US judge rules Barrick Gold must face group lawsuit over Pascua-Lama mine
Canada’s Barrick Gold (TSX, NYSE:ABX) will have to face a U.S. class-action lawsuit that accuses the world’s largest gold producer of distorting facts related to its now halted $8.5 billion Pascua-Lama project, straddling the border of Chile and Argentina.
U.S. District Judge Shira Scheindlin in Manhattan ruled Wednesday that shareholders who acquired Barrick shares from May 7, 2009 through Nov. 1, 2013 can pursue their class action, which claims the Toronto-based firm repeatedly and knowingly misled them about whether Pascua-Lama complied with environmental regulations, Law 360 reported.
The Chilean government approved construction of the massive gold mine in 2006, but held Barrick to hundreds of conditions regarding the environment.
On April 10, 2013, an appeals court in Chile ordered the miner to halt construction of the project over detected environmental infractions. The company later admitted to those violations, vowing to make “things right.”
In October that year, Barrick decided to halt Pascua-Lama indefinitely citing massive cost overruns and nose-diving bullion prices.
The company said at the time it would resume it only if it found a cheaper way to proceed and earlier this month it revealed it was re-evaluating plans for the mothballed project. Barrick said it wasn’t ruling out a possible partnership to bring the project to completion.
If ever concluded, Pascua-Lama would produce about 800,000 to 850,000 ounces of gold a year in the first full five years of its 25-year life. The mine is set to become one of the top gold and silver mines in Chile, the world’s top copper producer.