Kinross Gold Corp. said Tuesday a class-action lawsuit launched by shareholders alleging misrepresentation involving a mine in Mauritania is without merit.
Shares in the gold miner fell nearly 20 per cent in January after the company said construction of its Tasiast mine in the West African country will be delayed by months and a writedown on the project was expected.
“It's not uncommon for class-action litigation to be brought against a company following a period of volatility in its share price,” Kinross said in a statement.
“We believe the allegations that have been made are without merit, and we plan to vigorously oppose and defend against any litigation that may result.”
Kinross said last month it would take an additional six to nine months of analysis and planning at Tasiast to determine the optimal processing mix to reduce operating costs.
The review will include a possible change in the ore processing options at the project because of a halo of low-grade ore surrounding the higher grade ore at the deposit.
The plaintiffs are the trustees of the Musicians' Pension Fund of Canada and have launched the case on behalf of all investors who bought Kinross shares from Feb. 16, 2011, through January 16, 2012 on the Toronto Stock Exchange or other secondary market in Canada.
The plaintiffs, whose allegations have not been proven in court, contend there were misrepresentations in Kinross's public disclosure relating to Tasiast including statements relating to the quantity and quality of ore at the mine and the results of Kinross' drilling program.
Kinross is a Canadian-based gold producer with mines and projects in Canada, the United States, Brazil, Chile, Ecuador, Russia, Ghana, and Mauritania.