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The mystery of the man involved in a billion-dollar gold scam

A mining company’s claim that it had discovered a huge deposit of gold, deep in the Indonesian jungle, sparked a scramble to invest in the company. But not all that glittered was gold, as a new podcast series reveals, and questions remain over the mysterious death of the company’s chief geologist.

Warning: This article contains spoilers.

On the morning of March 19, 1997, Michael de Guzmán, chief geologist for the Canadian mining company Bre-X Minerals, boarded a helicopter flight to travel to a remote location in the Indonesian jungle.

It was a trip he had made many times before, to a place where he reported finding huge deposits of gold.

But this time De Guzmán never arrived.

Twenty minutes into the ride, a rear door on the left side of the helicopter opened and de Guzmán was gone, plummeting to his death in the dense foliage below.

The CEO of the mining company announced that De Guzmán had taken his own life after being diagnosed with hepatitis B and exhausted from fighting recurring malaria.

Ten years later, the Calgary Herald sent Canadian journalist Suzanne Wilton to investigate de Guzmán’s death.

“I was sent to the other side of the world… This story has haunted me ever since,” he says.

Now, he returns to the case for a new podcast series, delving into what happened before the fateful helicopter ride.

Image source, Richard Behar

Screenshot, The remote site was in Busang, in East Kalimantan province, on the island of Borneo.

De Guzmán was born in the Philippines on Valentine’s Day 1956. A fitting birthday, as he was often in love. He had three, possibly four, wives at the same time in different countries.

A man who enjoyed karaoke, beer, visiting strip clubs and wearing gold, de Guzmán was an experienced geologist who believed he could make his fortune in Indonesia.

In the 1990s, the country was seen as a land of opportunity for gold seekers with its rich natural mineral sources, Wilton says.

A Dutchman, John Felderhof, known to many as the Indiana Jones of geologists, believed that a remote site at Busang, in the province of East Kalimantan on the island of Borneo, was a gold mine waiting to be exploited. But he needed cash to keep going.

Image source, Warren Irwin

Screenshot, John Felderhof was said to have a charismatic personality.

In April 1993, Felderhof reached an agreement with David Walsh, CEO of Bre-X Minerals. Walsh was going to sell the dream to potential investors of a site loaded with buried treasure.

Felderhof controlled operations on the ground and made it clear that he wanted a project partner to help with the search: his fellow geologist and friend of Guzmán.

But Felderhof, de Guzmán and his team only had until December 18, 1993 to drill test holes to see if there was really gold there. That’s when the exploration license they had been granted by the Indonesian government expired.

With just a couple of days left until the final deadline, and two holes dug, there was still no sign of gold. Then, Wilton says, De Guzmán suddenly told Walsh that he knew the precise place they needed to drill: the place had occurred to him in a dream.

The team drilled a third hole exactly where De Guzmán had pointed and found gold. Another fourth hole brought with it the prospect of an even bigger find.

It was the biggest gold mining fraud of all time – a scam that devastated countless lives. But what really happened?

And if you’re outside the UK, listen to the series wherever you get your podcasts.

For the next three years, work on the site continued. As estimates of how much gold was there grew, so did the number of investors. Bre-X Minerals’ share price began to soar, from 20 cents to C$280 (US$206; £163). The company was eventually valued at C$6 billion (US$4.4 billion; £3.5 billion).

Many people in small Canadian towns joined the gold rush and invested hundreds of thousands of dollars of their savings.

But as time passed, the shine began to fade.

Image source, Warren Irwin

Screenshot, Drilling at the site continued until 1997.

In early 1997, Indonesia’s then-president Suharto ruled that a small company like Bre-X Minerals could no longer exclusively own the site and reap its benefits. It had to be shared with the Indonesian government and assisted by a larger, more experienced mining company. Thus, an agreement was reached with the American company Freeport-McMoRan.

Before agreeing to take on all the financial risks associated with mining precious metals, Freeport-McMoRan needed to do its own checks. Its geologists were sent to drill twin holes in the Busang deposit. Twinning is a way of verifying the presence of gold by drilling next to where it was found and taking rock samples.

This was standard practice in mining, but Bre-X Minerals had not done it until now.

The twin samples were sent to two different laboratories, but the results were the same: no traces of gold were found.

What could this mean for people who had invested their savings?

Freeport-McMoRan informed Walsh and Felderhof of the new data. De Guzmán, who was at a convention in Toronto, was ordered to return to Busang to meet with the Freeport-McMoRan team to explain.

De Guzmán traveled from Canada via Singapore, where he spent time with his wife Genie, with whom he had a son and daughter.

Image source, Guzman’s Genius

Screenshot, Michael de Guzmán was born in the Philippines

His final hours have since been reconstructed by another Canadian journalist, Jennifer Wells.

She says De Guzmán spent his last night in the town of Balikpapan, more than 161 kilometers (100 miles) south of the Busang mine, with Bre-X Minerals employee Rudy Vega.

Vega was part of the company’s Philippine exploration team and was to travel with De Guzmán to take on Freeport-McMoRan.

According to an account Vega would later give to Indonesian police, the two went to a karaoke bar. After returning to his hotel room, De Guzman attempted to take his own life, Vega said.

The next morning, De Guzmán and Vega traveled by helicopter to Samarinda, another city closer to Busang.

De Guzmán then boarded the helicopter again to travel to the mine, but Vega did not join him.

Two men accompanied De Guzmán on the flight: a maintenance technician and a pilot. But the pilot was an Indonesian air force pilot, not the usual one who made the trip to the Busang mine. The stopover in Samarinda was also strange: normally De Guzmán flew directly from Balikpapan to Busang.

After giving initial statements at the time, the pilot has rarely spoken about the trip. But, Wilton says, he has denied any involvement in what happened to De Guzmán and has maintained that he did not see what happened.

By 10:30 local time on March 19, 1997, De Guzmán was dead.

Handwritten suicide notes were found on the helicopter and, four days later, a body was recovered in the vast jungle.

Screenshot, Journalist Suzanne Wilton visited Guzmán’s grave in Manila, Philippines

Six weeks after Guzmán’s death, Busang’s gold dream was over for everyone, leaving investors desperate.

Bre-X Minerals’ C$6 billion valuation had dwindled to nothing.

An independent report would confirm that there was no gold at all at the Busang site. Rock samples dating from 1995 to 1997 were analyzed and found to have been manipulated using a process called salting. Fragments of gold from another source had been spread among rock samples using a salt shaker to falsify the results.

Nearly 30 years later, no one has been held accountable for the scam.

Walsh maintained that he knew nothing about it and died of a stroke in 1998. In 2007, a Canadian judge ruled that Felderhof was unaware of the scam and found him not guilty of insider trading. The Dutch geologist died in 2019.

That brings us back to De Guzmán. Had he taken his own life so as not to have to reveal that he had been the mastermind behind the hoax?

His suicide notes raise concern, Wilton says.

For the podcast, Felderhof’s once-removed cousin, Suzanne Felderhof, says she had expressed doubts about whether de Guzmán could ever have written them.

The notes mention physical ailments that she says her family member had never heard her complain about.

Wilton says another suicide note was written to a financial manager at Bre-X Minerals whom De Guzman didn’t actually know. In it, the name of one of Guzmán’s wives was spelled incorrectly.

Dr. Benito Molino was a member of the Philippine investigation team hired by Guzmán’s family to examine the evidence once the autopsy reports were released.

In photographs of the body found in the jungle, Molino says he saw bruises on the neck and concluded that De Guzmán had died from strangulation.

“When he was dead, they should have thrown him out of the helicopter in the jungle to make it look like he committed suicide,” Molino tells the podcast.

“In major crimes, there will always be a scapegoat, so we do not believe that the true mastermind will be identified.”

Or was the body even that of De Guzmán?

Based on initial descriptions, it appears the individual had been dead for more than four days, the time it took for the body to be discovered, says forensic anthropologist Dr. Richard Taduran, who worked with Molino.

De Guzmán’s wife Genie also says that the teeth were intact on the body found and yet her husband had false teeth. Her family has never released De Guzmán’s dental records, Wilton says.

Screenshot, Michael de Guzman Jr is also a geologist.

Geologist Mansur Geiger, a friend of Genio de Guzmán, says that she had told him that her husband was still alive and had escaped to South America. Geiger believes he now lives in the Cayman Islands.

Could De Guzmán have arranged to pick up a body to take the final flight and fake his own death? Did he even get on the helicopter?

The son he shared with Genie believes his father could still be alive, since his mother told him so.

He is a geologist, like his father, and is determined to continue his father’s legacy, but this time the right way.

“Maybe I could start my own mines,” says Michael de Guzmán Jr. “Get some investors and…be the best Mike de Guzmán.”