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Monday, October 14, 2019 - 11:19:37 AM
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Mining News Pro - A Canadian court has given the go-ahead for a pension fund’s proposed $3 billion securities class action against Barrick Gold (TSX:ABX) (NYSE:GOLD), the world’s second largest bullion miner, for alleged misrepresentations in its environmental disclosures about the stalled Pascua Lama gold-copper mine straddling the Chile-Argentina border.
The suit, approved by the Ontario Superior Court of Justice, claims that Barrick gave a false account of the potential impacts of the multi-billion-dollar project at the time it was being built, in an environmentally sensitive area of the Andes mountain range.
The ruling, which only refers to information published in Barrick’s second quarter 2012 report, shows that Local 675 pension’s trustees are suing the Toronto-based miner over various disclosures it made about the project, which was ultimately abandoned, resulting in billions worth of shareholder losses.
Pascua-Lama has been shuttered since 2013, when a Chilean court ordered the company to halt construction over environmental concerns. Later that year, Barrick shelved the project, citing massive cost overruns and nose-diving metal prices.
The original plan for the mine, which required a capital outlay of more than $8 billion, contemplated an open-pit operation that would have had an effect on three small glaciers in the Chilean side of the Andes. It also involved major construction in the area and huge waste dumps.
In 2016, Barrick began a “drastic revision” of the project and agreed to pay $140 million to resolve a US class-action lawsuit that accused it of distorting facts related to the controversial project.
Shortly after, Barrick abandoned the idea of an open pit at the site, saying it planned to mine underground instead.
In April 2017, it sold a 50% stake in its Veladero mine in Argentina to Shandong Gold Group in a transaction worth $960 million. As part of that deal, which made the two firms strategic partners, the Shandong province-based gold miner committed to help Barrick move forward with Pascua Lama.
Later that same year, the company agreed to pay a further $20 million to a Chilean group in order to settle an arbitration case against the company, filed last year after the gold producer halted payments settled in 2005.
Argentina has been an enthusiastic supporter of the project – while only around a fifth of the deposit is located in that country, many of the above-ground facilities will be built on that side of the border.
If it ever comes into production, Pascua-Lama would generate about 800,000 to 850,000 ounces of gold and 35 million ounces of silver per year in the first full five years of its 25-year life.
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https://www.miningnews.ir/En/News/433042
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