The mysterious death of a geologist - The Six Billion Dollar Gold Scam, Ep 1, BBC World Service - Bilingual Subtitles
First, a warning.
The following episode contains difficult subject matter, including references to suicide and death.
A man named Michael de Guzman is standing in front of a hotel mirror.
He's getting ready for a night out in a mining town in East Calimantan, Indonesia.
De Guzman is a short, heavy-set Filipino man.
He calms his thick black hair to work.
and opens up his silk-black shirt to show off his 24-carat gold chain.
De wore a lot of gold.
It's the evening of March 18, 1997.
He heads to a karaoke bar, has a few drinks, sings his heart out to Frank Sinatra.
The next morning, Rudy Vega, De colleague, knocks on his hotel door.
De Guzman opens the door.
He's disheveled, half awake.
He's here to take him to the airport.
They make it to the helicopter.
Rudy Vega rushes to get him ready, and de Guzman climbs into the chopper.
He's by himself back there, and the pilot helps him with his seat belt.
De Guzman doesn't recognize the pilot.
He's not the usual guy.
The front passenger door snaps shut.
Check.
The rear door is pushed forward and closed firmly.
Lock check.
Then they take off, headed for Busang, the site of the largest whole discovery in the world.
The chopper flies across a blanket of green jungle.
It tips toward a peat swamp, crocodiles slither into the water, the surface ripples from the downdraft.
Below, lie nine-foot king cobras and other venomous snakes, wild pigs, gorge for nuts and roam through the vines.
It's all familiar to Daguzman.
He's taken this flight many times.
It's now 10.30 a.m.
Central time.
20 since takeoff.
The weather and visibility is good.
The helicopter is flying at an altitude of 800 feet.
A routine flight until suddenly, something's wrong.
There's a pop, a loud bed.
and a woosh of air, the pilot maintains control, dips the helicopter to reduce speed, and he looks back to see what's happening.
He sees an empty seat.
The left-hand door is fully open.
De Guzman is gone.
The pilot radios the tower, shouting, my passenger has jumped from the helicopter.
Michael DeGuseman plunges 800 feet into swampy Borneo rainforest, presumed dead.
Ten years later, I was sent halfway around the world by the Calgary Herald to investigate De Guzman's death.
This has haunted me ever since.
How was he tied up with the wild ride of Brie X?
small Canadian mining company, and they're once in a century gold discovery.
It's still a mystery.
I'm Suzanne Wilton.
From the BBC World Service and CBC, this is the $6 billion gold scam.
A story about the length span.
People will go to in pursuit of getting rich, and how greed can obscure the truth.
This is episode one, The Fall.
I've just landed in Jakarta, Indonesia.
This is where it all began.
I'm here to trace the events that led up to that moment in the helicopter.
It's hard.
and loud the opposite of my Canadian hometown, Calgary, Alberta.
All these years later, I still have questions about what happened at that exploration site, and I'm here to get answers.
Starting with what happened to the chief geologist, Michael De Guzman.
Nobody was bigger on the scene than De Guzman.
And it was almost like Jakarta in the 1996,
97, and Guzman, with infinite amount of money, were virtually made for each other like a match in heaven.
Jim Richards is an Australian geologist who came to Indonesia in the 90s.
They could not get the money in fast enough.
They were chucking money at us as geologists.
Spend it, spend it, drill more holes.
It was just nuts.
During the mining boom here in the mid-90s,
Guzman from around the world, mostly from developed countries, descended on Indonesia, exploiting the country's mineral wealth for their own gain.
And boom meant there was money to spend.
I've never seen a wall of money coming at you like that, that you were insisting.
that you spend it, normally it's completely opposite.
All of the sort of restrictions that might have been there from quite an Islamic country weren't there.
It the drinking and the sort of free living and the fast and loose lifestyles that were going on.
mining scene, the rules were different.
They lived in a bubble of sorts, mostly separate from the locals.
Flush with cash, often spending it on booze and women.
I went into one hotel and I have never seen so many prostitutes in my life soliciting men and women.
In the vast atrium of that hotel, it was just one vast hallhouse.
It just insane, the whole place.
I've never seen anything like it, and I've been around, you know?
And de Guzman, an experienced geologist with a track record of finding gold, was deep in the scene.
To Guzman had women,
every town,
every nook and cranny he went through,
there were girls that he had on his payroll,
that partied with, that you know, had as his girlfriends, and it was, yeah, it was one big rolling party for Mike.
Everybody I spoke to was, if you were out with Mike, it was a big night.
To Guzman embraced the expat life.
He up the strip clubs, loved wild knights, and chasing women.
The of him that was the narcissistic side of him, which was women, it was booze, it was parties.
Psychologists who worked under him referred to him as a tyrant because of the long hours he expected them to work on site.
What was very controlling, he did seem to have a very forceful personality.
De Guzman was often described as an enigma, hard to get to know.
If he wasn't partying, he kept to himself.
He was born in Manila in the Philippines on Valentine's Day in 1956 and got his degree in geology in 1983.
He headed to Indonesia in the late 80s, looking to make it big and he chased gold as hard as he chased.
women.
He'd obsessively track for days through the intense heat of the jungle, looking at rock formations and signs of gold, spent hours writing up reports.
De Guzman was a perfectionist, hyper-focused on the hunt for the mother load.
The De to giant gold deposit every geologist dreams of.
And that search took him to a place locals call the land of hope, where he met the man who would change his life.
Calli-Mantan is the Indonesian portion of the island of Borneo, the largest island in the Indonesian archipelago.
It's home to massive mineral deposits.
Calli-Mantan means river of gold and diamonds.
Calli is a river.
Imas is gold.
So, to be minding gold and cowainment time since, well, at more than a thousand years.
So, it's been a social wealth for as long as history goes back almost.
Scottish geologist Roger Marjorie Banks spent half his working life mining in the remokest parts of the world.
When you go the panning dish to a gold-bearing stream and scoop up a of dirt and shake
it around and there's these gleaming buttery yellow grains in the floor of the dish,
it's a moment of magic excitement which I think everybody's caught up in.
But it's a beautiful object, it's a valuable object.
A mineral deposit that is rich enough to be worked for a profit is called an ore body.
That's what de Guzman and every other exploration geologist was on the hunt for.
But convincing people that an ore body is worth mining takes way to Asian.
Someone who had it and in spades was a Dutch geologist called John Felderhoff.
He had a rugged, strong sort of face with almost built-in scowl lines.
Felderhoff was often compared to the movie character Indiana Jones.
He was quite an intimidating sort of guy actually.
Particularly with his heavy Dutch accent, which was there, and his dar taciturn character which he had.
No, no, he was quite a scary guy until he got to know him.
He'd made a name for himself a couple of decades earlier,
as the man who discovered a giant gold and copper mine in Papua New Guinea.
In 1980, he moved to Indonesia, lured by the promise of gold.
In the mid-80s,
Marjorie Banks and Felderhoff spent a day traveling up a river in a small boat and a couple of days trekking and camping out at a gold property,
a parcel of land that Felderhoff had these rights to, and he was trying to sell it to Marjorie Banks.
John's an interesting character, actually.
You know.
saying, which is a lot better, of than saying more than you know, but it gives
the impression of being an honest guy and the fact that I can doubt she's a competent geologist.
A man of strong opinions I would say, probably someone who doesn't tolerate fools gladly, but I got on well with him actually.
I enjoyed his company.
The deal went nowhere with Marjorie Banks, and continued on his quest to find a gold property that would appeal to investors.
There was a guy who wanted to go smoke a cigarette and drink a beer after digging in the rocks all day.
Jennifer Wells worked for McLean's Canada's National News Magazine, and she was on the story for years.
Jennifer has here an entire plastic tub of files.
Files from her days of investigations, and there are pages and pages of notes and interviews.
all these years were a long time since.
Why?
Obsessive?
It's an unresolved story.
Jennifer remembers Felderhoff had this reputation for sniffing out gold.
And he had a very interesting background in terms of being a so-called river walker.
Multiple sufferer of malaria.
What's a river walker?
Oh, just somebody who believed who had almost a mystical character.
And I think in geologic terms it would be someone who has such a connection with the land.
that they have an almost innate ability to understand where, you know, seams of minerals may be present.
In the mid-80s,
Felderhoff earmarked a site in a small community called Boosang,
deep in the jungle of Calimantam,
as remote as you there was gold here, but he needed to persuade more people, and that was proving difficult, even for him.
It in 1987 that Felderhoff and de Guzman crossed paths for the first time.
The two met while working at the same gold mining site in Calimantan, the Land of Hope.
Pretty quickly, they came to share their love of geology over beers in the bush.
De Guzman's geological expertise, his determination to find gold blew Felderhoff away, but they parted ways when De Guzman left the site.
But Felderhoff didn't forget De Guzman.
And a few years later,
the two geologists reunited when Felderhoff he needed someone to help push his theory that Usang was worth drilling for gold.
He knew de Guzman would be a valuable asset, a driven geologist thirsty to make a strike.
After agreeing to work with Felderhoff,
de Guzman trekked over 32 kilometers of remote jungle and started producing piles of reports about the geology around Busang.
Like Felderhoff, he was convinced there was gold there.
It's terrain I remember vividly.
When I trekked through the remote jungle in 2007, It was a difficult journey.
It took five hours over land and another six in a canoe.
Buseng is the last community in a series of river villages.
Today, Kalimantan is largely inhabited by the indigenous Dyak people.
The dyax,
they made tremendous guys to help with you in the field because they never got lost,
they find their way through the jungle, they tough, they were reliable, and were really just great guys.
Reporting on this story for the Calgary Herald in 2007,
10 years after Michael De Guzman's death, I traveled up the Mahakam River to meet local diets.
I've never forgotten the intense greens of the jungle and the humidity.
You go outside and you're instantly covered in sweat.
It's so beautiful.
But it's also a daunting, difficult place for visitors.
Remember, what me were terrifying bugs and leeches that climb inside your trousers
and worm their way into your boots, binds with sharp hooks like barbed wire, carpet the jungle.
It's not an easy place to work.
But to Guzman and Felderhoff believed they could find their fortunes in Busei.
What, to create an ore body, it's not just what the geologist finds or the metal in the
ground, it's the preparedness of your boss, of your company, to put up the money.
The shareholders, the investors, you've got to believe, if you want them to believe, you've you've got to believe.
You've got to really put yourself on the line,
and if you do that, and it works, then you have created that old body out of nothing.
You think it's just something they're lying the ground waiting for the first person to stumble over it, but it's not.
It's a human creation,
like an artwork,
and the guy who actually That's
is often the exploration geologist who believes in it and has the personality to sell it and to convince people.
And that's human characteristic which I guess you either have or you haven't."
De Guzman and Felderhoff both had this enthusiasm, but luck wasn't on their side.
Good evening, it's Black Monday.
There's never been a day like this one on the stock market.
Fear, pandemonium, we can have it in financial markets throughout the world.
Foreign investors pulled out after the global stock market crash of Black Monday on October 19th, 1987.
market, they waited for gold to go up as stocks died.
It didn't.
By the closing bell on the New York Stock Exchange,
the Dow Jones Industrial Average had plunged the record 508 points, wiping out all of this year's gains and more.
By 1993, the Dow Both men were down on their luck, and they needed a break.
The two had expertise, ambition, drive, but it wasn't enough.
For their dreams of gold to become a reality, it would take a third man.
Just as their fortunes.
were at a low-app, Felderhoff got a phone call from a small-time Canadian mining executive he'd met in Australia back in the 80s.
David Walsh was an unlikely saviour of faltering dreams.
He started a small mining company called Briex Minerals in 1989.
The Brie was for his son Brett, the ex for exploration, Briex.
Walsh's motto was, quote, If you believe in something enough, you can sell it.
But he was never very good at the selling part, according to former business correspondent from McLean's magazine, Jennifer Wells.
To me, David didn't stack up at all.
He didn't have the salesmanship appeal of the standard promoter or the promoters that I knew.
who were always fascinating characters.
He didn't have the refinement of a smart chief executive.
He didn't have the ability to engage comfortably in my experience.
And in 1992, Walsh declared personal bankruptcy.
Briex limped along barely.
By the beginning of 1993, he had to make his own luck.
His thoughts turned to the Indiana Jones geologist he'd once met.
Maybe he could give him Walsh got on the phone to John Felderhoff.
The timing was perfect.
Felderhoff and De Guzman needed to drum up investment for Busang.
Felderhoff and Walsh agreed to meet a month later at a hotel bar in Jakarta.
There's been a long time between drinks for those guys,
I there have some pretty tough projects and nobody had ever made it, they'd never made it those guys.
So this was there,
it was almost like their last chance, but he was a kind of, sort of Desperado, who can pull a rabbit out of the hat.
That's the nature of these small mineral exploration companies.
One minute you've got nothing and you're on the bone so you're backside.
The minute you could be worth hundreds of millions of bucks.
It's a really crazy kind of industry like that.
But Walsh wasn't completely sold on Boo saying yet.
There were still other sites he was looking at.
It worked like this.
The Indonesian government would sell the rights to a parcel of land called a property,
allowing a company to explore it for a certain period of time.
Of course, you wanted to make sure you picked the right property.
One that would yield the most gold for the money you invested in exploration, and you needed experts for that.
Walsh brought geologist Kevin Woodell along from Calgary to advise him on which mining properties to pick.
And on the first morning when we got there, there was some parade.
I know why there was a parade,
but right outside our hotel room,
we could see a parade on
I guess it's one of the main avenues of Jakarta or whatever and and David of course came right
it up right away with the line he goes look Kevin gee we just barely got here and they're
already having a parade for us and that was a pretty funny moment that kind of started it off right there.
Walsh's son Sean was with him on the trip supposedly as a graduation present but Kevin Woodell suspected it was because Walsh needed his son's American Express card.
If you're wondering Walsh had any money to invest in gold exploration.
If needed to borrow money from his son, it's complicated.
There was no money in the company, but Walsh and his wife owned stocks in Briex.
And with a financial sleight of hand, Walsh manipulated those stock options.
and managed to raise 200,000 small potatoes in the mining world, but enough.
I'm standing in the lobby of the Saripan Pacific.
The meeting that sparked the meteoric rise of Briex minerals started right here.
I just remember it was on one of the main streets of Jakarta and they had like a hundred workers and the grass outside was lush.
There were palm trees, nice big palm trees.
The hotel itself was five star.
I mean it was first class all the way.
It had a flower shop in it and it had a lot.
lobby, a nice lobby, and we did meet up with Felderhoff in that lobby a few times.
David Walsh, Sean and Kevin Wedel stayed at this hotel in Jakarta, the Saripam Pacific Hotel.
And it's where the meeting took place, where Briex and Gold Fever began.
there was an urgency to everything.
It was business-like and they...
They were going to get some sort of deal done.
That pretty apparent.
The dinner was a very formal affair.
Kevin had to change out of his shorts and Hawaiian shirt into a suit.
John Felderhoff, normally a disheveled figure, his glasses held together by tape, was also wearing a suit.
Walsh suited up, donning a tie, something he hated to do.
There was a strict etiquette for these two maverick mining personalities to follow, and their futures depended on it.
If you wanted to set up a company, for example, in you had to have, by law, an partner.
That's Roger Marjorie Banks again.
John Felderhof suspected he could convince Walsh to innovate.
and get the Indonesian government on side, but needed the dinner to go well.
And there was another man at the table, someone who represented an interested third party.
Marjorie Banks says no mining deal went through unless you had a businessman.
Yes, they were all men with close ties to Indonesian President Suharto.
And the very best partner to get was from the top, a member of President Suharto's family.
Next best thing would be in general,
and after that you'd try and find some a super-rich businessman and everything would come plain-sitting for you.
The Man, for example, needed a lot of permits.
It still an area with a lot more restrictions than anywhere else.
Kevin Woodell remembers there was, indeed, a pretty big roller present with strong connections to the Indonesian government.
You know, there were some big players and they were all there to, you know, look at money angles and to get things going.
And this Adam Tobin, who was apparently We had inroads to Sue Hardo, the president.
But their big roller, Adam Tobin, their Indonesian partner, didn't sign on immediately.
Walsh didn't either.
The next few days were tense, but finally, Walsh was in.
He agreed to pay US$80,000 for the rights to explore Busang for a certain with Felderhoff taking control of operations on the ground.
Walsh's role was to convince potential investors there could be gold so they'd fund the exploration.
And Tobin, the prominent Jakarta businessman with links to Suharto, was on board.
to.
He'd be able to smooth the way for their license to explore the area with exclusive rights.
When confidence of a deal was riding high, Felderhoff made a of putting Michael De Guzman forward as his project partner.
John Felderhoff,
actually gave me one of Michael de Guzman's cards and gave one to David and made it very clear that at any project,
in any work he was doing in Indonesia for David Walsh and Breax Minerals,
Michael de Guzman would be involved and would be part of the project.
I mean, we were told in no uncertain terms that anything John Felderhoff worked on, Michael de Guzman worked on as well.
According to Kevin, once the deal was done, John Felderhoff and de Guzman refused to let him be involved in the project.
Kevin and David stayed in touch though.
You know, we just talked.
Kind of light hearted about how things were going and you know the progress
Being made like a you know back in these days everything looked like progress
They kept drilling they kept getting good results things kept getting bigger the tonnage kept growing everything look tick
Briex was something called a junior mining company.
Typically, their role was to explore properties to see if they were worth investing in for bigger companies.
To do this, companies like Briex had to promote their stock to get the money to fund the exploration.
David Walsh needed a credible profile in the press to help draw attention to boosting and encourage investors to buy BRIAC shares.
While Jennifer Wells followed BRIAC's from McLean's magazine, she met David Walsh a couple of times.
He decided on the advice
of sort of communications or public relations people who are working for the company that
his best bet would be to find a reporter who would be sympathetic to their story.
in order to go big on a big business profile in the American press that would sort of set the stage for David Walsh internationally.
And did they find that?
Well, they did.
They found it in Fortune magazine and Richard Behar is the one who wrote the fantastic story.
Richard Behar, Richard was one of the only journalists to make it to the exploration site in Busang.
He recorded hours of interviews with the key players.
When my the report invited a reporter from Canada.
When my production was released, with Behar.
They discovered he still had interviews on cassette tapes stored away in a storage unit in downtown New York.
He them out and has given us permission to use these Briex tapes.
questions I have for you now as per item 17.
Three months after the meeting at Saripan Pacific.
David Walsh, Michael de Guzman, and John Felderhoff were at work exploring the Boussaint site.
They had a license to explore the land from January 1993 to December 1993, one year to make a decision.
In October 1993, they drilled the first hole, nothing.
Then they drilled a second hole, nothing.
Things were tense.
The were arguing.
Felderhoff was losing faith.
It was fast approaching December 18th.
The day they could drill before their license ran out.
They only had a matter of days left.
But De Guzman wanted to keep going.
He said he was certain there was gold.
He could smell it.
And he knew just where to drill hole 3 and 4.
in a dream.
I'm trying to bring that to life a little bit and what's the story you heard what made
him quote that's audio of Richard Behar talking to David Walsh in winter 1997 probing his
memory after his dream to Guzman phoned David Walsh I guess Mike woke up you know what's
about thinking about it woke up in the night went to the exploration office in the camp,
got the maps out, geological or whatever, and Caesar up very excited to confirm his hypotheses.
Now, where was Caesar at the time?
Where though at the camp that says our puss post de Guzman's right-hand man and a senior geologist for briex
Where would Guzman have been at the camp?
Oh, they would have been at the camp.
That's why I understand it.
Yeah, and He was looking at maps and other geological information And then, suddenly, he had a Eureka thought, what was it he realized, though?
I thought I guess this Maridiatream, something or other, I don't know.
He wanted confirmation of his hypothesis, so he woke Caesar up.
Now, was it also John's hypothesis, or no, not at that point?
Um, she's priced, uh...
I know, this is...
this is...
I don't know.
So they drilled the spot apparently pinpointed by Dagoosman in his dream.
The results came in.
Hole 3, gold was detected.
Hole 4 was even better.
Nothing this scale had been found in any of the other samples.
And each following drill not only reconfirmed Dagoosman's Eureka moment, but improved upon it.
They discovered the mother load.
Now this is John's best memory.
what he said to you and he woke you up from your sleep.
I the harp on it.
This is the stuff journalism is and all he could remember saying was when you
picked up the phone he said look David We've got a monster by the tail.
You know, it's only part of me.
What do you mean?
And he said, we've got a monster by the tail.
So, you can take that saying a few ways.
To have a monster by the tail can mean to be in control, guaranteed of success.
Or, it was a monster underground about to be awoken because John Felderhof believed they'd only just discovered the tip of its tail.
But there's enough.
probably not what Felderhof meant.
If you let go of the tale of a monster, you're in trouble.
It will catch you.
But if you hold on, you could also be in trouble.
When news hit about the discovery of the gold, Briex began to ascend the stock market at lightning speed.
Between December 9th and and May 1996, the price went from barely 20 cents to 200 Canadian dollars a share.
At its peak, BRIEX was valued at $6 billion.
People threw their life savings into it.
was heralded as the biggest ever gold discovery.
At its height, Briex estimated its bussing site held almost 80 million ounces of gold.
That's 8% of the entire world's gold resources.
Well, we heard about Briex.
from reports and the press and particularly the mining press and we were all jealous as hell.
It that Brienx had found the one we all hope to find.
The monster was well and truly loose.
There'd been nothing like Brienx.
It was on an unprecedented scale and it would make many people rich be on their wildest dreams.
Now I'm returning to this story traveling through Canada, Indonesia and the Philippines to uncover why Michael De Guzman falling from the helicopter.
after turned those dreams of gold into a waking nightmare.
Thanks for see in the next video.
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