A group of Canadian law firms are seeking to file $6 billion in class-action suits on behalf of shareholders against Barrick Gold Corp., claiming it misrepresented risks amid construction at its multibillion-dollar Pascua-Lama project. Toronto-based Barrick, the largest gold miner, suspended construction at the Pascua-Lama development project before it was able to bring the operation into production.
High in the Andes mountains straddling Chile and Argentina, Pascua-Lama has an estimated 18 million oz in reserves, according to Barrick. Company officials, however, missed original guidance ending Q2 2013 after opposition from local communities and Chilean regulators. Defendants in the filing, which seeks class-action status in Ontario Superior Court, include ex-chief executive Aaron Regent and current CEO Jamie Sokalsky.
The action claims Barrick described the project, which also contains silver, as highly economic because of low construction and production costs — but that it knew, or should have known, of serious obstacles. The action represents investors who acquired Barrick stock between Q2 2009 — when construction was announced — and after Q4 2013, when the suspension began.
Beneath mountain glaciers and given to extreme weather changes; moreover, “challenges should have been apparent to Barrick,” the claim alleges, including local communities dependent on water the glaciers provided,” and environmental concerns about pollution. “Barrick,” it added, “is a sophisticated company that has constructed and operated mines all over the world.”
A Barrick spokesman could not be reached for comment Wednesday, althought the company has announced it would challenge the charges in court, according to The Canadian Press news agency. Koskie Minskie; Sutts, Strossberg, and Groia and Co. and the Merchant Law Group are among the plaintiffs.