MiningWatch Canada Files Complaint About Misrepresentation to Investors by bcMetals
On September 8, 2006, MiningWatch Canada filed a formal complaint with securities regulators in British Columbia and Toronto, charging that bcMetals has misrepresented the risks of its proposed Red Chris Mine in northern British Columbia to its investors.
MiningWatch has asked the B.C. Securities Commission to investigate whether bcMetals has acted contrary to the British Columbia Securities Act, its regulations, and national standards on disclosure, by failing to report material information or material changes to investors and securities regulators.
The Complaint says that press releases issued by bcMetals mislead the public about the potential effects of litigation brought by MiningWatch against the Federal Government and bcMetals Corporation in June.
Company releases issued on June 9 and June 27, 2006, incorrectly suggest that all federal environmental approvals for the proposed Red Chris Mine have been received or will shortly be issued, and omit any mention of the litigation and its risks to the company.
On Friday June 9, 2006, MiningWatch filed a Judicial Review Application in Federal Court seeking to quash the approval made under section 20 of the Canadian Environmental Assessment Act ("CEAA") for the proposed Red Chris Mine Project in north-western British Columbia ("CEAA Screening Approval.") At the core of MiningWatch's Application is the failure of the Federal Government respondents to conduct a federal public consultation as mandated by section 21 of CEAA.
The MiningWatch Canada litigation asks the Federal Court to prohibit the issuance of authorizations necessary for this mine. It specifically asks the Court to prohibit the future issuance of federal environmental approvals required under the Fisheries Act and Explosives Act to bcMetals, and to prohibit a decision by the federal Cabinet to amend the Metal Mining Effluent Regulation ("MMER") which is needed in order to allow bcMetals to turn fish-bearing creek headwaters into the mine's tailings dump.
MiningWatch sees this as a test case of the newly amended CEAA to ensure compliance with environmental law and the protection of the public's right to be consulted on large mine proposals.
"Investors are entitled to know whether the mining companies they may chose to invest in are embroiled in legal proceedings under environmental law. Without disclosure from mining companies, regulators like the B.C. Securities Commission are deprived of their ability to protect the integrity of markets," states the complaint.
The Ontario Superior Court has recently strongly criticized a junior mining exploration company for failing to disclose to investors the nature and extent of community opposition to mine exploration and development. The Court observed that such an approach leads both to greater community opposition and to investment difficulties for the company.
MiningWatch is a national non-profit organization whose members are environmental, social justice, Aboriginal and labour organisations from across the country. Its mandate is to protect against threats to water and air quality, fish and wildlife habitat, and community interests posed by irresponsible mining policies and practices in Canada and internationally.