A little history
Few people know that gold is the first metal that was discovered by mankind. The history of the discovery of a chemical element begins in the Neolithic era. Gold was widely used several thousand years BC in Ancient Egypt, China, Rome, and India. Mention of the precious metal can be found in the Odyssey, the Bible and other monuments of ancient literature. Ancient alchemists called gold the “king of metals.” And it was designated by the symbol of the sun.
In those places where the first civilizations arose, gold mining began on a large scale. This is the eastern Mediterranean, the Indus Valley, North Africa. Gold prefers solitude. Most often it is found in its native form. In ancient times, metal was collected by hand. To collect one gram of gold, one had to work for days.
The history of the chemical element is closely connected with various geographical discoveries. Gold was discovered almost immediately on the new land.
Secret
At that time, no one knew that the project leader, Philippine geologist Michael de Guzman, was “salting” the rock samples by mixing gold into them, literally scraping it off his own wedding ring.
In his reporting to Bre-X, de Guzman kept things within reason. He tried to ensure that the gold availability indicators did not look too fantastic, but were sufficient to fuel interest in Busang. Later, the investigation proved that during the two and a half years that this fraud continued, de Guzman bought more than 60 thousand dollars worth of alluvial gold, washed up in local rivers, from the aborigines. All of it was carefully crushed and added to rock cores, which were sent to the laboratory for analysis.
In 1995, the scheme almost came to an end when large investors, who had already invested a lot of money in Bre-X, hired independent auditors to check ore samples obtained during geological exploration at Busanga. The experts became concerned about the too smooth edges of the gold grains found and began asking de Guzman various awkward questions. A talented geologist responded to this by coming up with a kind of “volcanic basin” theory that explained the unusual characteristics of the gold in the deposit. While the company's shares were moving up vigorously, this explanation suited everyone.
In December 1996, Lehman Brothers strongly recommended Bre-X, which made the “golden discovery of the century,” to buy. JP Morgan was optimistic about the young company's prospects. The Wall Street Journal and other business publications never tired of sharing the latest news from Indonesia.
The first estimate of the deposit promised about 2 million troy ounces of confirmed reserves of gold, which made it quite large, especially in Southeast Asia. Over time, the mine's gold estimate has steadily increased - in 1995 it was 30 million ounces (850 tons), in 1996 - 60 million (1,700 tons) and by 1997 it finally reached 70 million ounces.
Gold in nature
The chemical element Gold is quite widespread in nature. On average, the lithosphere contains about 4.3·10-7%, based on mass. The cost of the metal is high due to the difficulty of its extraction. Gold is also found in igneous rocks. Here it is scattered. Hydrothermal gold deposits form in the earth's crust, which plays a huge role in industry. In its native state, this metal is most often mined in ores. Only in rare cases are minerals formed with bismuth, antimony, selenium, etc.
The chemical element Gold is also found in the biosphere. Here it migrates in combination with various organic compounds. Metal can often be found in river suspensions. One liter of natural water can contain about 4·10-9% precious metal. In areas of gold deposits in groundwater, gold can be contained in much larger quantities. As the history of the chemical element testifies, gold could even be found in the form of entire deposits of the precious metal underground.
Today gold is mined in 40 countries around the world. The main reserves of the precious metal are concentrated in the CIS countries, Canada, and South Africa.
Middle Ages and modern times
After the collapse of Rome, all gold reserves were scattered throughout the world, which began to live on these jewels. For about 10 centuries, metal mining was practically not carried out and amounted to only about 3,000 kilograms per year.
By the end of the 15th century, people again began to look for gold deposits, as reserves were no longer sufficient. After the discovery of America, several thousand kilograms of solar metal were exported to European countries over the course of a quarter of a century, and over 200 years the weight of the transported precious metal amounted to more than 2,500,000 kilograms.
, many countries, including Russia, began to actively explore the discovery of gold In most cases, the discovery of new continents occurred thanks to this precious metal. Gold served as the beginning of the discovery and development of new lands and continents.
The most precious gift to humanity was kept in the South American Republic, where gold accumulations weighing more than 65,000 tons were found more than 100 years ago. Most of the solar metal has already been mined in South Africa, but still an average of about 500,000 kilograms of gold per year is still mined from this deposit.
Physical properties of precious metal
Gold is a fairly ductile metal. It is easily amenable to mechanical action. Good quality gold can be drawn into wire or beaten into flat sheets. The metal is resistant to various chemical influences and easily conducts electricity and heat. The density of gold at room temperature is about 19.32 g/cm3.
The chemical element Gold is characterized by a bright yellow color in the absence of impurities. But pure gold is practically never found in nature. Even in bank bullion, the metal is not presented in perfectly pure form. In nature, it is found with the addition of silver, copper, etc.
Gold is fairly easy to polish. Due to its good reflective ability, the metal is highly valued in jewelry. It's amazing that even the sun's rays can pass through thin sheets of precious metal. At the same time, their temperature will decrease. It is no coincidence that in modern construction the chemical element Gold is used to tint windows.
Chemical properties of gold
As evidenced by the history of the discovery of the chemical element, Gold was known long before the appearance of the periodic table. But metal also takes pride of place in it. In the table, Gold is listed under atomic number 79 and is denoted by the Latin letters Au. The valency of the precious metal in chemical compounds is most often +1 or +3.
For many centuries, chemists have conducted a huge number of experiments on gold. It was found that oxygen and sulfur, which have an aggressive effect on most metals, have absolutely no effect on gold. The only exception can be its atoms on the surface.
The composition of gold determines its chemical properties. The metal does not react with phosphorus, hydrogen, or nitrogen. But gold forms compounds with halogens when heated. A reaction occurs with chlorine and bromine water even at room temperature. These reagents are only available in laboratories. But in everyday life, a solution of potassium iodide and iodine can pose a danger to metal.
Mineral acids and alkalis in most cases have no effect on gold. It is on this property that the method of determining the authenticity of a precious metal is based. Few people know how gold is found among a variety of jewelry. The decoration is filled with nitric acid. Gold under the influence of a chemical substance will not change its appearance. But another metal can react.
Theories of the origin of gold
No scientist can say exactly where gold came from on Earth. While the strong minds of this world build hypotheses and are at a loss, people create legends in which they extol the yellow metal, its beauty and characteristics to the skies.
There are many beliefs that tell about when and how Au appeared on Earth. This element is found almost everywhere. It’s hard for an ordinary person to imagine, but his body contains about 10 mg of the noble metal. Gold is found in the water of rivers and oceans, it is found in soil and plants.
So where did the gold come from? There are two main theories that consider how the element appeared on our planet.
- One theory suggests that the metal arose here after the formation of the planet. Au became part of it when volcanoes raged on Earth and the atmosphere was unfavorable for the creation of life. The Earth's core was so hot that it attracted iron and other metals, cooling due to them. In the process of such volcanic activity, gold appeared. It was formed over several centuries and gradually came to the surface due to volcanic eruptions, earthquakes and floods.
- The second theory says that Au as an element appeared on our planet at the time of its formation. Gold came to us from space. Meteorites, falling to the ground, “made” reserves of Au. Gradually, meteorite particles became part of the rock and turned into large and not so large deposits of gold.
It is known that the amount of all gold mined during its existence is so insignificant that it can be compared with the amount of iron that humanity mines in one day. The extraction of Au is associated with certain difficulties, and often deposits of the metal are located so deep in the bowels of the earth that it is simply impossible to extract it from the rock.
Yes, indeed no one disputes that volcanic processes in the bowels of the earth contributed to the formation of the noble metal. But this does not at all mean that volcanoes were the primary cause of the transformation of iron or other metal into Au.
Moreover, the conditions that prevailed on the planet can hardly be called favorable for the formation of gold deposits. Even the highest temperatures cannot transform aluminum or nickel into a noble metal.
If we talk about the second theory, then it is considered the closest to the truth. The fact is that scientists have been discussing the cosmic origin of metals for quite some time. They compare the number of meteor showers and gamma-ray explosions with the amount of Au mined.
Cosmic version of the origin of gold
It is likely that gold already existed at the time of the formation of our planet, for this reason it is located quite close to the Earth's core. Meteor showers, asteroid impacts and other disasters have led to the fact that the amount of this metal on our planet has increased significantly.
Studies of particles of meteorites and other celestial bodies have shown that noble metals are invariably present in their composition. By the way, if you melt down all the gold in the world that has been mined by mankind and that which is in the bowels of the earth, it will be enough to cover the entire surface of our planet with a four-meter layer.
The metal could have appeared on the planet after a gamma explosion, which gave a powerful wave of energy and helped replenish gold reserves. However, this is also only a theory that does not answer the question.
Previously, it was believed that the metal is formed in the depths of the earth in the strata of igneous rocks. During volcanic eruptions, under the influence of temperatures, the elements were somehow transformed into noble metals. Afterwards, under the influence of the same eruptions, Au and other elements came to the surface. And part of the gold remained in the core. However, this theory was later subjected to severe criticism and found to be unlikely.
Naturally, these are not all the theories that have been put forward by scientists. Some hypotheses had to be abandoned because they were refuted. Others turned into fantastic stories and were also not confirmed. But science does not stand still and today there is one theory that is recognized by the world community as the most realistic.
How is gold found?
Gold is most often mined from placer deposits. In this case, the elutriation method is used. It is based on the difference in density between gangue and gold. Only true professionals in their field can know how to obtain high-quality gold.
Popular methods include amalgamation and cyanidation. This is how gold began to be mined in America and Africa at the end of the nineteenth century. Today, primary deposits are the main sources of precious metal. The composition of gold can depend on the rocks that are nearby. And also from the climatic environment.
Initially, the gold rock is crushed and treated with a solution of sodium or potassium cyanide. Next, the material is purified by electrolysis. Prepare a bath with hydrochloric acid solution in advance. When current passes through the rock, impurities fall out as sediment. The result is a purified precious metal.
Lessons
The “golden scam of the century” had an extremely negative impact on the entire mining industry market. After the Busang scandal, investors were in no hurry to invest in new projects, a large number of gold mining companies stopped issuing new shares, since no one wanted to buy them - it was now not so easy to convince the market of their honesty. The Toronto Stock Exchange fell into a heavy hangover sleep. After the deafening growth of Bre-X, there was an equally deafening collapse of all securities - all operations had to be frozen for some time. Most investors after this scandal turned their backs on resource companies and looked for more conservative ways to invest their money - the North American mining industry was deprived of an abundant influx of investment for several years.
The Walsh fraud scandal forced Canadian legislators to reconsider their attitude to free markets: they issued a new law, National Instrument 43-101, regulating the sale of shares in mining companies. It was intended to protect investors from false information about mining projects. New rules and reporting standards for exploration have been introduced, requiring Canadian-listed mining companies to submit ore samples in sealed containers to laboratories accredited by the American Geological Institute. As a result of the Bre-X story and the right conclusions, the Toronto Stock Exchange is one of the safest places to invest in junior mineral exploration and development companies today.
Where is gold used?
Many people are familiar with gold in the form of jewelry. Meanwhile, the metal is widely used in various industries. However, the composition of gold may be slightly different. Alloys with other metals are often used. This not only saves expensive material, but also increases its strength. The precious metal becomes more resistant to various mechanical damage.
The quality of gold used in industry is indicated by its fineness. This way you can find out how “pure” the material is. The most common precious metal is diluted with copper. Alloys with silver can be used in electrical engineering. The most expensive are alloys of gold and platinum. This material is used in the jewelry industry, as well as in the production of chemically resistant equipment. Gold compounds have also been used in photography since the beginning of the 20th century. Toning was performed using a chemical element.
The mysterious death of de Guzman
They had to confirm the assessment of the gold content of the deposit and check the reliability of the previously obtained results. The first Freeport-McMoRan specialists reached Busang and began work in early March 1997.
From that moment on, events began to develop very rapidly. On March 19, Guzman flew from Balikpapan to Busang for a field meeting with Freeport geologists, but on the way he jumped out of the helicopter and fell to the ground from a height of 300 meters. They searched for his body for four days, and it was eventually found in a swamp not far from the road to the deposit. De Guzman's hands and feet were missing, and his penis was "surgically removed," according to the Indonesian authorities' report. A suicide note was found in de Guzman's pocket, in which he vaguely referred to some fatal disease, because of which he saw no point in living any longer.
Who removed his penis “surgically” and how he lost his arms and legs remains unknown – whether it was wild animals who feasted for themselves for four days in the depths of the Indonesian jungle, or whether unknown ill-wishers were at work here remains unclear. However, despite all the difficulties, the body was identified - de Guzman’s colleague and fellow countryman, another Filipino geologist who worked for Bre-X, recognized the deceased as Michael de Guzman, and the same was confirmed by one of his mistresses.
Michael de Guzman at his helicopter in 1997
According to local journalists, the story of de Guzman's death is replete with inconsistencies and obvious contradictions - the government did not agree for a long time to conduct an autopsy; the medical record showed that de Guzman only had hepatitis B, which is not a fatal disease; the deceased's teeth did not match the X-ray taken by dentist de Guzman; his family never saw the suicide note, and his wife claimed that the “late” husband was in excellent spirits before his death, and there could be no talk of suicide. The logbook of the helicopter on which de Guzman was flying was lost, and the pilot's seat that day was not a civilian pilot, but a certain lieutenant colonel of the Indonesian Air Force, who gave very inconsistent testimony regarding the circumstances of the geologist's death.
Whether de Guzman really committed suicide, suffering from illness or fearing the inevitable discovery of his scam, whether he was killed by his “colleagues” or the Indonesian authorities who valued the project, or whether he simply faked his death and disappeared - we will never know. But the fact remains that de Guzman's death on March 19, 1997 was the beginning of the end for Bre-X.
The news about the death of the chief geologist of the Busanga field did not immediately become known in the “big world”, but rumors about some problems with Bre-X have already begun to circulate in investor circles.
Gold as an element of art
Gold has been used in jewelry since ancient times. Today this type of industry is one of the most profitable. Many products developed by designers were put into production. But handmade jewelry remains relevant today. Making such products is a real art that deserves close attention.
Since the discovery of the chemical element, people began to use gold to make jewelry and various decor. Today, designers who not only develop products, but also make them themselves, have good earnings. Handwork combined with expensive materials gives an excellent result. All jewelry turns out beautiful and original.
Ambitious geologist
David Walsh (left) and John Felderhof
At the root of the entire Bre-X story is Filipino geologist Michael de Guzman, who became the inspiration for Mike Acosta (Edgar Ramirez) in the movie Gold.
De Guzman was a good geologist - with a scientific degree, extensive experience and considerable ambition. But in the world of geological exploration, where giant American companies were in charge, there was no place for him. He couldn’t count on a well-paid job in a large geological exploration company, and then he decided to take matters into his own hands. He needed a sensation, a discovery. And sooner or later he had to find a suitable option.
The small river Busang in the center of Indonesian Kalimantan (also the island of Borneo) was known long before the events described. Back in the 16th century, Dutch missionaries reported on a local gold deposit, bringing the light of the Christian faith to the aborigines, but for five hundred years no one dared to climb deep into the territory of inhospitable tribes to check this data. De Guzman believed this information and went to Indonesia in 1992.
Gold in economics
In conditions of commodity production, it is gold that performs the function of universal equivalent. The importance of this metal is difficult to overestimate. The material has its own consumer value. In many cases, the precious metal can even replace money. And gold is valued due to its properties. It can act as the best monetary commodity. Gold is stored for a long time, is not susceptible to chemical attack, and is easily divided and processed.
The same ingot can be used in industry, and then, with a little processing, become a material for making jewelry. We can say that this precious metal is immortal.
Banking sector
In ancient times, gold was used only for making jewelry. Further, it became an excellent means of saving and accumulating wealth. Those who knew how to get gold did not need to think about tomorrow. After all, the precious metal was quite expensive at all times.
Today, gold is widely used to make coins. But the precious metal does not enter monetary circulation. Coins or bullion are held in financial institutions as savings. Investing in precious metals is at the peak of popularity today. In this way, you can not only save money, but also increase it.
What does sample mean?
With the development of industry, many companies have learned to produce high-quality jewelry, which in appearance is practically no different from real gold. An unscrupulous seller will easily sell a “dummy” to a gullible buyer. Therefore, everyone should know how to choose a gold product correctly.
First of all, the quality of this precious metal is determined by its breakdown. Even if the jewelry goes on sale from abroad, a state stamp is placed on it. The most common are products of 585 standard. They contain 58.5% pure gold. 999 fine products are not widely available. But the bars that fill the state gold fund cost 990 fine.
Pay
On November 5, 1997, Bre-X declared bankruptcy and immediately faced a number of lawsuits from angry investors, the largest of which were three Canadian public pension funds - the Ontario Municipal Employees' Pension Fund and the Quebec Public Sector Pension Fund. and the Ontario Teachers' Pension Fund. According to the most conservative estimates, Bre-X investors large and small lost about $4 billion (more than $6 billion in 2017 prices).
The Prime Minister of the Canadian province of Alberta, where Bre-X was registered, assigned a special prosecutor to investigate the fraud. A criminal case was opened and interrogations of the accused began.
Michael de Guzman
The first and at that time the only candidate for “exemplary flogging” was, of course, Michael de Guzman, who “salted” geological samples, but, as we know, he died tragically or mysteriously disappeared, so there was no one to judge.
John Felderhof
Geologist and at that time already vice president of Bre-X for geological exploration John Felderhof denied any involvement in the fraud, and the police believed him. The Ontario Securities Commission charged him with “insider” stock trading, but it could not be proven that Felderhof was aware of the impending failure of the project. The trial dragged on for 6 years and was marked by a resounding victory for the accused and his lawyer. The civil claims of the investors were also not satisfied and they were unable to return a penny of their money.
David Walsh
The threat also loomed over Bre-X founder David Walsh, who was responsible for everything that happened in the company. But after the bankruptcy, he never tired of making innocent eyes and claiming that de Guzman had simply fooled him. While the investigation was ongoing, Walsh remained at large and in 1998 decided to move from cold Calgary to the Bahamas - closer to the sun, beaches and warm ocean, in order to try to forget about this ugly story at least for a while. But investors remembered it. Just a month after his escape, two masked men burst into Walsh's Nassau home and demanded the stolen money back at gunpoint. Walsh promised them something, and they left in peace, and the police were never able to find the criminals. But either he could not fulfill his promise, or the climate change turned out to be harmful to the Canadian’s body - two weeks after this incident he set off after de Guzman. Walsh was found dead in his home and the cause of death was diagnosed as a brain aneurysm.
What does the color tell you?
Gold items of the same standard may differ in color. The appearance of the finished item depends on the impurities. Platinum and nickel give the alloy a light tint. Copper and cobalt produce dark-colored jewelry.
Rose gold is extremely popular today. This alloy is obtained by adding silver and copper. But exclusive black gold is created using cobalt and chromium. In many cases, consumers overpay for fashion trends. In this case, the gold content in the product may be minimal. In just a few years, the jewelry may lose value. Therefore, preference should still be given to the classic yellow metal.
Where to buy gold?
It all depends on the final goals. If you need to buy jewelry as a gift, you can contact any specialized store. Much cheaper, high-quality gold jewelry can be purchased online. Preference should be given to traditional yellow gold. It contains the precious metal in its pure form in the greatest quantity. Such a product can last a long time and will even be inherited.
Bank gold bars are suitable for investment. Each financial institution offers its own conditions for purchasing gold. But the best investments don't necessarily guarantee security. Preference should be given to banks that have been operating for more than 10 years and receive positive feedback from existing clients.
