TORONTO (miningweekly.com) – London, Ontario law firm Harrison Pensa is proceeding with a class action under the Class Proceedings Act, 1992, against Baja Mining Corp, certain of its former directors and officers and the company's auditor, PwC.
The action alleged that from November 1, 2010, to April 23, 2012, the defendants made misrepresentations and/or failed to make timely disclosure of significant cost overruns and project delays related to Baja's Boleo project, in Baja California Sur, Mexico.
The $2-billion Boleo project entailed the biggest-ever investment by a company in the Baja California Sur state and comprised one of the largest copper deposits in North America.
Since receiving financing in 2010 to start construction of the process plant, the Boleo project had several times teetered on the brink of failure since 2012, when Baja reported a budget blowout of between $200-million and $400-million more than the $1.14-billion budget estimated in 2010.
Baja founder John Greenslade then resigned as president and CEO, after which investors sued the company, only to be rescued by a consortium of Korean lenders headed by Korean Resources Corporation with 90% project ownership, with Baja retaining a 10% stake.
On April 22 last year, the Ontario Superior Court of Justice granted permission to the plaintiff to assert as against the defendants, the statutory cause of action for secondary market misrepresentations in certain of Baja's public filings during the class period. Obtaining leave was a requirement under the Ontario Securities Act and was a preliminary procedural matter.
The court had also certified the action as a class proceeding and appointed the law firm as class counsel on behalf of all persons and entities, wherever they resided or were domiciled, who acquired Baja securities between the class period and who held some or all of those securities from April 23, 2012.
The leave to proceed and the certification order meant that the court had allowed the action to proceed to trial with regard to certain original claims as a class proceeding and had sanctioned the plaintiff to pursue the statutory claims under the Ontario Securities Act on behalf of the class.
Investors who did not wish to be part of the class action would be required to ‘opt-out’ by June 1.
The Boleo copper/cobalt/zinc/manganese project produced its first copper in January.