Barrick Gold Corp. has agreed to pay $140 million to resolve a U.S. class action lawsuit steaming from the complications the company face with its stalled Pascua-Lama project in South America.
Reuters reported that the company filed papers in a U.S. federal court that confirmed the agreement to settle the suit that accuses the company of misleading investors about the $8.5 billion project on the border of Chile and Argentina. In the a statement, Barrick said it “continues to believe that the claims alleged by the lead plaintiffs in the litigation are unfounded, and under the terms of the settlement agreement, the company has not accepted any charges of wrongdoing or liability.”
The lawsuit covers investors who acquired Barrick stock between May 7, 2009 and May 23, 2013. Shares in the company lost 44 percent of its value over that time period, with a large chunk of the losses coming in April and May that year. The class action alleged Barrick shareholders lost billions of dollars as a result of the company’s “misrepresentations and failures” regarding Pascua-Lama.
After falling to 25-year lows in 2015, Barrick stock has rallied this year and the counter was worth $18.8 billion in New York on Tuesday, a 127 percent year-to-date jump.
In 2006, Barrick received approval for construction of the mine but with hundreds of conditions regarding the environment, particularly concerning glaciers surrounding the project high in the Andes.
On April 10, 2013, an appeals court in Chile ordered the miner to halt construction of the project over environmental concerns. In October that year, Barrick decided to halt the technically challenging project 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 project. Barrick said it wasn’t ruling out a possible partnership to bring the project to completion.
Argentina has been an enthusiastic supporter of the project – while only around a fifth of the deposit is located in Argentina many of the above-ground facilities will be built on that side of the border.
If it ever comes into production Pascua-Lama would produce about 800,000 to 850,000 ounces of gold and 35 million ounces of silver per year in the first full five years of its 25-year life.