Kinross faces new $4-billion class-action lawsuit

Kinross Gold Corp. has been slapped with an enormous class action lawsuit related to the troubles at its Tasiast mine in Mauritania, the second such suit filed against the miner in less than a month.

The latest suit, a $4-billion class action filed by Canadian firm Koskie Minsky LLP, comes after a similar claim was filed in the United States in February.

Both lawsuits relate to Kinross’s disclosure around Tasiast. The company took an enormous US$2.49-billion impairment charge on the project this year, and the suits claim that the miner made misrepesentations relating to the quality and quantity of gold ore.

“Shareholders have lost billions of dollars as a result of management’s repeated assurances that the mine in Mauritania was a viable mine with substantial reserves,” Koskie Minsky partner Kirk Baert said. “Now they want to write down $2.49 billion in goodwill just 18 months after the purchase of the mine. Something is very wrong here.”

Kinross dismissed the allegations.

“It’s not uncommon for class action litigation to be brought against a company following a period of volatility in its share price. 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,” the company said.

Kinross is not the only Canadian gold miner feeling the heat from class action lawyers. Agnico-Eagle Mines Ltd. was sued this week by Siskinds LLP, which claims the company failed to disclose the problems at its Goldex mine. That mine was shut last year because of safety concerns.