John Felderhof

John Bernard Felderhof (born July 28, 1940 ) is a Canadian geologist of Dutch descent who became known as a co-discoverer of the Ok Tedi deposit in Papua New Guinea , as well as through his involvement in the 1997 Bre-X scandal , one of the largest Stock exchange and mining scandals in Canadian history.

career

John was the fifth of twelve children of the Dutch doctor Hermann Felderhof and his wife Hermine. The family emigrated from the Netherlands to Nova Scotia in 1954 and settled first near Truro , later in Pictou County .

In 1962 , Felderhof graduated from Dalhousie University in Halifax with a Bachelor of Science , with a focus on structural geology and mining geology . (His brothers William and Herman studied at the same university. The former later sought to set up and finance mining companies, and the latter became the lawyer and lead prosecutor in the 1992 Westray coal mine explosion, which killed 26 miners.)

Felderhof found his first job as an engineer in a remote opencast mine of the Iron Ore Company of Canada near Schefferville (Québec). But in 1964 he went to Zambia , where he worked as a mining geologist. There he met his first wife Denise, who was from South Africa . In 1967 he moved on to the rainforest of Papua New Guinea, where he looked for copper as an exploration geologist for Kennecott Copper . According to his own statements, Felderhof was (after two missionaries ) "the third white man to go up the Fly River ". In fact, the region was so cloudy and rainy that there weren't even any aerial photographs , and consequently no accurate topographical maps. There in the central mountain region, not far from the border with Irian Jaya , he and Douglas Fishburn discovered the first outcrop of copper-bearing rocks. Apparently, Felderhof later got the impression that his role in the discovery of this famous deposit had not been properly appreciated, which probably led to a certain bitterness in him. In addition, he often suffered from the malaria that he contracted during this period.

In 1970 Felderhof went to Australia , where he looked for uranium deposits in the north of the country ( Queensland ) . Otherwise he had difficulties in finding good jobs, at times he even worked as a taxi driver and retired to Canada in 1974. There he worked for the consulting firm A.CA Howe International . On their behalf he traveled again to South Africa and Australia.

Howe International also participated in the Indonesia gold rush in the early 1980s. Finally, the company arranged a joint venture between the Australian "junior" companies Jason Mining and Pelsart Resources , on whose behalf Felderhof, together with the Australian prospector of Czech origin Mike Novotny, visited and assessed numerous areas of homeland in the jungle. This subsequently led to the establishment of the “Kalimantan gold belt” (the Mount Muro gold mine, the Mirah and Muyup project etc., all lie along a supra-regional geological “weld seam”, geosutur ). In 1986, Felderhof identified the Muara Atan courtship area, which was later to be renamed Busang, but did not yet carry out any major work there. During this time he separated from his first wife Denise and married an Australian woman of Dutch origin named Ingrid.

In 1987, Felderhof worked for the first time with the Filipino geologist Michael de Guzman . Shortly after, however, in October, the financial market for small North American and Australian exploration companies collapsed overnight, and Jason Mining lost all of their projects. However, Felderhof stayed in Indonesia and also increasingly sought domestic donors. In the early 1990s, for example, he became general director of PT Minindo Perkasasemesta , on whose board the brother-in-law of the Indonesian President Suharto and a close relative of the mining minister sat. However, the company soon collapsed when its massive balance sheet falsifications became known. To make matters worse, just like his chief geologist de Guzman, Felderhof had not been paid for months. Felderhof now felt compelled to go back to Australia.

There, Felderhof found a job with the financial investor Waverley Asset Management , which mainly raised capital for small exploration companies. After the financial crash, Waverley had taken control of several projects in Indonesia and Irian Jaya, including the Busang project, and Felderhof was hired to find buyers for these projects.

The Bre-X scandal

At the end of 1992, Felderhof sent his old friend de Guzman to Busang to carry out further investigations. He now assessed the project much more positively than previous geologists. In March 1993, Felderhof was contacted by Canadian businessman David Walsh , who happened to be looking for new investment opportunities. At Felderhof's recommendation, Walsh acquired a majority stake in the Busang project.

As a result, Felderhof developed a plausible geological model for the occurrence: Just like the Kelian mine and Mount Muro, Busang is also on the Kalimantan suture. This supraregional fault zone separates a block of continental basement in the northwest from shelf sediments in the southeast. Above all, however, the tectonic break enabled the rise of andesitic magmas and the formation of volcanic breakthrough tubes. Particularly where the main fault is crossed by the ring-shaped fault zones around these diatrems or other faults, hot, hydrothermal solutions penetrated , which were able to decompose and transform the disrupted rocks over a large area. In addition to sulfidic minerals, large amounts of gold have now also been precipitated in these zones. However, Felderhof was always reluctant to reveal the details of his model, ostensibly for fear that others might "steal" his concept and identify similar promising areas of hope elsewhere before he had the opportunity to do so. For similar reasons, visits by external mining analysts and geologists to the site were temporarily prohibited.

The peculiar fact that particularly in the so-called of Busang both on the surface "Southeast Zone" open-minded rocks, and the soils and waters were practically gold-free, while the local test drilling always delivered very excellent results in depth, he explained with the "leaching" of gold by rain and surface water.

In addition, Felderhof was responsible for the decision to routinely send all of the drill cores from the test wells for geochemical analysis, instead of only half of them, as is usually the case. The larger sample size made the analysis results more uniform (fewer “outliers” due to unevenly distributed coarse-grained gold, the so-called “nugget effect”), but this prevented a later review of the original rock samples, which would have made it possible to quickly discover the fraud .

The information on Felderhof's profits from sales of Bre-X shares during this time fluctuates, Vivian Danielson puts it at around 30 million dollars, but other estimates go up to 80 million dollars.

On March 10, 1997, in Toronto, Felderhof received the prestigious Prospector of the Year award from the Prospectors and Developers Association of Canada . In a now famous acceptance speech, which was obviously directed against Peter Munk, the President of Barrick Gold, who had tried (with dubious methods but ultimately unsuccessful) to acquire Busang, Felderhof exclaimed: “If you find something, someone else wants a piece of it. […] The only jungle they know is the asphalt jungle, and the “stones” they come closest to are the ice cubes in their scotch. I tell you: go and find your own gold! "

When it became known shortly afterwards that the mining company Freeport-McMoRan , which wanted to enter into a joint venture with Bre-X and carried out its own test drillings in Busang, could not reproduce the previous spectacular results, Felderhof long accused them of having them Samples mixed up or an unusable analytical method was used. But after the independent consulting firm Strathcona Minerals came to the conclusion that the test wells in Busang had been falsified systematically and on a large scale from a very early point in the project development, the Bre-X group of companies quickly collapsed.

Felderhof's role in this hoax is still controversial today. On the one hand, many suspicious factors speak against him or should have caught his eye (if he himself was not involved in the fraud). On the other hand, some observers consider him a “believer” who only saw what he wanted to see.

After the scandal, Felderhof settled in the Cayman Islands , which do not have an extradition agreement with Canada. After that he lived with his third wife in Bali, among other places . In 2007 he was charged with insider trading , but dropped due to a lack of evidence. Today he lives in the Philippines, where he runs a small business unrelated to mining, and continues to plead his innocence.

literature

• Vivian Danielson, James Whyte: Bre-X: gold today, gone tomorrow. Anatomy of the Busang Swindle. The Northern Miner Publications, Toronto 1997, ISBN 1-55257-003-7 .
• Brett Messing, Steven Sugarman, James J. Cramer: The Forwarned Investor. Carrer Press, ISBN 978-1-56414-881-0 . (Google Books)

Individual evidence

1. ↑  ( Page no longer available , search in web archives ) Shannon Kari: I am not hiding ': In a Post exclusive, John Felderhof says he, too, was a victim of the Bre-X fraud and endures as the man who can never clear his name. Canada.com, March 13, 2010.