May 30, 1988: David Walsh incorporates Bre-X Minerals Ltd. in Calgary. He and his wife, Jeannette, are the only employees and they work out of their home. Bre-X goes public a year later on the Alberta Stock Exchange at 30 cents a share. Its focus is looking for diamonds in the Northwest Territories.
April 2, 1993: David Walsh writes Canadian geologist John Felderhof to inquire about Indonesia. "I want to put some romance into both companies," Mr. Walsh writes referring to Bre-X and a related company, Bresea Resources Ltd. The men had met in 1983 in Indonesia where Mr. Felderhof was working for an Australian company. But both men are now down on their luck and running out of cash.
May 3, 1993: Mr. Felderhof helps Bre-X acquire its first stake in the Busang property on Borneo for $80,000 (U.S.). Bre-X tells investors the site might contain 1 million ounces of gold. Mr. Felderhof assembles a crew to drill for samples and recruits a friend from a previous venture, Michael De Guzman, a geologist from the Philippines.
Oct. 19, 1995: Bre-X says drilling has uncovered a deposit with about 2.7 million ounces of gold. Analysts believe the find might hold 30 million ounces. Mr. Felderhof says it could be 45 million and adds that the site "has the potential of becoming one of the world's great gold ore bodies." Bre-X's shares hit $59.
March 14, 1996: Mr. Felderhof tells shareholders at the company's annual meeting in Toronto that Busang holds at least 30 million ounces. "I think it's 30 million plus, plus, plus." Mr. De Guzman hints at 100 million ounces. Bre-X's shares top $187. The company moves to the Toronto Stock Exchange in April and splits its shares ten to one in May. The new shares trade at $28.65.
Aug. 15, 1996: The Indonesian government cancels Bre-X's exploration permit citing an ownership dispute at the Busang property. Local businessman Yusuf Merukh claims he has a 40 per cent interest in the site. President Suharto refuses to renew the license until the dispute is settled.
Oct. 28, 1996: Bre-X signs a strategic alliance with an Indonesian company controlled by Sigit Harjojudanto, President Suharto's eldest son. Mr. Harjojudanto's company gets a 10 per cent stake in the property plus $1-million (U.S.) a month for 40 months and contracts to supply the mine with utilities, petroleum products and limestone. Mr. Harjojudanto's other business interests include banking, petrochemicals, transportation, and telecommunications.
Nov. 29, 1996: The Indonesian government directs Bre-X to strike a deal with Barrick Gold Corp. to develop the property. Barrick gets majority control of the development company and the government says it "would appreciate it if the parties could consider a 10-per-cent participation being given to the Indonesian government." Barrick out manoeuvres Placer Dome Inc. which pushed for a joint venture.
Feb. 27, 1997: The Barrick deal falls apart. President Suharto's close friend Mohammed (Bob) Hasan steps in and helps Bre-X negotiate a new deal with Freeport McMoRan Copper & Gold Inc. of New Orleans. Bre-X gets the largest ownership stake, 45 per cent, while Mr. Hasan gets 30 per cent. The remainder is split between Freeport and the government. Meanwhile, at Busang, a mysterious fire destroys the administration office and geology records.
March 12, 1997: Freeport finds discrepancies between its due diligence sampling and Bre-X's results. Mr. De Guzman, in Toronto for a mining conference, is told to provide some answers. At the conference, Mr. Felderhof is named "Prospector of the Year."
March 19, 1997: Enroute to Busang, Mr. De Guzman disappears from a helicopter. His body is found four days later. Relatives later claim that he'd told them he'd been haunted by evil spirits.
March 26, 1997: Freeport says it has found "insignificant" amounts of gold at Busang. Bre-X acknowledges that its estimates may have been overstated. Investors panic and sell off so many shares of mining companies that the Toronto Stock Exchange's computers overload twice in one day. Bre-X's share price tumbles to $2.50, with roughly $3-billion in market cap disappearing within minutes.
May 5, 1997: Strathcona Mineral Services Ltd, hired by Bre-X to investigate what happened, concludes that widespread tampering occurred at Busang. Strathcona calls it the biggest fraud in the history of mining. Lawsuits fly, the RCMP investigates but lays no charges. A year later, David Walsh dies of a brain aneurysm at his home in the Bahamas.
May 11 1999: The Ontario Securities Commission files eight counts of illegal insider trading against Mr. Felderhof, alleging he pocketed $84-million by using non-disclosed information. Mr. Felderhof is the only Bre-X official ever charged. His trial begins in October 2000 but stops in April 2001 when the OSC moves to remove the judge. The bid fails and the trial resumes on Dec. 6, 2004. It concludes Aug. 31, 2006. A ruling was expected Feb. 2, 2007, but the judge delays his decision until July 31, 2007.