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Bre-X bosses netted millions on shares

Jim Levi
Wednesday 16 April 1997 23:02 BST
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Directors of Bre-X Minerals, the troubled Canadian mining firm, made millions of dollars from share-dealings last year when the stock price was riding high, it emerged yesterday.

While the top directors at Bre-X Minerals lost a fortune on paper when the share price crashed last month, official records show that they did cash in on the strength of what now appear to be outrageous estimates of the size of gold reserves on its Indonesian exploration drilling.

Transactions recorded by the Ontario Securities Commission in Toronto reveal that between April and September last year, the company's founder and president, David Walsh, sold 300,000 shares at an average price of around C$25 netting about C$7.5m (pounds 3.3m).

Share-trading activity by John Felderho, his Dutch geologist partner and vice-chairman who in 1993 first persuaded him to buy into the now notorious Busang concession, was on an even more aggressive scale.

In one day alone - on 19 April 1996 - Mr Felderhof sold C$5.5m worth of shares in separate lots of about 2,000 shares when the price was trading at around C$170 (equivalent to C$15.45 after a subsequent share split). Last night the shares were selling at C$2.17.

In all Mr Walsh, his wife Jeannette, Mr Felderhof, his wife Ingrid, John Thorpe the company's treasurer, vice-president Steve McNulty and his wife Nancy and another-vice president, Rolando Francisco, cashed in over C$100m worth of shares from April to September last year.

This was at the time the company claimed that Busang might be the biggest gold mine in the world - up to 200 million ounces worth pounds 30bn - were doing the rounds of world stock markets.

According to reports in the Northern Miner, the North American mining newspaper, Michael de Guzman, Bre-X chief geologist, who reportedly jumped to his death from a helicopter near the Busang prospect, could have "netted himself several million dollars" had he cashed in his share options when the price was at its peak.

The Ontario Securities Commission, Toronto Stock Exchange and Alberta Securities Commission began its investigation into Bre-X to gather information to enable staff to assess whether there is evidence for formal proceedings.

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