Mining Report: Reduce Your Risk Of Being A Class-Action Target

This article originally appeared in Business in Vancouver and is reprinted with the permission of the publisher.

Public mining companies have become even more vulnerable due to recent amendments to provincial securities acts, which have simplified the process for filing class-action lawsuits.

The ongoing global economic downturn has coincided with a significant increase in class actions filed against publicly traded companies since 2008. This has important implications for Canada and B.C.'s mining sector.

Mining companies are particularly vulnerable to becoming targets of these lawsuits because of the extent of their reporting obligations, the forward-looking information contained in their public disclosure documents, their relatively deep pockets, sensitivity to escalating project costs and the relative volatility of stock prices in the mining sector.