Class action lawsuit filed against Barrick
TORONTO - A proposed class action lawsuit has been filed against Barrick Gold Corp. (TSX:ABX) and several of its current and former executives, accusing the gold miner of misrepresenting the status of its troubled Pascua-Lama project in South America.
The Merchant Law Group filed the lawsuits with courts in Ontario and Alberta on behalf of those who bought Barrick shares from May 7, 2009, until May 23, 2013.
"The class actions allege that Barrick Gold shareholders lost billions of dollars as a result of Barrick's misrepresentations and failures regarding the Pascua-Lama mine project," the Merchant Law Group said in a statement.
The allegations have not been proven in court.
The lawsuits name the company as well as chief executive Jamie Sokalsky, chief financial officer Ammar Al-joundi and former chief executive Aaron Regent.
Barrick said it disputes the allegations and will defend itself against any lawsuit vigorously.
The gold miner suspended work at the Pascua-Lama project last year following massive cost overruns and protests from an indigenous community living below the project, which tried to have Barrick's licence revoked and force a new environmental impact study.
The Supreme Court of Chile stopped short of ordering a new review and upheld the environmental permit, but put construction on hold until Barrick's environmental commitments and work to protect the water systems was completed.
When Barrick first gave the green light to the project high in the Andes on the border between Chile and Argentina, it was expected to cost US$2.8 billion to US$3 billion to build, with commissioning to begin in late 2012 and production in early 2013.
But costs have soared since then and Pascua-Lama has been hit by several delays.
The Canadian case follows a lawsuit filed in the U.S. by a group of investors who allege Barrick violated securities laws by making false and misleading statements and by concealing information related to the cost and development schedule for Pascua-Lama.
The U.S. lawsuit was filed with the U.S. District Court for the Southern District of New York and covers investors who bough Barrick Gold stock on the New York Stock Exchange between May 7, 2009, and May 23, 2013.