The statements below are Rochon Genova’s account of this case. They reflect allegations or the firm’s position and have not been determined by a court unless a settlement or judgment is noted.
About This Case
This Canada-wide class action, filed with the Ontario Superior Court of Justice, alleges secondary and primary market misrepresentations made by Barrick Gold during the development of the multi-billion-dollar Pascua Lama project, an open-pit mine in the High Andes straddling the border of Chile and Argentina.
In 2009, Barrick announced the Pascua Lama gold mine project on the Chile-Argentina border, touting it as one of the world’s largest and lowest-cost gold mines, with an initial capital expenditure estimate of $2.8–$3 billion and production expected by early 2013. The project was central to Barrick’s growth strategy, projected to produce 750,000–800,000 ounces of gold and 35 million ounces of silver annually. However, the mine’s high-altitude location in the Andes and its proximity to critical water sources made it highly complex and subject to strict environmental oversight. Barrick was required to comply with a rigorous environmental permit (RCA), including constructing a comprehensive water management system (WMS) before commencing pre-stripping to prevent contamination from acid rock drainage. Chile’s environmental regime imposed severe sanctions for non-compliance, including suspension or revocation of permits.
Despite mounting internal evidence in 2012 of major cost overruns, unreliable contractor estimates, significant construction delays, and an incomplete WMS, Barrick continued to publicly project mid-2013 production and a $4.7–$5.0 billion budget—while internal estimates had risen as high as $7.5 billion. In May 2012, Barrick proceeded with pre-stripping before completing the WMS, which subsequently failed during glacial melt events. Chilean regulators found Barrick in serious breach of its environmental permit, leading to court-ordered suspension of the project in April 2013 and, ultimately, its permanent closure. The project’s collapse resulted in billions of dollars in shareholder losses, reflected in sharp share price declines following a series of corrective disclosures between February 2012 and June 2013.
Source: Rochon Genova
Who May Be Eligible
The CAPEX Class: All individuals and entities, wherever they may reside or are domiciled, other than residents of Quebec and the Excluded Persons, who acquired common shares of Barrick on the TSX or other secondary market in Canada from and including February 16, 2012 to and including May 2, 2012 or July 26, 2012, and held some or all of those shares through May 2, 2012 or July 26, 2012. The Environmental Class: All individuals and entities, wherever they may reside or are domiciled, other than residents of Quebec and the Excluded Persons, who acquired common shares of Barrick on the TSX or other secondary market in Canada from and including July 26, 2012 to and including November 1, 2012, April 10, 2013 or June 28, 2013 and held some or all of those shares through November 1, 2012, April 10, 2013 or June 28, 2013. The Court declined to certify the Plaintiffs’ primary market claims under s. 130.1 of the OSA. “Excluded Persons” are Aaron W. Regent, Jamie C. Sokalsky, and Ammar Al-Joundi (the “Individual Defendants”), members of the immediate families of the Individual Defendants, or the directors, officers, subsidiaries and affiliates of Barrick.
Source: Rochon Genova
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