Santacruz Silver Mining reports fatality at Tres Amigos mine in Bolivia
Tres Amigos mine, a part of the Caballo Blanco Group of mines, has resumed operations after it was shut down following the incident.
Canadian Baja Mining (TSX:BAJ) continues to struggle with cost overruns at its flagship Boleo mine in Mexico, as the company has not yet received any funding proposals for the project and can only run it until August 1, the miner said Friday.
Baja’s shares reacted to the announcement on the Toronto Stock Exchange this morning, dropping a further 18% to 13.5 cents, making the stock one of the biggest losers of the session.
Last week, the Vancouver-based company suffered a major setback after Mount Kellett Capital Management, the company’s largest shareholder, announced it wouldn’t provide debt or equity financing for Boleo.
In late June, Baja said lenders have agreed to a 45-day standstill for the project financing, giving the company more time to arrange funds its copper-cobalt-zinc Boleo project, which is jointly owned by Baja and a Korean consortium.
Also last month Louis Dreyfus, one of Baja’s main shareholders, sued the company because of over expenditures at the Mexican project.
Dreyfus is seeking an independent investigation to the spending at the Boleo project and has also demanded for the removal of “officers and directors that share responsibility for Baja’s alleged failure to make timely disclosure of cost overruns.”
Baja has said it “intends to defend this action vigorously.”
Louis Dreyfus holds roughly 10% of Baja Mining and has sought arbitration through the London court system.
Slippery slope
Baja has lost 80% of its value in the last three months due mainly to the acrimonious boardroom battle which ended with a reconstituted board and the resignation of the CEO and founder in mid-May.
But what has really crushed the miner’s market value was an announcement a little over two months ago that the company’s Boleo project will now cost $1.143 billion to construct, a 21.5% increase.
Before the cost run-ups, first flagged at the end of March, Baja forecast $890 million would be needed to build the mine.
Baja has previously said that Boleo remains on track to enter production in the second half of 2013 and a special committee has now been set up to look at new ways of financing.
The bitter – and very public – boardroom dispute with 20%-shareholder Mount Kellett has kept the tight-knit Vancouver mining community buzzing for months.
Mount Kellett, which has pumped $80 million into Baja, has not been pulling punches, accusing Baja CEO John Greenslade of “enriching family and friends” at the expense of shareholders.
For its part, Baja called Mount Kellett a wolf in sheep’s clothing wishing to stealthily takeover the company.
2 Comments
Kenneth Viney
Exploration company trying to become a production company. Poor management with absolutely no long range management plan. No mining engineering consultant backing the mill design, or the recovery chemistry, no pilot plant to support either the production rate of the mill or the recovery rate of this very complex ore from 5 different boleos, a sulfur burning co-generation plant within 2 k. of the little town, no long term housing development for the staff and workers, no airport near by to provide secutity and fast response for injured workers, poor security,
Remember the 29 cents lbs. producer cost of copper ingot and now the lastest announcement of the cost of mining at $60. a ton x a possible 90% recovery of a 1.2% copper ore has turned into a $64.80 a ton revenue at $ 3.00 per lbs for copper = $2.70 cost per lbs. copper. Quite a difference.
The shareholders need to send a engineering group of estimators to the mine site for two weeks if they are serious about a lawsuit and obtain an estimate of what has been spent on the property as of that date. Then after a as-built class 20 project estimate of what has been spent on the ground there make a decision to sue for fraud and possible mis-appropiation of company funds.
Mt. Kellett was offered that proposal many months back but has refused to move on it. It is my opinion that there was missuse. I was there in Dec. 2010 and very little was going on. They got their first tranch in spring of 2011 and by spring of 2012 they have spent over $600 million? Difficult to impossible to gear up that fast. Proving it will take time and money.
I have other questions for Mr. Kellett’s Mr. Steven Lehner but he refuses to call me back or answer my email. The US EXIM bank is a tad more interested. They made a $400 million profit this last year To bad, except for the $423 million write off of the loan to Baja they might have to take this year I do not understand why they are not screeming as well.l.
ken in napa Ca. 707-237-3433 CoastalGen Inc.
Chis
All those shareholders who have been coned by majority shareholders and board join proposed class action for loss of market value and equitable compensation accordingly with punitive damages and costs.