Wednesday, May 27th23.3°C
26427
25998

Barrick named in Canadian class action suit over troubled Pascua-Lama project

TORONTO - Several Canadian law firms are pursuing a class action against Barrick Gold Corp. (TSX:ABX) and some of its current and former senior officers, alleging they misrepresented how much risk the company faced when it undertook construction of the multibillion-dollar Pascua-Lama mine project in South America.

The project involves one of world's largest deposits of gold, estimated at nearly 18 million ounces, but the company missed its original target of starting production in early 2013 due to opposition from local groups and Chilean authorities.

The suit, filed Wednesday with the Ontario Superior Court of Justice, alleges Barrick described Pascua-Lama as a feasible and highly economic project due to the low cost to construct the mine and to produce gold and silver from it, adding that the company knew or should have known that it would have to overcome significant obstacles.

"The mine is located underneath glaciers in the Andes mountains and the environment is subject to extreme temperature and weather changes. Barrick is a sophisticated mining company that has constructed and operated mines all over the world. The challenges in developing Pascua-Lama were or should have been readily apparent to Barrick," the claim alleges.

"There was also considerable opposition to the Pascua-Lama project from local communities that depended on the water supply the glaciers provided. These communities, along with various environmental groups, were concerned about adverse impacts of mining on the glaciers and contamination of the water supply."

Barrick announced on Oct. 31, following several court and regulatory setbacks in Chile, that it was suspending construction at the project and was uncertain when it would resume. The project was originally estimated to cost between US$2.8 billion and US$3 billion but the estimate had risen to US$8.5 billion by the time construction was halted.

The suit is looking to be recognized as a class action seeking compensation on behalf of investors who acquired Barrick shares between May 7, 2009, — when Barrick announced it would go ahead with construction of Pascua-Lama — and Nov. 1, 2013, a day after it announced the project suspension.

According to public stock records, Barrick shares were worth $38.55 on May 7, 2009, and worth only $18.77 on Nov. 1, 2013. They closed Wednesday at $18.32.

Among other things, the suit is asking for financial compensation totalling about $6 billion and a declaration that Barrick is liable for the acts and omissions of the individual defendants, who include former chief executive Aaron Regent and his successor, Jamie Sokalsky, who is Barrick's current CEO.

None of the allegations has been tested in court and the litigation hasn't been registered as a class action.

"Barrick disputes the allegations, and will defend itself against any lawsuit vigorously," company spokesman Andy Lloyd said in an email responding to a request for comment.

The latest suit is being handled by three law firms: Koskie Minskie; Sutts, Strossberg, and Groia & Company. Another firm, The Merchant Law Group, previously filed suits in Ontario and Alberta on behalf of those who bought shares between May 7, 2009, when construction was announced, and May 23, 2013, when Chile's environment regulator stopped construction and issued a fine against Barrick, citing "serious violations" of its environmental permit.

The lead plaintiff named in the latest suit is Michael Weiner, who purchased Barrick shares between July 29, 2009, and July 4, 2013, on various exchanges, including the Toronto Stock Exchange.

The Canadian Press


Read more Business News

26416


Recent Trending




Today's Market
S&P TSX15110.47+59.66
S&P CDNX690.62-1.34
DJIA18162.99+121.45
Nasdaq5106.59+73.84
S&P 5002123.48+19.28
CDN Dollar0.8033+0.0004
Gold1187.40-16.90
Oil58.58+0.35
Lumber274.00-0.40
Natural Gas2.81-0.01

 
Okanagan Companies
Pacific Safety0.13-0.01
Knighthawk0.010.00
QHR Technologies Inc1.50-0.01
Cantex0.03-0.01
Anavex Life Sciences0.42-0.01
Metalex Ventures0.08-0.01
Russel Metals25.51+0.30
Copper Mountain Mining1.28+0.00
Colorado Resources0.11+0.01
ReliaBrand Inc0.0139+0.0059
Sunrise Resources Ltd0.04+0.01
Mission Ready Services0.155+0.005
Decisive Dividend Corporation2.10+0.16

 



26416

FEATURED Property
2284425414 Okaview Road
5 bedrooms 6 baths
$1,725,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Cash stressed seniors

Photo: Thinkstock.comFor many Canadian homeowners, their house represents the biggest portion of their net worth. Now, increasing numbers of seniors are starting to recognize the hidden value of their...


Do or do not

Photo: Thinkstock.com“The optimist sees the rose and not its thorns; the pessimist stares at the thorns, oblivious of the rose.” - Kahlil Gibran Good planning is all about managing chan...


Penetrate the smokescreen

Photo: ContributedHas this ever happened to you? You’re in the middle of your second or third “good discussion” with a prospect. Everything’s going great. The prospect seems en...

_



25991




Member of BC Press Council


26106