Barrick Gold reaches $140m settlement in US investor lawsuit over Pascua-Lama project
Barrick Gold has reached a $140m settlement to resolve a pending class action lawsuit before the US District Court that accused the company of allegedly falsifying facts of its Pascua-Lama project along the border of Chile and Argentina.
Court papers also accused that the company of falsely inflating its market value.
Barrick continues to deny the allegations and said in a statement: "Barrick 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 settlement will resolve the class action that accused Barrick of misleading investors about environmental problems afflicting its project.
It comes two months after shareholders who acquired Barrick common stock on the New York Stock Exchange between 7 May 2009 and 1 November 2013 gained clearance from federal judge to pursue the case as a class action.
Union Asset Management and LRI Invest, the lead plaintiffs in the case, alleged that Barrick and certain existing and former executives misrepresented the company's compliance with environmental regulations relating to the Pascua-Lama mine.
The court denied in part the defendants' motion on 1 April last year to dismiss the Consolidated Amended Class Action Complaint and granted the lead plaintiffs' motion for class certification on 23 March this year.
Motley Rice lead attorney for the plaintiffs James Hughes said: "I am pleased we were able to reach this resolution for investors."
From 2000 to 2006, Barrick worked to obtain environmental approval from the Chilean and Argentine governments and on 7 May 2009 announced that it would start construction at the site, claiming it would yield double-digit returns for investors.
Lead plaintiffs claimed that the company released statements to investors that the mine had adequate internal controls despite significant environmental compliance issues throughout the class period, which resulted in the issuance of an injunction that halted project construction.
Originally acquired by Barrick in 1994, the Pascua-Lama project was halted on 31 October 2013 due to cost overruns, environmental concerns and political opposition.
The company has invested around $5bn on the project already.