Bre-X court saga continues

Investors who were duped in a gold mining fraud will have six months to decide whether to abandon their court claims.
The Bre-X Minerals building in Calgary as it was in 1997. (Jeff McIntosh/CP file photo)

Investors who were duped in a gold mining fraud will have six months to decide whether to abandon their court claims.

Bankruptcy trustees from Deloitte and Touche had filed an affidavit asking all class-action suits on behalf of Bre-X creditors in Alberta, Ontario and around world be thrown out. The company is making the move because there is no money to pay them.

The case was back in a Calgary courtroom on Tuesday, where creditors were given until May to make a decision on whether to pay added legal fees to continue.

Clint Docken, who represents investors, said it's not clear how money could potentially be recovered from the families of former top company executives.

"There hasn't been a lot of recoveries over the course of 15 years and to give up against the prime defendants, that's a decision that shouldn't be taken lightly," he said.

It has been 15 years since Bre-X was exposed as a $3 billion mining fraud when thousands of investors were duped by the company that claimed to have struck gold in Indonesia.

In 1996, the small Calgary-based mining company announced that it had discovered gold deposits in Indonesia. Shares in the company began to soar, creating millionaires out of early investors. But when mining officials reported their findings on March 26, 1997, shareholders were stunned to learn that there was no gold.

This revelation halted trading of Bre-X shares on the Toronto Stock Exchange, causing one of the largest stock market scandals in Canadian history.