Troubled Baja mine gets $30m cash injection from Korean controllers
Baja Mining’s (TSX:BAJ) (OTCQB:BAJFF) troubled Boleo mine in Mexico has received a further injection of cash from the Korean company that now controls the project, but it may result in Baja losing even more of its share in the mine.
Korea Resources Corp. (Kores) will contribute an additional $30 million in construction funding to the mine. The amount will be credited toward the $60 million Kores may contribute toward phase two funding. That funding however would reduce Baja’s interest in the Boleo mine from 26.2% to 20.9%.
Construction on the Minera y Metalúrgica del Boleo mine started in late 2010 and was originally set to cost $1.15 billion. But the project ran into $500 million in cost overruns and construction was halted on the half-finished mine.
The financial troubles forced Baja to lay off 40% of its staff in June 2012; in December 2012, the company’s founder, John Greenslade, was forced to resign. The company was further troubled by a death at the Boleo site in November 2012.
A consortium of Korean lenders rescued the project in January 2013. In February, Baja’s equity interest in Boleo was reduced from 49% to 26.2%.
By Jen St. Denis – Business in Vancouver