GOLD: Movie Analysis

Synopsis:
The movie is based on a true magazine story about Kenny Wells, a down-on-his-luck
hustler who practically begging for the money he needs to get back into the precious metals
game. He is addicted to the hunt for gold and driven as a hungry young salesman. He is toiling for
his dad’s respectable mining company in Reno. He envisions the “ring of fire”, a huge buried gold
mine in Indonesia.
At the father’s death and with entrepreneurial blood flowing in Wells’ veins and a hunch
roiling in his head, he goes to Jakarta to find the legendary “river walker” Mike Acosta, a hands-
on geologist who actually finds the ore that guys like Kenny profit from, and fast-talks his way to
bringing Acosta onboard for the hunt, dangling many hundreds of thousands of dollars he doesn’t
have yet.
Back in Reno, Wells with support from devoted girlfriend Kaylene and company
colleagues cobbles together just enough money to return to Acosta and Indonesia and begin the
search.
In the jungles together with their native work team, there follow all kinds of ups and
downs that bad luck and harsh nature deliver. Wells persuades Mike to stay with it and they seal
their 50/50 deal in a few words scribbled on a dirty paper napkin.
Wells return to Reno to seek more backing and eventually learns Mike has found gold.
The geological team is said to potentially yield over 10 million ounces of gold. Much follows,
including:
a. Gold Fever. Wells’ company becomes a huge stock. The stock of Wells’ company
Washoe Mining Corporation has gone up from 4 to 6 dollars a share, eventually 23
dollars to 110 in one day.
b. Political Greed. Big upheavals in Indonesia and Wells and Mike courting Suharto’s bad-
boy billionaire son to invest. Suharto, president of Indonesia, has revoked the
exploration rights. It is also announced that Barrick Gold is planning to take over the
stock. Wells and Acosta courted Suharto’s son and agreed to invest.
c. Market Manipulation. JP Morgan offers a public officering of Wells’ stock on the New
York Stock Exchange. It takes few years but Wells lands on Wall Street as major New
York investors like Bryan Woolf and Hollis Dresher get behind him. A stock market
 listing materializes, as does the courtship of South African mining titan Mark
Handcock.
d. Personal Hunger. Wells received the Golden Pick Axe award for the Prospector of the
Year ceremony.
When Acosta gets to Jakarta, he is arrested by armed Indonesian soldiers. Wells learns
that there actually is no gold at the site. It is revealed that gold dust was sprinkled onto rocks to
make it look like it was precious metal. They had found river gold – which is rounded and worn
smooth – but should have found flake gold – rough edged and angular. Investors lose billions of
dollars and Acosta jumps from a helicopter when being transported by Indonesian soldiers.
FBI investigation took place on Wells, Washoe Mining Corporation and Mike Acosta’s
character and death. At the end Wells received a letter in the mail with no return address – and
inside is the napkin he signed which offers him 50/50 of the profits from their company, along
with a check for 88 million dollars.

Mining Analysis:
1. Volcanic Pool Theory = Wells developed the theory. He believes that when a volcano
collapse back onto itself” gold is created from the “massive buildup of heat and pressure”.
This motivates Wells to select Indonesia and justified the mining practices. The location
of Indonesia in the Pacific Ring of Fire made it the ideal location to test and prove his
theory.
2. Gold Recipes = The process of extracting invisible bits of fold is back-breaking. The soil is
placed in six drums connected by large rubber belts to a wobbly wheel. A gas-powered
generator rotates the barrels. A steel pipe inside each drum crushed the material,
separating dirt from rock. Then the recipe to make gold takes over. Liquid mercury is
added to bind the gold. Water washes the mixture, leaving a small amount of sediment
which is then filtered through a handkerchief. The tiny nugget that remains is placed
under a blowtorch to burn off impurities.
3. River Gold (Salted Samples) = In the aftermath of the scandal, Mineral Services conducted
an independent audit of Washoe Mining Company. They discovered that it had tampered
with the core samples, adding gold from an external source. In their report, they
commented on the historical significance of the tampering operations. The report
concluded that a member of the company most likely engaged in “salting”, sprinkling gold
onto samples before shipping them to the laboratory for testing. The testing labs were
“very downstream” from the mining facility. Some journalists speculate that initial salting
was simply to extend the project, but the salting continued after the enormous estimates
returned from the lab.
4. Traps in Decision Making = Acosta hires local villagers (Indonesian natives) who are
inexperience resulted in minimal questioning of management. Much like the gold rush of
California, most of these villagers left everything in hope of finding gold. Local villagers
have remained in the area in hopes of striking gold. This limitation allowed Acosta’s tactics
to go unchecked. Moreover, most investors lacked experience in the mining industry,
many blindly trusted Wells, Acosta and Washoe Mining Company leading to high
valuations and minimal further questioning.
5. No Criminal Charges = many investors accused Washoe Mining Company of colluding
with Acosta, citing instances of suspicious behavior. When the company filed for the US
Securities and Exchange Commission, they announced they “prepared, reviewed or
verified with independent mining experts, but failed to disclose that the samples were
always drawn and controlled by Acosta. The courts ruled in favor of Wells claiming they
acted with their normal professionalism, which by its very nature bestows credibility.
They believe it is Acosta’s plan.
6. Conspiracy Theories = several conspiracy theories have surfaced around the Washoe
scandal. Many people including the doctor who performed Acosta’s autopsy, believed
Acosta faked his suicide and is still alive today. Workers on site the day Acosta
disappeared claimed he was carrying large duffel bags of cash. Some say he ran to South
 America with a few hundred thousand dollars, while others say it was upwards of
hundreds of millions. With this amount of money he could have bribed his way to
freedom. Another independent investigations found that Acosta was pushed from the
helicopter and served as the “fall guy” for the entire company. It is also possible that
Acosta orchestrated the entire scandal, and then using it to convince successful
prospectors who had failed on rough times to invest without questioning.
7. Indonesian Government Intervention = The Indonesian government under President
Suharto noticed the escalating worth of the site. The government stated that a small outfit
like Washoe Mining Company would have to share the site with a larger company and the
government chose one with ties with a larger company, and the government chose one
with ties to the President Suharto’s family, a Canadian company called Barrick.