A Vancouver junior miner that developed a $2 billion copper mine in Mexico has been reduced to a penny stock company with dwindling prospects and may now have to walk away from the mine it helped build.
Baja Mining Corp. (TSX-V:BAJ) has announced a 1-20 share rollback and a name change. Baja’s share value fell 33%, from $0.015 to $0.01, October 6, following the announcement on October 5.
Running at a loss, it cannot afford its share of a recent cash call to continue funding the Minera y Metalúrgica del Boleo mine in Mexico, the company says.
The announcement comes after nearly a year of the company’s stock languishing at around $0.01 per share.
Founded by Vancouver’s John Greenslade, Baja had partnered with Korean investors to develop the Boleo copper mine in Mexico, but lost control of the project after it was discovered that the mine would cost about $750 million than expected to build.
Greenslade staked the property on the Baja California peninsula of Mexico in the 1990s and in 2010 Baja raised $1 billion.
Greenslade was forced to resign as CEO after it was discovered that the project’s capital costs had been dramatically underestimated.
Baja ended up losing its majority stake in the mine project to a consortium of Korean investors. And now it appears Baja could lose its remaining 10% stake in the mine, which went into production in early 2015, 18 months behind schedule.
In its most recent management and discussion analysis, Baja says it has told Minera y Metalúrgica del Boleo – controlled by a consortium of Korean investors – that it won’t be able to cover its 10% of a recent $40 million cash call to continue fund operations.
“This may result in a further decrease in Baja’s ownership of the Boleo Project,” the company states.
In the first half of 2016, Baja recorded a net loss of $1.6 million, and the company says the Boleo mine has provided no source of income, only losses. With working capital of just $54,000 at the end of the first half of 2016, Baja now appears to be bailing on the Boleo project.
The company plans to change its name to Camrova Resources Inc. and plans to consolidate its 340.2 million common shares to 17 million in a 1-20 rollback.
