Bre-X: Gold Today, Gone Tomorrow - James Whyte, Vivian Danielson

[Liberty]

[amazonsearch]Bre-X:  Gold Today, Gone Tomorrow[/amazonsearch]

 

Started this one. Wanted to know more about this historic scandal.

[gfp]

Michael Smith of MFC Industrial (MIL) ended up with some of the scraps of Bre-X (and the tax assets, I believe).  He just did an interesting deal for Compton Petroleum this month.

 

http://www.cubanet.org/CNews/y01/dec01/21e9.htm

[Liberty]

Here's a TV program that gives an overview of the Bre-X fraud for those - like me - who weren't around back then.

 

http://www.youtube.com/watch?feature=player_embedded&v=pNvixeqlKdQ

 

http://www.youtube.com/watch?feature=player_embedded&v=0YNnjitbcaE#!

 

http://www.youtube.com/watch?feature=player_embedded&v=-2hTKWZZz74

[Uccmal]

I had just started investing at the time.  I had read alot about Buffett by that point.

 

I worked out how much estimated gold there was, and  its toal value at $400/ounce.  Basically, the amount of gold in the ground came nowhere near covering the market cap of the company and I was being generous.  If the find had been real the price of gold might well have dropped from oversupply.  If Bre-x had mined out all of the gold that day the investors were going to be left with a huge shortfall.  My assumption of course was that this was a one off discovery.  Bre-x needed two or three of this size to pay back shareholders. 

 

It was my first introduction to a mania in real time.  It took me ten minutes of calculations to determine it was a really bad deal. 

 

So, I was well prepared to avoid the Tech runup that followed.