Bre-X’s John Felderhof facing decision day in July

Vancouver – Former Bre-X Minerals chief geologist John Felderhof is set to learn his fate when a decision in the long-running case is handed down on July 31.

The date for the decision was released Friday in Ontario Superior Court.

Felderhof is accused of illegal insider trading and of putting his name to news releases the Ontario Securities Commission says he should have known were misleading. He has pleaded not guilty to all charges.

The Bre-X Minerals saga is the most notorious in Canadian mining history. The Calgary-based company was a stock market star from 1995 to 1997.

It claimed it had discovered the world’s largest gold deposit in Busang, Indonesia. Bre-X shares soared to more than $200.

But by the spring of 1997, everything began to unravel. New tests carried out by another company showed there was virtually no gold in the Bre-X deposit. The original positive assay results had been “salted” the samples had been sprinkled with gold from other sources.

Bre-X stock became worthless. Investors lost an estimated $6 billion. And the worldwide reputation of Canada’s mining industry suffered a huge black eye.

Despite demands for someone to be brought to justice, no one was ever charged criminally with the actual fraud.

One day after the OSC brought its Securities Act charges against Felderhof, the RCMP said it would be impossible to gather enough evidence to lay criminal charges against anyone.

Bre-X geologist Michael de Guzman died mysteriously in March 1997, after apparently falling from a helicopter into the Indonesian jungle.

Bre-X president David Walsh died in 1998 after suffering a brain aneurysm at his home in the Bahamas.

That left Felderhof. The OSC says he sold $84 million of Bre-X stock in 1996 while he allegedly knew of information not disclosed to investors about the state of Bre-X’s gold deposit in Indonesia.

His lawyer says Felderhof must be acquitted unless it can be proved that he knew that Bre-X’s claims of big gold finds “were false or misleading at the time Bre-X issued them.”

Felderhof has not made an appearance at the closing arguments, but did drop in earlier to listen but not to testify as the six-year case made its way through the system.

Why six years? The trial got bogged down by delays and major procedural wrangling. At one point, the OSC tried to have the judge replaced, alleging he was biased. The OSC lost the argument, but it took 3 years to get that resolved.