Novel returns Bre-X scandal to spotlight

The real-life scandal that helped shape modern gold mining and investment regulations for junior exploration companies has surfaced again. But this time, it comes to the fore in a new novel written by one of the peripheral players in the actual saga.

Alfred Lenarciak, chairman of Minorca Resources Inc., recently released "Bre-X: Dead Man's Story," a largely autobiographical tale based on many actual events in the biggest Canadian stock scandal in the country's history.

Lenarciak, a Poland-born emigrant to Montreal in 1975 when he was 25 years old and earned degrees in engineering and finance which enabled him to successfully invest in mining companies all over the world for a span of 30 years.

In an entertaining 248 pages, Lenarciak reveals what went on behind the scenes of the buildup and fall of what was believed to be the biggest gold deposit on Earth, not only from his own perspective but also from that of a stranger that he claims to have met years later. This individual shared an incredible "inside" story of what went on in Indonesia during the years leading up to the Bre-X hoax.

In an unpretentious first-person narrative, Lenarciak brings to life the world of high-risk investing in mineral exploration as it was in the late 1990s, while teasing readers with glimpses of the underlying greed and avarice that drives a significant amount of investment activity today.

As one of the mining executives competing to develop the supposed gold mine discovered by Bre-X Minerals Ltd., Lenarciak is in a remarkable position to share an insider's view of the events of 1996-97. Minorca had several properties in the Busang area with a total of 137,900 hectares (340,751 acres), including a small property adjacent to the much larger Bre-X holding.

Lenarciak also gives readers a peek behind the curtain at the real world of junior mining - the competitive arena not even hinted at in most company press releases. From P.D.A.C. - the fabled global mining convention held every March in downtown Toronto - to the core shacks of a mine site in a remote tropical jungle, the book rings with an authenticity that defies its description as a novel at every turn.

However, the book is devoid of many of the technical details that would give a clearer picture of how the mineral exploration fraud was perpetrated - facts and figures for which many readers might yearn.

In an interview, Lenarciak told Mining News April 23 that he left out such facts intentionally. "All information about Busang are public domain, and I did not want to include too many technical details," he explained.

Instead, Lenarciak shares the color and pageantry in his memories of that time.

On page 58, he writes: "Nothing in 1997 indicated that Bre-X would ever end. At their annual general meeting in Toronto, the huge room was full. I could not even get inside. David Walsh was speaking like a preacher.

"If at that moment, he had dropped his pants down and told his audience to kiss his ass, they wouldn't have any hesitance to do that. The share price was over $200, listed on every index and even CNBC was talking regularly about it. It was a worldwide story."

Though the book is no "Wolf of Wall Street" and offers no alleged master scammer like Bernie Madoff as the definitive culprit, it does without a lot of fanfare give readers an idea of what the world of big stakes investing is like.

Best of all, the novel does a creditable job of explaining how a host of disparate factors came together in a way that allowed Bre-X's management to fool everyone, from financial gurus on Bay Street in Toronto and Wall Street in New York to top Indonesian officials in the government offices of Jakarta.

After reading "Bre-X", John Ing, president and CEO of Maison Placements Canada Inc., said, "I found the book an entertaining page-turner that leaves the reader with one more question, 'Was it fact or fiction?'."

Lenarciak says the book is fiction, though he maintains that the tale is based on an account told to him by a mysterious man he met in Italy.

"The intention of the book was not to make an investigative paper but rather a story which could be very probable and credible, written by an inventive mind with imagination galore," he said.

Why Italy? Lenarciak happens to live there, at least part-time, in a seaside castle that is his wife's ancestral home. And not surprisingly, he uses the European country as a romantic backdrop for much of the story, including numerous travelogue-like passages in the book in which he describes the beauties and joys to found in exploring places like Rome, Naples and Lugano, Switizerland, half a world away from the jungles of Indonesia.

It is in Italy that Lenarciak claims to have met the man who shared the incredible tale of how Michael de Guzman, the Filipino geologist believed to have masterminded the Bre-X hoax, did not jump to his death from a helicopter over the Borneo jungle. Rather, de Guzman managed to escape the promise of certain death in Indonesia and assumed a new persona to enjoy the good life in central Italy, according to this source.

Lenarciak also devotes significant ink to the role that the Catholic Church played in determining de Guzman's fate and cleverly links the church's relationship with Filipinos and another major event of 1997- the out-migration of many Hong Kong residents to other countries before China's takeover of the global city that year.

On page 139, Lenarciak writes: "The next day he took Alitalia from Hong Kong to Rome, so of course he expected to see mostly Italians.

No way! In the economy class, maybe as much as one third of the passengers were Filipinos.

During the 14-hour flight, (de Guzman) received a crash course about almost everything in Rome: how to obtain a "permesso de soggiorno," (residency permit), how to find a job, where to stay, where to eat cheaply, where the Filipino church is, but nobody was talking about Rome's history, museums, the Vatican.

Nothing.

Niente.

Mike got the impression that Rome and the Vatican are run by an underground Filipino organization.

That was a revelation.

Those Filipinos can't be trusted.

In Busang, he was surrounded by them, but even if they are his team, he must be very careful and stay firmly in control."

The story at this point seems to morph into something of an action thriller, with liberal dollops of "Da Vinci Code" and "Bourne Identity-like" intrigue thrown in to spice the tale.

In response to questions about the book, Lenarciak told Mining News that including the Opus Dei organization in the story was pure coincidence.

"My personal involvement in Busang was real and described in the book, but Akiro Guzzo's story can't be verified; that's why it is "fiction," he added.

"Bre-X - Dead Man's Story," by Alfred Lenarciak and published by AuthorHouse LLC, is available at Amazon, Barnes and Noble and Xlibris online bookstores.