110th Sydney Mining Club Luncheon
Dr Phil Hellman and Bre-X Mark II
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On 19 March, 2007 it will be ten years since Michael de Guzman, Bre-X's Exploration Manager, is widely believed to have died after falling from a helicopter between Samarinda and Busang on the island of Kalimantan, Indonesia. There is still debate as to whether it was murder or suicide.
As a result of the collapse of Bre-X Minerals Ltd, charges were laid by the Ontario Securities Commission in May 1999. The ensuing trial of Mr John Felderhof, Bre-X's General Manager, Indonesia has resulted in over 1600 exhibits and 15,000 pages of transcripts. The trial was delayed in April 2001 when the OSC attempted to have the judge removed from the case. This motion was dismissed and an appeal by the OSC was lost. The case restarted in 2004 and a verdict is expected by mid 2007.
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There was some extraordinary evidence heard, particularly that relating to the business practices of western mining companies in Indonesia. Much of this has never been reported in the public arena such as a US$1million "envelope agreement" to a middle-eastern intermediary.
Dr Phillip Hellman was the first defence witness called and gave evidence for nine days in late 2005. You will get a taste of what it is like to be cross-examined and will hear of some memorable admissions by some of the key witnesses. One example relates to the alleged total absence of references to visible gold in the Bre-X core logs. This was called a "bright red flag" by the OSC's only geological expert (who is a mining engineer). Curiously, the first log that Phillip read has clear and unambiguous references to visible gold. The reason for this contradiction became clear during cross-examination: "We did not get the core logs from the Central Zone until after we had completed our opinion report".
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