World Of Secrets - The Six Billion Dollar Gold Scam: 2. The believers

Episode Date: March 3, 2025

It’s gold fever. Estimates put the Bre-X discovery at four times the size of the biggest known gold deposit — and investors are trying to cash in. A small Canadian town is swept up in the gold rush. But others are asking questions, including a hedge fund manager who goes to extraordinary lengths to get inside the Indonesia gold site. Since this episode was recorded, John McBeth has sadly passed away. We are very grateful for his contribution to this story.The Six Billion Dollar Gold Scam was first published in May 2024.

This BBC podcast is supported by ads outside the UK. heroes, or villains, or often, somewhere in between. Listen to the greatest true crime stories ever told on America's number one podcast network iHeart. Open your free iHeart app, search the greatest true crime stories ever told and start listening. From the BBC's investigations podcast, World of Secrets, here's the second episode of our guest season, the $6 billion gold scam from the BBC World Service and CBC. Over to Suzanne Wilton. This is the UFO landing pad that we're standing on. It's circular, it's got a map here of Canada, Canadian flags above us. What is the significance of the UFO component of this?

Okay so there's speculation that at some point St. Paul actually had a visit. Really? Yeah there's no definitive proof but that's how. Is this part of the town gossip? Yeah this is the lore of St. Paul is that we've had situations where like the unexplained has occurred. Like what? We actually had a citizen in our town who would go out to farms and investigate cattle mutilations, which was a predominant theory amongst the UFO community. Troy Seamers is showing me around his hometown of St. Paul. It's a small prairie town with a population of about 6,000, a few hours from Calgary. Back in 1967, cattle were found here with their organs neatly removed. Rumors spread that it was the work of aliens.

People believed their town was being visited by extraterrestrials, and they raised money to build a 2.4 meter concrete pedestal, a landing pad for the UFOs. Today a row of flags to welcome any otherworldly visitors flapped loudly in the Alberta wind. St. Paul has this this kind of lore in the UFO world and I mean it to the point where even people have made pilgrimage. St. Paul really sells itself as the town with the UFO landing pad. A picture of it is on their website and if you search what is St. Paul known for, the UFO stuff comes up.

But back in the mid-90s, the town that wanted to believe the truth was out there put its faith in something on earth. Gold. There's gold fever on the streets of St. Paul. Everyone's talking about Brex, a small Calgary mining company that struck gold half a world away. And even though the mines are in Indonesia, a lot of the wealth is right here in st. Paul. Do you know any new millionaires? A few. I'd say about five. This small community in the middle of nowhere suddenly became the hub of activity for a mining company with a mother lode across the world in Indonesia.

Like why St. Paul? Why was this town so specifically targeted? In the mid-90s, St. Paul believed so hard in jungle gold that these streets were thought to have the highest concentration of Briex investors anywhere in the world. Small business owners, retirees, moms and pops with a little extra to invest, they went all in on BreEx.

Some thought the BreEx gold mine story sounded too good to be true, fool's gold. And these two camps, believers and nonbelievers, were on a collision course. I'm Suzanne Wilton, and from the BBC World Service and CBC, this is the $6 billion gold scam, a story about the lengths people will go to in pursuit of getting rich, and how greed can obscure the truth. This is Episode 2, The Believers.

Highway 881 takes you right into St. Paul. The route passes by a tall red brick church and a clock tower, but the rest of the buildings are low and boxy. Overhead traffic lights and signs for fast food joints light up the main street. Decades on, emotions are still raw in this town. I've been warned people won't want to talk about Bre-X and how the gold rush all went down here. It all started with a man from a local bank, just an average guy who came across a hot stock and told his friends and neighbours.

To my understanding, it was the gentleman at the bank and he happened to know Mr. Walsh. Mr. Walsh was David Walsh, the CEO of Brex. I mean, I found it very ironic that something that dramatic came to St. Paul. Yeah, right. Of all places. So there must have been some sort of connection. There must have been a tacit connection between the way Breach started from very small roots to suddenly getting the attention of a small community in the middle of nowhere. I don't mean that as a slight.

We're two hours from Edmonton. We are not really that connected. And I mean, back in 97, even less so, right? I mean, we're not the age of the internet and texting and video chats and all that lovely stuff. So back then, to drive to the city, you really had to have a purpose. You know what I mean?

So somebody knew somebody. Somebody in Briex told this guy at the bank and this guy brought in a small cadre of like maybe three or four well-connected families and then they expanded to the next series of connected families. Then it just kind of spread and spread and it oozed. St. Paul didn't have a wealth of information about Briex other than the fact that it was a mining company that had discovered an amazing thing and you trusted a person who at that point, it's my understanding, the gentleman at the bank wasn't actually a resident of St. Paul that long.

This town is still full of people with Breaks stories. Colin Perosny runs a brewery in St. Paul and I've been told he might have something to say. Hello. Good, are you Colin? My name is Suzanne. Hi Suzanne. Nice to meet you. I'm from Calgary and I was a journalist at the Calgary Herald for a long time and I worked on Briex. Can we chat with you? I went to the places of essay. I got back from the Chicago show, midnight last night. Oh really, were you there on business? No, just a little quick getaway. Before the rest of the world caught on to Briex,

St. Paul was already in the grip of gold fever. They got into the game when the company's stock was just pennies. In 1993, the stock started out at 20 cents a share. It's a rags to riches story that has caused a lot of excitement here in St. Paul. A hot tip from a local banker has made dozens of people rich, at least on paper, and has left dozens more shaking their heads. I didn't hear about it soon enough. If I would have, I wouldn't be standing here now.

If you'd listened to this local banker's hot tip, jumped on the stock in the early days and kept a hold of it, you were now rich. But some people, like Colin, made a different choice. We bought a vehicle instead and now we call it the Bre-X truck because it would have been worth about $300,000. That's Colin talking to CBC News about the choice he made to buy a truck instead of Bre-X stock. I was quite young.

I was out of university only a couple of years. I needed to buy a vehicle. So I came home and I talked to my wife and I said, look, there's this opportunity. You know, I told her, tried to explain what it was. And of course, she's a more logical thinker than me and she says absolutely not, we should be buying the truck instead. That same day that I bought the truck if I would have put the exact same amount of money into the Brix stock I believe it was going to be worth about three million dollars at its peak. With a population of 4,800, 1 in 26 residents became a Brix investor.

But despite the public frenzy, most people in this town kept their Brix windfall a secret. Some of the winners, they used it as a springboard to either starting new businesses, retiring early. Yeah, it definitely had a unique impact on the town. Personally, I know of about maybe 15 or 20 people who invested. There seemed to be a lot of people who were talking about it,

whether they actually invested or not. And you hear other stories of other people who invested, never mentioned a word of it to anybody, but carried on with their normal lives. Were there folks excited like they'd won the lottery and talking about it? Oh absolutely and I don't know how much actual work got done throughout that period because people were constantly on their computers checking stock quotes and I think at that time even you had to phone in to get a stock quote

so you were phoning in for stock quotes. They would have been in close contact with stockbrokers, a hotline for inexperienced investors to advise them on their next move. Again, the newspapers, the, you know, people joked you used to take the equities part of the newspaper and use it for, you know, whether a fire starter or for kitty litter or something like that. Now that was the most sought after part of the newspaper was the actual stock section. How did the word get around?

Well, like you did say, it's a small town. So there's the coffee shop talk and, you know, talking with co-workers and sitting at a hockey game or hockey practice with you and watching your kids play. And there's chatter there too. So it didn't take long for it to spread like wildfire. Did it seem strange that this small prairie town in rural Alberta would be so interested in a gold mine in the middle of Borneo? No, it's human nature to be greedy and want to get richer.

One banker with a few hot tips. You can see why so many people jumped on Briax stock. I'd really like to find an investor who will speak to me. Well, this is really frustrating. I've come two hours drive from Edmonton all the way to St. Paul, hoping to talk to some folks. I've tried three different people. None of them are willing to St. Paul, hoping to talk to some folks. I've tried three different people. None of them are willing to talk.

It's 25 years later, and people are still uncomfortable with talking about the rags to riches. I'm optimistic, though. I'm going to try again tomorrow. There's another opportunity. You know, the old timers apparently still gather, so I'm hopeful that someone's still gonna share their story. This was just a small town, farmers, regular joes. People were excited in the community because people had gotten on the ground floor.

And I think someone in the community... I'm in a local eatery, a place where townsfolk once swapped trading tips and gains over coffee. I finally found a couple who invested and who will talk. They don't want to use their last names because in towns like this, they say, loose lips sink ships. For our generation, everybody was getting in on it, and what are we going to get, and things like that. Everybody wanted to get rich.

Everybody was looking at making a quick buck. The working class person wanted to be, have money to retire, and blah, blah, blah. That's what I think. We want to believe. We want to believe sometimes so much that we're blinded by the truth. What did you learn? What did you learn as a child? If it's too good to be true, it's too good to be true.

Wow. You've got to understand the cultures of small communities and where people are from. We're not big risk takers. We invest a little bit of money. We lost money. We didn't invest a lot. Two hundred bucks. Okay, so one of you won and one of you lost.

So when it up five bucks, I cashed out. So you know, I could have made more, a lot more, but I didn't. I just cashed out for probably about the second month that everybody was going like this. I said, oh, I'm taking my money. that everybody was going like this. I said, oh, I'm taking my money. Traders at the Alberta Stock Exchange say they've never seen anything like it,

from a low of $1.90 to a high of $170 in just one year. You didn't have to be rich to invest. St. Paul's small town coffee groups pooled together to buy stock. As those early investments skyrocketed, Troy remembers people getting stoked up. Even when Bre-X was just starting, if they all pitched in a hundred bucks and got in at the bottom with their little group of pooling, right, 15 gentlemen, that's 1500 bucks on a penny stock, suddenly that 1500 bucks is you know probably a hundred fifty

thousand dollars right so these guys sitting back and having coffee going Can you believe what just happened? Right and and and the vibe is like that and then like I said people's people's thoughts were like this is unbelievable We are we are like I mean this is gonna be a goldmine. This is fantastic. I can't believe this is happening. You know, this little community suddenly went, yay, we finally hit the big time. A jackpot. Right? Like, I mean, suddenly everybody in town was going to be rich. The press descended on St. Paul to photograph the town's millionaires. And we're better

than the UFO landing pad. A photo exists of five grinning men standing there in a row. I had a copy and asked Troy to take a look at it. It's hard to say who is really in the photo. I have speculation it's just certain key members. It's incredible looking at some of these original old articles. Can you tell me about this one? Sam Greer is rifling through his collection of old articles, and he's just come across the same photo. Like Troy, he can't, in fact, won't name the people in the shot.

I better not too much. I think some of the guys are a little bit sensitive about it because I think all these guys made money on it to be quite frank. I'm meeting with Sam in my home city of Calgary, Canada. David Walsh, the CEO of Brex, hired him in 1994 to work in their Calgary office and liaise with investors. It was in the basement of the Walsh's family home. Jeanette, David Walsh's wife, ran the office, and their son Brett also worked there.

Back then, it felt like a family business. When Sam joined the company, it was before any sniff of a gold rush. So they just picked your resume and... They picked my resume and they interviewed me. I just got along with them right away. I really liked David and that's where things got started. What did you like about David?

A very personal guy, good sense of humor. It seemed like a pretty serious guy and it seemed like a pretty cool project they were working on. I mean, looking for gold in Indonesia was pretty neat. In those early days, David Walsh was going around Alberta promoting Briak's stock. One of his road shows took him to Edmonton, the nearest city to St. Paul. It was this on-the-ground promotion that sparked a groundswell of interest.

Then there were the press releases describing what was happening in Busan, Indonesia. The drilling results that came in to the Calgary office, there was a nice flow of news coming out. So as news is coming out, analysts are getting excited, words of mouth starts to spread, the press is excited and it just helps to fuel the... Everything fueled it. You had fantastic drilling results, you had the media pumping it up, you had broker-generalists that really liked it, you had a gold market that was getting strong, it was the perfect catalyst. Sam spent much of his time speaking with shareholders,

on the edge of their seats, holding on for dear life, as the drilling results kept getting better and better. Early 1995, about January, February of 95, it started to gain lots of momentum. And then it really took off kind of midway through 95. In July 1995, a press release was issued stating the discovery of possibly the largest pure gold deposit ever found in Indonesia.

Then in October, the projection was upgraded. Mining analysts estimated the deposit contained more than 10 million ounces of gold. Brex stock doubled in a week. The next press release topped even that. It was being reported that the Boo Sang project had the potential to become one of the world's greatest ore bodies.

Shares continued to soar. People wanted to get updates on a regular basis, so our job was to make sure everyone got the press releases when they came out. I will say the management made sure we stuck to the press releases. David Walsh hung on every word coming out of the jungle and rolled out press release after press release. These were devoured by analysts who created financial reports for investors, bankers and journalists.

By January 1996, the stock hit $155 a share, making Walsh a very rich man. His fortune was estimated at $250 million. Those who had held onto their penny stock were now very rich. Well, at least on paper anyway. And then 96 was a glorious year for the company. That's where it really, that's where they hit their height. That would have been in August. You know, in the Calgary office, we all believed that it was going to be the world's biggest

gold deposit and we just saw wealth created from it. Briex pumped out information at full throttle. This was the very early days of the internet, with clunky dial-up modems. Alongside those statements, Briex.com featured an anonymous narrator whose job it seemed to be to supplement hard facts with tantalizing hints at future developments. Internet chat boards dedicated to stocks and shares were flooded with speculation about

Brix discoveries. Here you could find a number of regular contributors talking the company up. They went under pseudonyms such as drum bear, dick nada, and big dude. They were just kids in their underoos in their parents' basement playing on the internet. But there was a lot of wrong information going out there. David Walsh's son Brett was in charge of moderating the Brex chat rooms. He was a pretty straight-laced kid, I remember. You know, he'd really just stick with the press release and say, well, this is what was reported and

this is what you said. They were two different things. So how important were the chat boards at that time? They were just starting to pick up. It was really the birth of all that stuff. People that had a short-term position in a stock, they would put a false rumor out on the internet. And it can be not just Brex, but other companies.

And they'd say, yep, this company just found the world's best deposit next to Brex or somewhere else. Their stock would go up. Someone would realize someone just made that up and posted it. This kind of rumor-mongering was illegal for a company to officially share. But here in the information superhighway, there was no regulation, except that enforced by the chatroom moderator. The news media article started quoting these erroneous things on the internet. It was so new and I don't think anyone knew how to regulate it. It was just kind of the Wild West.

While Brett was struggling to moderate the chatrooms, his dad, David Walsh, was fending off negative news stories, the occasional analyst raising the question whether this could all be too good to be true. Carefully timed reports of tantalizing new information coming out of Busan were his secret weapon, drowning out the naysayers. During that time, journalist Richard Behar was interviewing Walsh for a Fortune magazine article. The Brixx CEO was obsessed with controlling the narrative.

David Walsh and Richard Behar. Yep. It's Richard Behar. Hi, how are you? How you doing? Good, I'm just in the middle of putting out a very quick press release. Can I get back to you? Yeah, I do need very How you doing? Good. I'm just in the middle of putting out a very quick press release. Can I get back to you?

Yeah, I do need very much to talk to you. Do you know what kind of stuff's flying around? Yeah, I know. That's why I'm just putting out a little release. Okay. I'll get back to you. Okay, thanks. Whatever the question or the concern, the answers seemed to come from the Bre-X publicity machine.

Richard, I hope you got, that's David Walsh, I hope you got the answers on the two pages I sent back to you plus the press release. Some unanswered questions I have for you now as per item 17. The date was September 496 and Barrick, where you write the barrack. Breach's believers were everywhere. Many were unquestioning, just happy to ride the roller coaster up into the stratosphere. But there were some people who weren't satisfied. They needed to see the gold for themselves. I'm Mary Kay McBrayer, host of the podcast, The Greatest True Crime Stories Ever Told.

Join me every week as I tell some of the most enthralling true crime stories about women who are not just victims, but heroes or villains or often somewhere in between. Listen to The Greatest True Crime Stories Ever told on America's number one podcast network, iHeart. Open your free iHeart app, search the greatest true crime stories ever told, and start listening. I had a friend of mine who was a trader with me at the time and he was on her equity desk. And he said, he said, Warren, you got to take a look at this really crazy gold stock. A buddy of mine got into the dime. Warren Irwin is a hedge fund manager and a well-known figure on Bay Street, Canada's

banking and money corridor in Toronto's downtown financial district. He's on business in Calgary and has agreed to meet me in the very average downtown hotel my producer is staying in. I doubt it's the kind of place a multi-millionaire like Warren usually hangs out in. I'd made my bosses a fair amount of money trading other stocks. We approached them, my partner and I, about possibly taking a position in Brex. They weren't super keen on the idea. So at the time I said, okay, well, if you guys aren't, can you let me trade it personally? So he said, knock your socks off.

Warren is clean cut with piercing blue eyes. He's freshly shaven, not a dark hair out of place. freshly shaven, not a dark hair out of place. Because of his height, broad shoulders, and air of wealth about him, he's an imposing figure in his signature dark navy suit. Exactly what you'd imagine a 90s hedge fund manager to look like. And he's been running money in Bay Street for nearly 30 years.

It was while Warren was a director of special investments at Deutsche Bank Canada that he first came across Brex. He kept a careful eye on the stock price, but also the temperature on the ground. He was an active member of the Brex internet chat rooms. This was pioneering. This was the first time there's ever really been a chat session of any significant stock. This was very, very new. And it was very fascinating in that you're able to get so many opinions and so much information shared

online. It was so novel. At the beginning, Warren believed in BreEx stock just like anyone else. He settled on investing $250,000 at $18 a share. All of his cash was plowed into Briex stock. I felt pretty good because I felt I was going to make an absolute fortune on it because if, you know, and I was believing the numbers were true, I knew that this was going to be

huge. And what's interesting at the time, the greed machine was working more so than I've seen since. This is right after Robert Friedland had found Diamondfields and he just sold that to Inco for $4.3 billion. Robert Friedland was a mining financier and his discovery of the biggest nickel deposit in history had the mining community on a high and Bay Street sloshing with money. You just had $4 billion spread around Bay Street in a big mining discovery and everybody

had all this cash and they're all going, this was great, let's do it again. But they don't realize big discoveries don't come around too often. But sure enough, Bre-X had the story there. This is the next big thing. And a lot of people rolled the money right into Brex. So there was a frenzy and a sense of greed that I have not seen since in the markets. The level of greed back then was just unbelievable. And the front page of the Globe and Mail and the Financial Post

were all about Brex, Brex this, Brex that. And the newspapers were jumping all over this and pumping it too. So pretty incredible times What role did that play? Do you think in the excitement? Oh throwing gasoline on a fire for sure yeah between the press getting involved to legitimize it and With with a lot of investors who just made a pile of money with Robert Friedland There was money. There was greed and there was Sense of legitimacy and the numbers being spouted were just huge. Danielle Pletka So to what extent did the actions of the analysts in hyping the stock contribute to this?

Robert Friedland Well, the key thing about the analysts, especially from these big banks, like when you have big legitimate banks with respected analysts writing about this. That I believe gave a significant amount of investors a high degree of comfort and that's why in part the institutional investors also got involved in this. After its meteoric rise in the early months of 1996, Brex hit the big league in April as it graduated from the Alberta Stock Exchange onto the Toronto Stock Exchange. The company's price jumped to a new record of $184.

And by May, there were 20 million Briex shares at $286 a share, a very high price. Big Canadian banks and major companies rarely reach this high. If, like Warren, you'd bought shares at 18 bucks a share, you were now very, very rich. Then, before you know it, as you're well aware today, that there were a number of institutions started jumping in, like big, big capital. Started throwing money at this name, and before you knew it, it had a $5.6 billion market cap, and pretty exciting time.

Market cap means market capitalization. It's essentially a valuation of the company's worth. At the peak for me, I had $5.6 million personally in it. I borrowed a million dollars thinking it was prudent, and I was 30, early 30s, 31, I think it was, 30. And there I was sitting there rocking and rolling. Yeah. Warren was a diligent investor. He was on the phone night and day talking to anyone he could in Indonesia who had Brex Intel. He racked up $1,500 phone bills each month.

And I'd built up a very good contact base in Jakarta. Probably the best contact I had was John Macbeth. He worked for the Far Eastern Economic Review at the time. He's probably one of the most seasoned and experienced and respected journalists in Southeast Asia and we struck up a relationship and it worked out basically that he would share with me some of the gossip he was picking up in Indonesia and I'd share with him all the latest gossip in Toronto. In August 1996, Warren heard about a tour of the Buseng property for analysts from the big banks. This was his chance to see the site for himself. With so much invested in Brex, Warren wanted in. But there were a limited number of places.

So I tried to get on one of their first property tours, and I was told repeatedly from their Calgary office that there was no room on the trip. So it was a really tough trip to get on. I said, you know, I'm just gonna fly to Jakarta, and it's gonna be way tougher for them to say no to me if I'm sitting in front of the office manager in the office in Jakarta. The office manager in Jakarta was a guy named Greg McDonald. I took him out for dinner and he assured me, Warren, we've got three helicopters going in, they're all full. And I said, don't worry about that, I'll get my way there, no problem. I'd already figured out the river system. I figured I could get a high-speed riverboat, get some guy to take me up the Mahakam River up to one of the ports either Lora Dury or whatever and then what I would do I'm an experienced

motorcycle racer and I would buy a motorcycle from one of the locals and I find in Southeast Asia you throw around enough money things could happen. Warren wasn't used to being told no. Then Greg gave him a sliver of hope. He told Warren he should go to Ballack Papen in southern Borneo, where the two main guys, John Felderhoff and Michael de Guzman, were giving a presentation. So I jumped in a plane and there I am in the southern part of Borneo with zero permission to go on site. But I had this backup plan, throwing a bunch of cash at some local people to get me to where I needed to go.

So I'm there that night. Oh, hi, John. Hi. Hi, Mike. Any chance of me getting a helicopter tomorrow morning? Sorry, Warren. They're all full. I said, okay, great. Well, we went out. I saw the presentation, and we went out drinking that night. But we also went out playing pool with the head of the Indo assay labs there.

His pool partner was John Irvin. This guy was the next best thing to grilling Mike Tugusman and John Felderhoff directly. The assay lab Irvin ran was where the core samples of rock drilled from Busang were taken to be analyzed. Assaying is the process of determining the amount of gold present in a mineral deposit. Warren knew John Irvin would have the most up-to-date information on the amount of gold coming out of the site. And you know, this is tropical heat and we're drinking beers and he's sweating profusely and we're shooting pool or playing pool

and he looked a little nervous and I said to him, I said, just for fun, I said, John, there's gold there, isn't there? And he nearly jumped out of his skin. I was going, this is a little odd. Hmm. John Irvin's reaction to Warren's question could very well have been just one of surprise. After all, everyone knew there was a lot of gold in Busan. So the next morning, wake up bright and early, got me bags packed. Hey, John, hey, Mike,

any room in the helicopter? Warren, as luck would have it, there's one spot on one of the Hueys going. So I got jammed in as a six foot six guy, jammed in the last seat on the, on this, you know, sitting on the side of this Huey going into the site. And we're flying over, you know, flying over jungles that have been cut down by the logging companies and you're seeing the red mud in the rivers as the soil doesn't hold the moisture anymore. So we landed in Busan and I got a bunk to stay in one of the rooms with one of the mining analysts.

I go back to that time as well when I traveled up there and I reflect on your saying, oh, it's, you know, I'll just get in there. It's not easy, Warren. It's not easy to get there. So it's incredible that you had this fortitude to be able to just go. Why were you so intent on going though? $5.6 million of my own money. Trust me, when you have that much money and you're, what, 31,

you're doing anything you can to make sure you know what's going on. So I had $5.6 million reasons to get off my butt and go to the middle of some godforsaken jungle. At Busan, Warren and the other bankers were flown by helicopter around the property to visit various drill locations. One thing that was important for me as I'd look at who was running the drills, they were run by Australians. They looked like they were buying in. Obviously they believed that they wouldn't be there but the issue of course then was the gold was You couldn't see it with the naked eye in the core, right?

So there's no way even an Australian driller would have known whether they're drilling, you know Nothing or something. So I looked around and the locals were building their building houses all around the property Looking for work and they'd build their little shack. So I don't key the locals are bought in. all around the property, looking for work, and they'd build their little shack. So I go, okay, the locals are bought in. Okay, that's a good sign. LESLIE KENDRICK talking a very remote location in the middle of the jungle, this is Indigenous people, you know, who with traditional ways. Tell me what your experience was there. MICHAEL I imagine they were local dike, and, but they

were working away, building houses houses and they were believers. Can you describe the village? What was it like? Oh just a bunch of shacks. They were just putting up shanty little shanty towns being built around the around the front gates because they wanted to be there first to any jobs any work. When Warren finally got in front of Mike Dekusman and John Felderhoff he watched them very carefully. I remember one of the one of the mining guys asked Mike about whether he could get some sample core to take back. And I remember looking at what Mike did. Mike turned away from them, had a whispered conversation with Felderhoff,

and then they went back, got some core, came back, gave us a bunch of core. I was going, that was a little sketchy. Why would they have to have a private conversation just to give us some stupid core? And there were other things that got Warren's spidey senses tingling. When you drill a core, you end up with a big piece of rock. You normally split this in two, so you can send one half to the assay lab

and the other is backup. This means if you later need to double check your results, you can split the backup in half and ship that to the lab. It's called twinning, and it's a standard procedure in mining exploration. But Felderhof and de Guzman were doing something different. They were doing skeleton core, meaning every meter they'd keep a little

two or three inch piece. So that's not as good a way to to keep back up. So I'd asked Felderhoff, because they've been doing that, well of course I asked him why are you doing this now versus the traditional way of splitting core and he said well because core gold is so nuggety we want to make sure we get as big a sample as possible. So I said John when are you going to twin the holes? It's John Felderhoff. And he says, we'll be twinning the holes this fall. When that fall came and went and there was no sign of twinning holes,

that didn't make me feel super great. Warren left Boussang with some concerns, but on balance he still had confidence in his $5.6 million investment. had confidence in his $5.6 million investment. But soon after getting home, and completely by chance, he bumped into a seasoned exploration mining geologist named Dale Hendrick. I ran into him in the elevator in my condo building, and I was reading the front page of the Financial Post, and it said, Briex, you know, millions created, blah, blah, blah. I'm reading this and I go, yeah, yeah,

what do you think of this? And he goes, oh yeah, yeah, he says, a lot going on in the mining business. He says, yeah, yeah, I just came back from here. And he said, really? You and I need to talk. And his old timer sat down with me. We live in the same condo building as luck would have it.

And he started explaining to me that John Felderhoff is a crook. Dale Hendrick seemed credible. He'd spoken to Australian geologists who'd explored the property before Brex. He told Warren that those guys were convinced there was absolutely no gold to be found at Busan. They had tested it all. And I said, well, why don't the Australians tell the world that this is a scam? Oh, no, they're not going to do that because they're making way too much money on this.

There are so many people in the mining business that knew there was a scam right from the beginning that kept their mouths shut. And I said to Dale, I said, well, Dale, if the Australians aren't going to say anything, I said, are you saying, he goes, yeah, I'm telling, I'm telling the majors who I know that this is a scam and they're, they're thinking I have three heads. But could Warren trust Dale? At this point, the major mining companies such as Barrick Gold, Placer Dome, and Freeport McMorrin were all eyeing up Boozang. Brex even then was still a junior mining company.

It's the junior mining companies that do the exploration, and then the major mining companies come in and take the gold out of the ground. While a handful of people like Warren were raising red flags, others dismissed scam rumors as dirty tricks. If the majors could drive the Brex share price down, they wouldn't have to pay so much to buy their way in. they wouldn't have to pay so much to buy their way in. And I was concerned that Dale was actually working for one of the majors.

And you have guys employed by the big mining companies running around telling people it's a scam to keep the price a little bit lower than would otherwise be. And there's me, little 31-year-old Warren or 32-year-old Warren, trying to think, thinking, this is a scam or this could be a scam and then I have an old an old timer sitting there telling me it is a scam and John Felderhoff is terrible human being and he went on to say a funny line he goes he ran into John once and this is why Dale was never ever allowed to go on site because he said to John once he goes John haven't you taken this scam far enough? Isn't enough enough? And Felderhoff shrugged his shoulder and left. Ever the diligent investor, Warren continued to rack up his phone bill by getting intel directly from Jakarta and mainly from journalist John Macbeth.

He called me every night. I met with John in Jakarta, and mainly from journalist John Macbeth. He called me every night. I met with John in Jakarta. As Warren Irwin said, everyone got a bit carried away with it. You know, we were talking 200 million ounces of gold here, and this is amazing. There's one call John took which stands out. It was in the middle of the night, December 1996. The phone rang. It was Warren. His opening line was, what if I told you there was no gold there? Everything was going on,

the share price was going up. And I would just suddenly stop me in my tracks and I said, what do you mean? And he said, I've had the massade every which way, and there's no gold there. And I remember saying to him, well, what do you make of that? And he said, I don't know. And then we got into the conversation about what was going on, and we kind of forgot about it. Things were moving really fast. And not long after Macbeth had spoken to Warren,

he met with John Felderhoff at the Bats Bar in the Shangri-La Hotel. I talked to Felderhoff quite often. He wasn't always trustful of me, I don't think. But he got to know me a lot better as time went on and he loosened up quite a bit. But he was obviously a man under great pressure. I remember interviewing him in probably February, January, February of 97. He was chain smoking, he was drinking endless bottles of beer, he was really under the gun. Well that was well about a month out from when de Guzman allegedly jumped from the helicopter so and that was when the Sahato family

had become fully engaged. I knew that they were under pressure. I mean, they were under pressure to sell. As gold fever took over, de Guzman and Felterhoff tightened access to the exploration site. They were trying to keep a lid on the monster they'd awoken.

But as much as they may have wanted to keep the world out, Briex's incredible rise had brought them to the attention of powerful people. People who were willing to do whatever it would take to force their way into boozing. Next time on the six billion dollar gold scam, Brex battled to keep their hands on the gold. Brex stood up to large corporate companies that had connections and we fought back. And so we played pretty hard. Everything is surprising I guess in the Brex story.

And there are rumors of dirty tricks. One of the things that I think upset the Briex people was that Barrick had enlisted private detectives. And the story of the Briex discovery gets wilder and wilder. People were hunting people and looking for people and have you seen him? The six billion dollar gold scam is produced by BBC Scotland Productions for the BBC World Service and CBC. I'm Suzanne Wilton. Our lead producer is Kate Bissell. Producers Anna Miles, Mark Rickards. The lead producer is Kate Bissell. Producers Anna Miles, Mark Rickards. Story consultant Jack Kibble-White.

Music and sound design by Hannes Brown. Additional sound design and audio mix by Joel Cox. Executive editor Heather Kane-Darling. At CBC, Veronica Simmons and Willow Smith are senior producers. Chris Oak is executive producer. Cecil Fernandez is executive producer. And Arif Nourani is the director.

At the BBC World Service, Anne Dixie is senior podcast producer. And John Manel is the podcast commissioning editor. Thanks for listening. I'm Mary Kay McBrayer, host of the podcast, The Greatest True Crime Stories Ever Told. Join me every week as I tell some of the most enthralling true crime stories about women who are not just victims, but heroes or villains often, somewhere in between. Listen to the greatest true crime stories ever told on America's number one podcast network, iHeart. Open your free iHeart app,

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