THE spectacular collapse of Canadian mining company BreX Minerals, this week, raises the question of how much trust can be placed in the claims of mineral exploration companies in general and the need for some independent verification of such claims.

Bre-X Minerals, for two years the darling of the Toronto Stock Exchange, sucked in more than £2 billion in investors cash, after the company regularly increased extravagant estimates to purport that its gold prospect in Indonesia contained up to 71 million ounces of the precious metal, making it the biggest gold find of the century, a Klondike and California rolled into one.

Market speculators and imprudent ordinary investors scrambled aboard, grasping at the grand fantasy of easy money and pushing the equity to a high of £133 a share. Many paper millionaires were made before a single ounce of gold was dug out of the ground.

Doubts first surfaced in March when panic selling on the Toronto market knocked out the exchange's main computer. This week the pit props were finally kicked away from under the oldest of get rich quick illusions, by an independent consultant's report suggesting that rock samples did not contain bedrock gold but had been doctored with stream worn gold particles. Investors savaged the stock, trading was abruptly suspended.

The consultancy firm which exposed the fraud termed it a hoax "without precedent in the history of mining". But who's to blame? The debacle reads like the script of a Hollywood movie. Bitter investors are preparing lawsuits, powerful interests in Canada and Indonesia are ducking for cover as regulatory authorities, including the Mounties' fraud squad, sift through a mountain of paper for those responsible. The company's chief geologist died two months ago after jumping out of a helicopter. Many fool's gold investors, now nursing crippling losses, must feel like following suit.