Company Bre

Company Bre Introduction This paper presents the events associated with the scandal that involved the Bre-x mining company. Historically, the seduction of Gold business has always brought bad scenarios as people maneuver in the quest of enriching themselves. A Canadian mining company, Bre-X was incorporated and headed by David Walsh.Advertising We will write a custom essay sample on Company Bre-x Scandal specifically for you for only $16.05 $11/page Learn More During the year of its incorporation, it was listed on the Alberta Stock Exchange. Bre-X was a small mining company that dealt with gold mining. The events that surrounded this company are articulated in this paper. Company Bre-x scandal Bre-X was not profitable until the year 1993 when it exploited the gold in Busang Indonesia. The company became profitable, and its shares consequently became valuable. This led to bigger mining companies wanting to share in the fortune, and several agreements were made by Barrick , Bre-X, The Indonesian government, and the Freeport an American company. The arrangement enabled Bre-X to receive the largest share. Eventually, it turned out that Freeport was tricked, and Borneo had low gold deposits that were poor quality-salted gold. A court case was opened, and several people who were suspected of the crime died mysteriously. In addition, Bre-X shares price collapsed drastically before it was closed down (Francis, 1998). David had followed the advice of Felderhof, a geologist to buy the Busangin Deposits in Indonesia. David hired him as the General manager in charge of Busang explorations. Little was known until when the Busang Gold deposit value was estimated to be 2 million Ounces in 1993 and a final valuing of 30 million in 1995 by Mr. Guzman, a geologist. This saw Bre-X’s shares rise tremendously to $14.87 in 1995.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Lea rn More The share value hit a peak of $280.00 in April 1996 when Bre-X started trading on the Toronto Stock Exchange. The value of the gold deposits continued to increase, and had an estimate of $200 million (Francis, 1998). Major mining firms such as Barrick Gold Corp organized to take over, but they failed. The Indonesian government was involved, as well as the Freeport-McMoRan Copper Gold an American company. The initial agreement was that Barrick was to receive a share of 67.5%; Bre-X was to get 22.5%, and the Indonesian government was allocated 10%. The final deal between Freeport and Bre-X led to an agreement that Bre-X and Freeport exploit the Gold. In this agreement, Freeport was to receive a 15% share, Indonesian interests 40%, and Bre-X 45%. Borneo, the side of the Freeport had low deposits reporting 0.01 grams. On the other hand, Busang, the Bre-X part had large and rich deposits reporting a grade of 4.39 grams. The gold in Borneo was not only small, but was also said to be salted. Salting of gold makes undermines the quality of gold and is not as shiny as pure gold. This raised alarm, and Freeport demanded answers. When investigations were started, several people die mysteriously including Walsh, followed by the tragic downfall of Bre-X mining company (Salinger, 2005). Conclusion The Bre-x mining company scandal had far reaching consequences on the business and individuals involved. Notably, some of the suspects died mysteriously while others went to places where they could not be reached easily to testify in the case.Advertising We will write a custom essay sample on Company Bre-x Scandal specifically for you for only $16.05 $11/page Learn More The only surviving culprit of the Bre-X mining company, Mr. Felderhof has been charged with several cases including insider trading. However, there is no enough evidence for him to be charged. The justice system in this region did not act fairly to protect the interest of those who had invested in this company. References Francis, D. (1998). Bre-X: The inside story. Toronto: McClelland-Bantam. Salinger, L.M. (2005). Encyclopedia of white-collar corporate crime. Thousand Oaks, Calif: Sage Publications