David Walsh (mining contractor)

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David Walsh (born August 11, 1945 in Montreal , Canada , † June 4, 1998 in Nassau , Bahamas ) was a Canadian businessman in the raw materials and mining sector. In 1997, as the founder and chief executive officer of the exploration company Bre-X Minerals , he gained worldwide fame for his involvement in the Bre-X scandal , one of the largest stock exchange and mining scandals in Canadian history.

Life

Walsh's family was of Irish descent and lived in the petty bourgeois Montreal neighborhood of Westmount, an English-speaking enclave in the largely French-speaking city. David was a poor student and never graduated from high school. Like his father, he was already a stockbroker as a teenager . In the mid-1970s, he worked for Midland Doherty (now Midland Walwyn Capital ), where he became vice president of institutional equity sales. During this time he married the secretary Jeannette Toukhmanian. In 1982 he moved with his family to Toronto , where he continued to work for Midland. After legal disputes with his employer about unpaid salaries, Walsh started his own business in 1983. He founded Bresea Resources (named for his two sons, Brett and Sean), which was listed on the Vancouver Stock Exchange and examined a gold deposit on Sturgeon Lake , as well as other oil and gas deposits.

During a trip to Australia in 1984 Walsh met the Canadian geologist John Felderhof , who made him aware of the promising prospecting opportunities in Indonesia . A first project in Kalimantan was soon scaled back when a year later a real little “ gold rush ” broke out in the local Casa Berardi district . After a significant gold find , hundreds of exploration and mining companies poured into the province of Québec to stake their claims there. Walsh founded his second company for this purpose: Ayrex Resources , which was listed on the Alberta Stock Exchange in 1986 . However, after the test drillings did not produce any useful results, Walsh sold his Ayrex shares again and Bresea looked for platinum in the Labrador trough instead .

In October 1987 the overheated financial market for small exploration companies collapsed unexpectedly, which also put Walsh's company in dire straits. At that time, Walsh applied for Bresea to be listed on the Montreal Stock Exchange and renewed his old contacts with local stockbrokers.

In 1989, Walsh founded Bre-X Minerals , which was listed on the Alberta Stock Exchange and acquired several claims in the Northwest Territories and Northwest Québec. Again there was no success. It was not until 1991 that the market for "junior" companies revived after the unexpected and spectacular diamond find by geologist Charles Fipke in the Lac de Gras area in the Northwest Territories became known. In the following "diamond rush" (one of the largest in Canadian history) Walsh also tried his luck. After initially encouraging results, this project also petered out again. In 1993 Walsh was on the verge of bankruptcy.

The Busang hoax

In this situation he remembered Felderhof and contacted him to ask about other promising projects and, on his recommendation, bought a majority stake in the Busang project in Indonesia. As a result, Walsh focused almost entirely on raising capital and increasing his company's share price. He left the technical aspects, such as resource calculation , to geologists or external consulting firms.

After initial difficulties, the project soon seemed to turn into a promising deposit . By February 1996 the resource was estimated to be at least 16 million ounces . As a result, the company's stock market price rose to unexpected heights and even experienced analysts were caught up in the media hype. In April, Bre-X was listed on the Toronto Stock Exchange , where the company soon appeared in the top three hundred companies index (TSE 300). In May, the share hit a record $ 286.5. This increased the company's market value to $ 6 billion. From September it was listed on the New York NASDAQ . According to the Ontario Securities Commission , Walsh sold $ 7.5 million in Bre-X stock options and his wife Jeannette for $ 20.8 million during that time. In addition to the Busang project, Walsh also acquired other concessions on the Sangibe Islands in northern Sulawesi and on Sumatra . For the latter he founded his own company: Bro-X Minerals .

Due to legal disputes over land titles and exploration permits, the Indonesian government under President Suharto gained increasing influence over the Busang project. Various large mining companies such as Teck Resources , BHP Billiton and Placer Dome sought a joint venture with the small "Junior" company. At first it seemed that Barrick Gold would make the race for the "find of the century", but eventually the Indonesian government leaned towards Freeport-McMoRan . Surprisingly, Freeport's control wells have now returned no significant gold grades. When these results were also confirmed by the consulting firm Strathcona Minerals , it was clear that Walsh had been caught in a large-scale fraud.

In March 1997, the stock market prices for Walsh's company plummeted and became practically worthless in a very short time. Soon afterwards he had to declare bankruptcy and retired with his family to the Bahamas .

Until his death from a massive brain hemorrhage, Walsh protested his innocence and tried to restore his reputation. Shortly before, he was attacked by two masked men in his apartment and threatened with a weapon. The attempted robbery failed, however.

literature

Individual evidence

  1. ↑ CNN.com article, obituary dated June 5, 1998
personal data
SURNAME Walsh, David
BRIEF DESCRIPTION Canadian businessman
DATE OF BIRTH August 11, 1945
PLACE OF BIRTH Montreal , Canada
DATE OF DEATH June 4, 1998
Place of death Nassau , Bahamas