Shareholders of Coeur d’Alene Mines Corp. have filed a class action lawsuit alleging the company violated federal security laws during 1995 and 1996.
The lawsuit filed Wednesday in U.S. District Court in Denver claims the Coeur d’Alene mining company artificially inflated prices and misled stockholders about activity at its Golden Cross mine in New Zealand and other mines.
The suit names only one plaintiff, Queen Uno Limited Partnership of Chicago.
The suit alleges that the company said that all activities at its Fachinal mine in Chile were on time and under budget, but later the company admitted that mine never reached commercial production during 1996, producing only 25,000 ounces of gold that year.
The company shocked investors last July when it announced it would write off the entire $53 million investment in its New Zealand Golden Cross Mine. Because of structural problems with the tailings dam, the company plans to complete mining this December, said Mitchell Krebs, manager of industrial relations for Coeur d’Alene Mines.
The suit claims the company said it was operating the Golden Cross Mine at a lower cost per ounce of gold than in previous years, but the company was decreasing it’s production by 40 percent.
A San Diego law firm handling the case said 25,000 shares of stock are involved.
James Sabala, senior vice president and chief financial officer for Coeur d’Alene Mines, said the suit was “baseless and without merit.”
“We will seek whatever remedies from the plaintiffs and we intend to defend it vigorously.”
The company’s stock price increased from $14.50 per share to a period high of $25.75 from January 1995 to July 1996.
The company’s stocks closed at $13 a share Thursday, down 12.5 cents.
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