Bre-X geologist makes first appearance at trial: Report
Saturday, March 19 2005 - 04:27 AM WIB
"I won't testify," he told reporters Thursday, explaining that he journeyed from his home in the Cayman Islands to Toronto to view the high-profile trial and witness the testimony against him first hand. The court case has proceeded in fits and starts since it was launched in 2000, but this is the first time Felderhof has made an appearance.
"Basically, I'm here to clear my name and that of my family," he said. He declined to comment on the testimony of Graham Farquharson, a mining expert who told the court there were several red flags concerning Bre-X's gold exploration that should have been investigated by the company. "Come to court next week and you'll find out the truth," Felderhof said.
His lawyer, Joseph Groia, insisted no decision has been made on whether or not he will testify.
"That's a decision that won't be made until after the case for the government is in," he told reporters. He added that Felderhof's determination to come to Toronto, even though he was not obligated to attend the trial, "demonstrates to all those people who've said he's gone away and hiding [that] he's not hiding."
Felderhof has pleaded not guilty to four counts of insider trading and four counts of issuing false press releases. The OSC alleges he had confidential information that was not disclosed to investors when he sold shares in 1996, shortly before Bre-X collapsed as one of the most notorious stock market scandals in Canadian history.
Farquharson, president of Strathcona Minerals Ltd., was hired to audit gold exploration results from Bre-X's Busang property in Indonesia in 1997. He told a court yesterday that claims of a significant gold find in Busang could not be reconciled with tests suggesting the opposite.
He cited one case in which an expert tested 103 samples of ore, but found "no unequivocal gold," according to a report entered into evidence.
"This struck us as being a very significant red flag at this time," Farquharson said.
He pointed to other geological oddities -- including claims that the Busang mine contained unusually high levels of "free" gold, along with "extreme" variations in testing results -- as part of a basket of warning signs that required investigation and should have set off alarm bells within Bre-X.
The trial stalled almost four years ago, after the OSC unsuccessfully sought to remove Justice Peter Hryn, the judge presiding over the case. The regulator has replaced its lead lawyer on the case, which resumed late last year. (*)