Judging by the secrecy and suppressed panic to launch books about the Bre-X gold debacle, one of the greatest frauds this century, publishers can’t have had an easy time being first out of the gate with “quickie” books. The public can’t seem to get enough of past news stories. Hastily written books on major business stories tend to have the casual quality you’d expect and are, for the most part, a rehash of old
accounts with little new information. Unfortunately, this is true of the first books released about Bre-X: The Bre-X Fraud and Bre-X: The Inside Story.

Of the two, The Bre-X Fraud is clearly the superior. Written by The Globe and Mail’s investment editor, Douglas Goold, and columnist Andrew Willis, The Bre-X Fraud is a readable, sharp-focused narrative that recounts the story of Bre-X’s catapult from a penny stock to a fraud that rocked the investment community. Goold and Willis pull few punches, but there are not new conclusions or updates here. The book is a summary of events leading to Bre-X’s collapse in May 1997, when it was discovered that gold samples from the mine were fake.

What happened at the Busang site in Indonesia and who was responsible is still an unsolved mystery, and we may never know the truth. Goold and Willis conclude that Michael de Guzman, the egotistical geologist who allegedly jumped to his death from a helicopter, was responsible for “salting” the mine’s samples with gold, but state that he couldn’t have acted alone.

The other principal characters in this chronicle are classic dissemblers. There’s David Walsh, a volatile stock promoter with a shady past, who ran Bre-X from the basement of his home in Calgary, parlaying it from a penny stock to $286.50 a share. And there’s John Felderhof, a binge drinker and roughhewn maverick prone to exaggeration. Both Walsh and Felderhof made an obscene amount of money and are now tax exiles in the Caribbean.

Goold and Willis write compellingly as they give an in-depth look at Bre-X’s history and rise. There’s de Guzman’s unusual theory of volcanic origins of gold deposits, case studies of investors, the Strathcona Report that exposed the fraud (gold fell out of the samples when shaken), and a corrupt, avaricious family dictatorship in Indonesia. They don’t, however, provide any new interviews or conclusions, making the book a good read for those who didn’t follow the story, but repetitive for those who did. As to the question of how Bre-X was able to continue for so long with no one raising a red flag, the authors lay the blame on the lionization of executives, Canada’s lack of regulations, and the eternal herd mentality.

In contrast, Diane Francis’s Bre-X: The Inside Story reads as if it were cobbled together in no time. Francis, working with a team of researchers, covers the same ground and outline as Goold and Willis, but her book is not as well written and is loaded with clichés. She outlines the basics of mining and securities law, and explains how Bre-X’s innovative marketing on the Internet, using “chat” lines to create gossip and interest, built the company’s momentum. Francis writes in a fast-paced, simplified style and concludes, too, that de Guzman salted the samples. Her book is more for the neophyte than Goold and Willis’s sophisticated analysis, but she does offer a helpful index, which the former do not.

The real Bre-X book remains to be written when players like Felderhof agree to an interview. Meanwhile, investigations by the RCMP and private investigators continue, as the Bre-X story illustrates the power and allure of gold on the popular imagination and its get-rich-quick appeal for ordinary investors.