Shareholders have filed a lawsuit against Agnico-Eagle Mines Ltd. that claims the company failed to disclose the risks at its Goldex mine, which was shuttered after flooding last year sending its stock price plunging.
Siskinds LLP said Monday it has filed the proposed suit in the Ontario Superior Court of Justice against the miner and some of its senior officers.
It alleges that the company failed to disclose specific risks regarding ongoing flooding at the mine.
Agnico-Eagle was forced to shut down the mine in Val D'Or, Que., last year due to unstable rock formations and flooding.
The company took a huge writedown on the mine's closure and its share price tumbled to their lowest level since 2007 when the suspension was announced.
The Goldex shutdown, due to the danger of repairing fractured rock formations and related flooding at the underground mine, required a $161.5-million after-tax writeoff and a $32.7-million (U.S.) closure provision.
Agnico-Eagle decided to shut down the mine after suggestions from two separate consulting rock mechanics that the company stop mining until the situation at the space could be further investigated.
It explained that weaker, fractured, volcanic rock in parts of the deposit failed, allowing ground water to flow into the mine.
The proposed class includes all shareholders who acquired a stake between March 26, 2010 and Oct., 19, 2011.
Goldex, one of the lowest-cost underground operations in the industry, began commercial operations in August, 2008.
The Goldex mine is in the Abitibi region of Quebec and part of a group of mines that Agnico-Eagle owns, including the LaRonde and Lapa mines.
Agnico-Eagle has mining operations, exploration and development projects in Canada, Finland, Mexico and the United States.