(Ottawa) On the day of Barrick Gold’s Annual General Meeting, April 30, 2014, Montreal-based law firm Trudel and Johnston filed a law suit on behalf of shareholders against Barrick Gold Corporation (Barrick) and four of its Directors and Senior Officers. The suit alleges that between May 7, 2009 and November 1, 2013, Barrick Gold failed to provide timely disclosure of material changes and made several misrepresentations regarding the progress, cost, and feasibility of its Pascua-Lama gold-silver mine project located on the border between Chile and Argentina.
This class action suit follows a similar suit filed on behalf of Barrick Gold shareholders by Sutts, Strosberg LLP in Ontario on April 24, 2014, and another filed by Glancy Binkow & Goldberg LLP on June 5, 2013, in the United States District Court for the Southern District of New York, on behalf of Barrick Gold shareholders who bought shares on the New York Stock exchange between May 7, 2009 and November 1, 2013.
The Pascua-Lama project at the centre of these lawsuits has been plagued by massive cost overruns and delays. The project was originally predicted to cost up to $3 billion (US) to build and was expected to start production early in 2013. When the true costs were revealed in 2013, they had ballooned to approximately $8.5 billion and the project, which was much behind schedule, was suspended. Barrick’s stock fell sharply as the true state of the Pascua-Lama project was revealed and is now worth considerably less than in 2012.
Analysts point to political opposition, labour unrest, a drop in the gold price, environmental concerns, and permitting issues to make sense of how the Pascua-Lama project fiasco tripped up the world’s biggest gold mining company. But among all these, the critical factor in explaining the demise of the project is the opposition mounted by Indigenous peoples living downstream from the proposed mine. That opposition was centred on their concern about impacts to the glaciers at the 5000-metre high mine site, and to water flowing into the valley from the mountains – water that enables the local agricultural economy.
Indigenous Diaguita representatives have been very public in their opposition to the proposed mine. “If shareholders had paid attention to the protests outside of Barrick’s AGM in recent years, and to the statements made by Diaguita leaders inside the AGM, they would have learned why there was such serious local opposition to the Pascua Lama project,” says Catherine Coumans of MiningWatch Canada. “Shareholders need to inform themselves about what is going on at Barrick’s projects globally. It is clearly not enough to rely on the company’s information – or lack thereof.”
After traveling from Chile to Toronto to protest the mine at Barrick’s AGM for a number of years, affected Diaguita groups filed a lawsuit against the project in Chile in 2013. That same year, the mine faced serious charges from Chilean environmental authorities that it was failing to meet conditions related to protection of water. In September of 2013, the Supreme Court responded to an appeal by the lawyer for the Diaguita and suspended the mine’s environmental permit.
For information contact: Catherine Coumans, MiningWatch Canada, (613) 569-3439 [email protected]
See the Trudel and Johnston documents here.
See background on the long-standing conflict over the Pascua Lama project, including a controversial $60 million agreement between Barrick and local farmers, here.
For more information on damage to glaciers caused by the Pascua Lama project see:
Government Study: Pascua Lama Threatens Glaciers (Santiago Times)