Hollywood takes on Calgary's 'mysterious and sexy' Bre-X scandal

Twenty years after a small Calgary-based mining company called Bre-X Minerals duped people out of millions of dollars, former journalist Suzanne Wilton recalls the scandal and intrigue she reported on firsthand.

Former Calgary journalist remembers scandal, intrigue as Gold hits the big screen Friday

Matthew McConaughey, centre, in a scene from Gold. The film is inspired by the Bre-X scandal. (Associated Press)

Twenty years ago, a small Calgary-based mining company called Bre-X Minerals duped thousands of people out of millions of dollars.

On Friday, the story of that company will be cast onto the big screen as the basis for the movie Gold, starring Matthew McConaughey.

It has all the hallmarks of a classic Hollywood con man movie: money, luck, greed — even a suspicious death.  

But the story is based on real events, and former journalist Suzanne Wilton is one of the many people who won't soon forget the scandal. She covered it extensively while working at the Calgary Sun and Calgary Herald.

Gold, mystery and fraud

"We had penny stock promoter David Walsh here in Calgary running a business out of his basement promoting a junior mining company that went from pennies to something like $300 per stock over the couple of years," Wilton told the Calgary Eyeopener.

Bre-X had claimed a massive gold find in Indonesia in 1996, making millionaires of its early investors.

"It was set in Borneo [an Indonesian island], the middle of the jungle, the farthest community away you could get, in a place that was shrouded in mystery," said Wilton, who was working at the Calgary Sun when the Bre-X fraud started to unravel.

"It couldn't get more mysterious and sexy than that."

And it's those themes on which the Hollywood version looks to capitalize. McConaughey plays the part of Kenny Wells, the founder and CEO of the fraudulent company — a character based on David Walsh.

"Twenty years, it's been almost, for that scandal and I think [Hollywood] must have been living under a rock that they're only discovering this story now," said Wilton. "We know it well here."

Bre-X closed down in 1997 after the death of one of its founders and an independent assessment that said the purported gold find was non-existent.

The assessment concluded that the gold samples had been "salted" — meaning that someone enhanced drilling results by adding a bit of gold dust to the rock before it reached the testing laboratory.

It's estimated that investors around the globe lost $3 billion.

Bre-X shareholders are shocked to learn that there may be no gold in the Indonesian deposits that made company stock soar. 2:43

In 2007, Wilton travelled to Busang, Indonesia — where the infamous gold mine was supposed to be.

"This was an incredible journey," she recalled. "It was five hours overland through forestry concessions in the middle of Borneo, and then another five hours by boat up this raging river to a place that didn't exist on maps."

"We could have fallen out of the canoe that we were riding in and nobody would have ever found us."

It's there that Bre-X chief geologist Mike de Guzman jumped to his death from a helicopter — or was pushed, depending on who you ask.

'Still a whodunit'

"It was pretty amazing to go back to the place where it really happened, and hike into the jungle, where there were still people panning for gold," Wilton said.

"There are many people who still believe there is gold in this jungle."

A few years after de Guzman died, David Walsh passed away from a brain aneurysm in the Bahamas. A third executive, John Felderhof, was found not guilty of insider trading and now lives in the Philippines.

"Did we ever find out what really happened?" Wilton asked. "No. Nobody was ever held accountable."

Wilton said she's looking forward to seeing what kind of resolution Hollywood brings to its version of the scandal.

"It's still a whodunit," she said.

With files from the Calgary Eyeopener and the CBC's Digital Archives