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Readers reviews of Bre-X; The inside story of the worlds biggest mining scam

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The Bre-X story is interesting reading partly because of the locale and subject matter, but also because of the way so many experienced investors were fooled. This does not include the small scale punters. It also includes the major mining houses who were desperate to get a part of what was supposed to be the worlds largest gold reserves.


As I wrote in Fortune magazine at the time when the scandal broke, the real scandal lies with the listing and reporting requirements imposed by the Canadian exchanges. They accepted the type of resource reporting that was banned in Australia after the Nickel Boom at the end of the 60’s.


Bre-X was able to upgrade proven, inferred, and estimated ore reserves by the simply method of making a press announcement. The use of this mining terms was quite non specific, unlike the reporting requirements imposed on Australian mining companies.


It is a good read, and an even better one if you did not own shares in Bre-X. It does show how greed entrapped most of the players. The run up with Bre-X provided many trading opportunities. The stock did make money for traders, but not for investors. The story is about gold, and in this case rumors of gold. It could just as easily be about because many of the same factors apply. Even if you are not interested in gold, this book is worth reading just for an understanding of how companies can be shot into the stratosphere on just the merest whiff of a rumor.


The book gives an inside view of this process, but not the inside story. Those looking for precise answers are likely to be disappointed.



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