"Toxic Bob's" Global Search for Gold

Gold speculator extraordinaire Robert Friedland, a dual citizen of Canada and the United States, acquired the nickname "Toxic Bob" in 1969 when he was busted for trying to sell 8,000 "hits" of the hallucinogenic drug LSD to an undercover drug agent in Portland, Maine.

But it remains a fitting moniker.

Early last month, the U.S. Department of Justice lost a bid to seize $152 million in Friedland's assets in order to pay for the clean-up of cyanide and heavy metal contamination at a mine he financed and developed in the San Juan Mountains of southwestern Colorado.

Contamination at the Summitville mine -- stemming from the use of cyanide to extract gold from ore and resulting in the costliest mining disaster ever in this country -- hasn't been Friedland's only encounter with environmental woes.

His first major international venture began in August 1990, when he bought $2 million in debentures from South American Goldfields with the understanding that the company would use half the money to explore for gold on seven different concessions in Guyana.

In January 1993, one month after pulling out of Summitville, his company Golden Star Resources finalized a joint venture with Cambior of Montreal, Canada, to mine for gold near the Omai River, a tributary of the Essequibo River, the main waterway in Guyana.

On August 19, 1995, the dam at the holding pond at the Omai gold mine broke, spilling more than three billion liters of cyanide-laced waste into the Omai River over a period of five days.

Miners reported dead hogs and fish floating down the Essequibo, but by that time Friedland had quietly vanished. Golden Star Resources officials said he had already sold his shares and had nothing to do with the company any more.

Angry local people have joined together to prepare a lawsuit against Cambior in Quebec that is expected to be filed this month.

But Friedland's plans turned sour before the company could begin digging for gold. Venezuelan environmental groups and politicians publicly condemned his operations in Bolivar, while 5,000 indigenous people mobilized to protest invasions of their land.

Friedland wrote off approximately $3 million for his Venezuelan ventures in 1995, saying that there was not enough gold to justify working in the country.

Friedland, who earned over $500 million in the recent sale of his stake in a Canadian nickel mine, has now shifted most of his focus to Asia.

These venture are managed through myriad companies. His major corporate entity is Ivanhoe Capital, a private company based in Vancouver that he controls. His second most important holding is probably First Dynasty, which started life in August 1994 in Calgary, Alberta, as a shell company with a concession to prospect for gold in Dublin Gulch in the Yukon.

First Dynasty moved its offices from Canada to Denver, Colorado, where it still maintains an office before relocating its headquarters in Singapore, shortly after Friedland himself moved to that city.

Although Friedland, who now lives in Sydney, Australia, owns only a minority share in First Dynasty, the firm's North American operations are now managed directly by Ivanhoe.

With the Yukon mine still under development, First Dynasty has acquired a couple of cash cows to keep the money flowing. Most prominent are the Gunung Pongkor gold mine in the western part of the Indonesian island of Java, which produces 66,000 ounces of gold a year, and the Sembakung oil field in the northeastern part of the Indonesian island of Kalimantan, where 17 wells produce 4,500 barrels of oil a day.

First Dynasty also has several other concessions to explore for gold in Java and in Kalimantan, next to the Busang deposit controlled by Bre-X Minerals, the biggest gold find in recent decades.

In addition, First Dynasty developing three other major projects in association with other Friedland companies, including a quarter of the Vasilkovskoye Gold Mine in Kazakhstan. Another quarter of the Kazakh mine is owned by Bakyrchik, a London-based company in which Friedland has a 9-percent stake.

In Burma, First Dynasty plans to develop the Monywa copper mine through Indochina Goldfields, a San Francisco-based company, which Friedland controls through a 38.2 percent share. Indochina also has six concessions to explore for metals in Burma that total 8400 square kilometers.

Finally, First Dynasty has a memorandum of understanding to acquire 90 percent of the Setdco mining company, which has a 500- square-kilometer concession in central New Guinea. The property adjoins the Freeport McMoRan mine, the largest gold mine in the world.

Indochina Goldfields has controlling interests in Fiji's Emperor gold mine and the Bong Mieu gold mine in Vietnam, and it has undertaken several unspecified exploration projects in South Korea.

These, however, aren't the only ventures associated with Friedland.

This year, he has traveled frequently to Siberia, where he is negotiating a deal through yet another company, the Alberta-based Armada, to explore for gold in Chita in the southeastern corner of Siberia.

Armada recently merged with Texas-based Nescor to take control of Erdenet, a huge copper project in northern Mongolia. And in Zambia, another Friedland subsidiary, African Minerals, is preparing to bid on the privatization of the Konkolo copper mine.