Friday, March 6th4.1°C
25326
25147

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




Recent Trending




Today's Market
S&P TSX15103.11+20.271
S&P CDNX696.92-1.17
DJIA18135.72+38.82
Nasdaq4982.81+15.668
S&P 5002101.04+2.51
CDN Dollar0.8016+0.0005
Gold1196.30-4.2999
Oil52.83+0.28
Lumber287.00-3.70
Natural Gas2.852+0.011

 
Okanagan Companies
Pacific Safety0.13-0.005
Knighthawk0.010.00
QHR Technologies Inc1.65+0.10
Cantex0.035-0.005
Anavex Life Sciences0.184+0.004
Metalex Ventures0.045+0.005
Russel Metals24.27-0.68
Copper Mountain Mining1.240.00
Colorado Resources0.130.00
ReliaBrand Inc0.0065-0.0015
Sunrise Resources Ltd0.045-0.005
Mission Ready Services0.22-0.005

 



24696

FEATURED Property
22164682352 Selkirk Drive
4 bedrooms 3 baths
$539,500
more details
image2image2image2
Click here to feature your property
Please wait... loading


Refinance your mortgage?

Canadian Mortgage rates are low and could be dropping down in time for the spring market following a drop in the Bank of Canada Rate on January 21 by 1/4% which will save new buyers and those with mo...


Creating your retirement vision

A vision means different things to different people. To the head of a large corporation, it’s the ability to chart a course that will deliver success (think Steve Jobs and Apple), to a shaman, i...


It's OK to say 'I'm sorry'

Photo: ContributedStand-up comedians and sitcoms have been making fun of Canadians for being polite as long as I can remember. Being known for our niceness is certainly not a bad thing and I wish more...

_








Member of BC Press Council


24681