The Greatest Mining Scam In History

Jumping from a helicopter 800 feet over the Indonesian jungle, Michael de Guzman took his own life on March 19, 1997...

In the years before his death, de Guzman had discovered an amount of gold believed to be so large, it was the equivalent of 4% of all the gold ever mined in history. Many investors made millions, as the share price went from literally pennies a share in 1993 to $280+ a share in less than four years.

Back in Indonesia, each successive test of the earth by de Guzman showed more and more gold. Mining analysts visited Indonesia, and wrote up glowing reports. An analyst from JP Morgan went as far as to guess there were 150 million ounces at de Guzman’s site... over $100 billion worth of gold at today’s prices.

Not surprisingly, large mining companies started homing in. BHP Billiton unsuccessfully attempted a takeover. Indonesia’s President Suharto stepped in, saying this project was just too big for de Guzman’s company. He suggested they team up with gold giant Barrick as a partner.

Then came Jim Bob...

A geologist by training, Jim Bob Moffett discovered another Indonesian gold pile in the late 1980s, called Grasberg. Grasberg, if you don’t know, is the world’s single largest deposit of copper and gold.

On February 16, 1997, just over a month before de Guzman’s disappearance, Jim Bob Moffett announced a tentative deal to acquire the massive property from de Guzman’s company. 10 days later, Jim Bob got a phone call from his exploration guy in Jakarta... There was no gold at de Guzman’s.

Jim Bob told Fortune magazine a few months later: “[Their story was] bulls**t. Igneous gold deposits don’t come in nuggets. Nothing we saw ever did. There was no gold at the surface. None. All my deposits have gold at the surface. They said ‘it was because of humic acid destroying the gold.’ And we said, 'That’s bulls**t.’”

Not long after, Michael de Guzman’s body was discovered, badly decomposed in the Indonesian jungle. (Some speculate to this day it wasn’t de Guzman’s body there... For example, last year, Canada’s National Post published a front-page story about how one of his wives claimed to have received a Brazilian money order from him, dated February 2005.)

De Guzman’s company was called Bre-X. It turned out to be the biggest mining scam in history, as $6 billion Canadian dollars in market value vanished. Jim Bob figured it out, and called ‘em on it. In my opinion, the Bre-X scandal is what brought down the entire Vancouver Stock Exchange...

Vancouver was the home of speculation and dreams in mining. But after Bre-X exploded, nobody would touch a Vancouver stock. Today, the Vancouver Stock Exchange no longer exists. It quietly disappeared completely around 2001. It’s also my opinion that the closing of the Vancouver Stock Exchange marked the bottom of the bear market in commodities.

Jim Bob Moffett busted Bre-X. Ironically, if it weren’t for the massive size of his own copper and gold deposit in Indonesia, probably nobody would have believed that a Bre-X deposit would have been possible in the first place.

I’m telling you the Bre-X story today as a warning... If you’re not looking under every stone with your gold investments – be it mining stocks, gold coins, or just gold bullion - you could easily be “Bre-Xed.”

That's why I've brought the world's top gold investors together in one place today for our annual True Wealth Gold & Collectibles Conference... to find the absolute safest and highest returning gold investments possible. Our small group will hear from world-class gold experts like Van Simmons and Frank Holmes.

As you may know, Van was one of the founders of the Professional Coin Grading System (PCGS) that revolutionized the coin market.  Frank is the CEO of U.S. Global Investors... and his company’s track record is ridiculously good (his Global Resource Fund has been named the world’s #1 resource fund two years in a row by mutual fund tracker Lipper).

There’s simply too many great investors here to list in a short email... and I can’t wait to hear what they’re recommending right now.

Look out for my full report... out soon in DailyWealth. Until then...

Good investing,

Steve