in Indonesia. Numerous others have packed up and left.
James Patterson, a director and chief of exploration for Mispec, says the name of the game for companies like his these days is demonstrating they are still around.
Institutional investors, he says, have completely fled the junior gold sector.
When individual investors call Mispec's office, it's often to ask if the company is still active.
It was during the four days of the event the Busang gold swindle began to unravel.