Newspaper article The Canadian Press

Barrick Named in Canadian Class Action Suit over Troubled Pascua-Lama Project

Newspaper article The Canadian Press

Barrick Named in Canadian Class Action Suit over Troubled Pascua-Lama Project

Article excerpt

Barrick named in Canadian class action suit

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TORONTO - Several Canadian law firms are pursuing a class action against Barrick Gold Corp. (TSX:ABX) and some of its current and former senior officers, alleging they misrepresented how much risk the company faced when it undertook construction of the multibillion-dollar Pascua-Lama mine project in South America.

The project involves one of world's largest deposits of gold, estimated at nearly 18 million ounces, but the company missed its original target of starting production in early 2013 due to opposition from local groups and Chilean authorities.

The suit, filed Wednesday with the Ontario Superior Court of Justice, alleges Barrick described Pascua-Lama as a feasible and highly economic project due to the low cost to construct the mine and to produce gold and silver from it, adding that the company knew or should have known that it would have to overcome significant obstacles.

"The mine is located underneath glaciers in the Andes mountains and the environment is subject to extreme temperature and weather changes. Barrick is a sophisticated mining company that has constructed and operated mines all over the world. The challenges in developing Pascua-Lama were or should have been readily apparent to Barrick," the claim alleges.

"There was also considerable opposition to the Pascua-Lama project from local communities that depended on the water supply the glaciers provided. These communities, along with various environmental groups, were concerned about adverse impacts of mining on the glaciers and contamination of the water supply."

Barrick announced on Oct. 31, following several court and regulatory setbacks in Chile, that it was suspending construction at the project and was uncertain when it would resume. The project was originally estimated to cost between US$2.8 billion and US$3 billion but the estimate had risen to US$8. …

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