(FORTUNE Magazine) – Freeport-McMoran Copper & Gold, the New Orleans-based mining company that became Bre-X's partner, was among the scam's big victims. FORTUNE's Richard Behar caught up with Freeport's outspoken Texas-reared CEO, James R. "Jim Bob" Moffett, and asked him to talk about the scandal. Unvarnished excerpts:

On why he didn't discuss his company's drilling results from Busang sooner:

I've been under unbelievable legal constraints. I didn't talk to anybody, because once we drilled our initial holes, we had information that was dynamite. We had a good idea where this bastard was headed. But we were doin' due diligence, and we had to get the Bre-X people to come and see the data. We couldn't get anybody to show up! They send [geologist Michael] de Guzman back, and the poor sumbitch disappears--whatever happened to him. So we're sittin' here...and we're gettin' no gold opposite their highest-grade holes that we picked out. And we immediately gave this to the SEC.

On Bre-X's reaction to the bad news:

[There were] all these poor people at Bre-X sayin', "How could this happen? How could this happen? There must be some confusion." And I'm sittin' there sayin', "Gentlemen, we're not confused. We drilled thousands of core holes in Irian Jaya. We know a lot about igneous [volcanic] gold. The problem is, there's no igneous gold here, and in the samples that you've given us, the gold is not igneous gold." And there's not a thousand doctors that have seen this cancer cell. The night I made the damn phone call [to Bre-X], all of their senior people were in Toronto, because [John] Felderhof and David Walsh were receiving the Prospector of the Year award. So they left the job site; they left all these young Filipinos out there. We had nobody in charge. And we're out there sittin' on this goddamn powder keg! I said, "David, we've got a problem here." Now I'm talkin' to a guy who starts the conversation by sayin', "Look, I don't know anything about all this technical stuff, I'm just a money raiser." And Felderhof keeps sayin', "You guys must be confused."

On how long it took Felderhof to return to the site after hearing the bad news:

Well, shit, almost ten days! I was so pissed off I could eat dirt. Man, it makes me sick every time I think about it. I'd had it with these guys. The thing that forced this thing out in the open was de Guzman jumpin' out of the goddamn helicopter.

On criticism that he should have told Indonesian President Suharto to test the site:

I'm not even sure the U.S. government has the technical ability. This is a very unique industry. And we've got civil servants over there in that mines department workin' at low salaries. Everybody's been wantin' to shoot me, the messenger, ever since I made my announcement! f--ing Canadian press said I was doin' it to take over Bre-X, and I was tryin' to discredit the Canadian mining industry, and that I had de Guzman killed. People did not want to believe this even when we gave them the information. So you've got to have a lot of credibility, which we do, to be able to stand up and say, "Hey, wait a minute, this $3 billion asset is bullshit."

On companies like Freeport, Barrick, and Placer Dome buying the Bre-X story:

I'm asked to come into this thing [by the Indonesians] in the last hour. I made it clear I would join this thing subject to due diligence, because the research we did showed quickly that nobody had ever done an independent analysis. It is amazing! When I realized that nobody had been on that job site and nobody had done independent analysis, I shut the communications down, and I shut down all the bullshit. I said, "Gentlemen, until we get in and do some independent drilling, I have to assume this deposit does not exist." That's how you do due diligence.

On potential yellow flags:

Crushing all the samples as opposed to saving a slab--that's never done. Generally, you save half the core so that when you're gettin' ready to build a mill, you can do a survey and find out how you're gonna have to build the mill to be able to crush the sample and chemically get the gold out. And not to save any of that sample--we'd never seen that before. They said they thought this gold was in nuggets and if you didn't take the whole core, you might miss one big nugget in the half that you cut off. That's bullshit. Igneous gold deposits don't come in nuggets. Nothing we ever saw did. [Also,] there was no gold at the surface. None. All of my deposits have gold at the surface. They said it was because of humic acid destroying the gold. And we said, "That's bullshit."