Warning: Potential Spoilers for 'Gold' Upcoming.
The McConaissance isn't over yet! After tepid reviews for Sea of Trees and The Free State of Jones, many were wondering if the glory days — 2011-15, encompassing hits such as True Detective, Wolf of Wall Street, Dallas Buyers Club, Interstellar, Bernie — of everyone's favourite Texan were over. But fear not, he is back and swinging, playing the lead role in Gold, the new teaser trailer of which dropped yesterday. Check it out below:
Looking like Fitzcarraldo meets The Big Short, Gold aims to be both an epic yarn in the jungle and a tale of intrigue in the financial centre. More importantly, its a chance for McConaughey to restate his claim as one of the finest actors in Hollywood. With a release date on Christmas Day itself, it's sure looking to strike gold in the form of a couple of Oscar statuettes. But is it based on a true story? Read on to find out about the biggest mining related stories of all time.
One Bold Man
John Felderhof — whom McConaughey will play — was a man with a vision. A somewhat idiosyncratic individual, he had built up his reputation as a geologist by uncovering a huge gold and copper mine in Papua New Guinea. With this reputation behind him, he was given the go ahead in 1993 by nearly broke penny-stock mining company Bre-X to dive deep into the Borneo jungle to see what he could find.
Accompanied by his friend Michael de Guzman, a filipino mining inspector, initial findings promised to be good. By 1995, an alleged deposit of 2.7 million ounces of gold was found. Analysts estimated the potential amount of gold in the site to be around 30 million. Felderhof claimed it was more like 45, before saying it:
"has the potential of becoming one of the world's great gold ore bodies."
The Stocks Kept On Rising
Naturally, investors were interested in this hot new find. The stock — which was 30 cents to a share in 1988 — soon rose to over $59 in October '95. After a company conference in 1996, in which Felderhof hinted that there may be over 100 million ounces of gold hidden in the jungle, shares reached an all-time high of $187.
Soon the value of the company was estimated to be a mind-blowing $6 billion, leading to Lehman Brothers calling it:
Subsequently everybody wanted a piece of the pie, including the Indonesian authorities, who claimed that they had a right to the land. As a result, they cancelled Bre-X's permit. This was soon resolved when they struck a deal with two other companies, with a major stipulation that 10% would go to the Indonesian government. One of the key parts of the agreement was that they also would have to check the site. Yet when they went to check on the mine it turned out:
It Was 'Fools Gold'
There was nothing there. A miraculous $6 billion investment had been built up out of thin air. What de Guzman had actually been doing was 'salting' these supposed gold samples with gold dust. To achieve this he used shavings from his own wedding ring and later by buying $61,000 worth of locally sourced gold. Once this was found out, $3 billion fell off the companies worth in minutes, causing the Toronto Stock Exchange computers to overload not once, but twice in the same day. The company collapsed. It is generally considered to be the biggest mining fraud of all time.
Three weeks before the house of cards tumbled, de Guzman fell out of a helicopter going over the jungle. He died instantly from the fall and was eaten by wild boars. Many say it was suicide. Others think it was murder. Felderhof was much cannier, selling around $80 million worth of his stock before the scam was uncovered. Yet the bigger question remains:
How Did They Get Away With Such Blatant Lies?
Usually when gold is uncovered, independent companies are contracted to come along and verify the veracity of such claims. However, with this case, because the lies were so big, it seemed much too outlandish to doubt. This, some say, was coupled with the innate charm of both de Guzman and Felderhof. Investors got carried away, and soon the lie got somewhat out of hand!
As former Toronto Stock Exchange President Rowland W. Fleming said at the time:
"If someone is simply lying, in a huge and stupendous fashion, as appears to be the case with Bre-X, all the disclosure rules in the world will not protect either the gullible investor or, it seems, even the most sophisticated one"
These claims made it the biggest mining fraud in history. According to drilling company Strathcona Mineral Services Ltd, they were:
As for Felderhof, he maintains his innocence, telling a reporter from The Globe and Mail:
"I have never in my life broken the rules and regulations of a stock exchange."
After a protracted legal battle, he was acquitted in 2007. He now owns a small grocery store near Manila. This film will be a chance to hear his side of the story: was he in collusion with de Guzman, or did he really believe that he would be one of the richest men alive? One things for sure: with so much great material to mine from the case, Matthew McConaughey may likely strike gold again! Even if its terrible, it still has a chance. The Weinstein Company are producing.
Are You Excited To See 'Gold'?