The saga continues at embattled Baja Mining Corp. (TSX:BAJ) with this morning’s announcement that it has laid off 40% of the staff and consultants at its Vancouver headquarters.
The company said the cuts were made in an effort to preserve cash and were effective May 25.
Baja did not disclose the exact number of people affected by the layoffs.
The company is still seeking funding for its $1.14 billion copper-cobalt-zinc-manganese mine in Mexico, which was originally slated to go into production in 2013. Baja is short $400 million on the project.
The funding for cost overruns required under the project’s financing documents is unlikely to be obtained by the mid-June 2012 deadline, and Baja is seeking additional time from its project lenders to enable the necessary diligence to be completed and a realistic financing plan for the Boleo project to be completed.
In the interim, Baja says its has tightened authorization and reporting requirements over expenditure and reduced project and head office expenses.
The past few months have seen the company embroiled in a proxy battle with one if its largest shareholders, the founder and CEO of the company ousted and share prices plummet.
Along with this morning’s announcement, Baja said it is considering halting the construction of the cobalt- and zinc-mining parts of its Boleo project and is discussing the option with project lenders and partners.
Baja believes this will reduce copper commissioning risk, improve the ramp-up of copper production, reduce construction man-hours worked during 2012 and defer approximately US$85 million in capital expenditures until after the completion of the copper circuit.
Because of the funding shortfalls, Baja said it is unable to provide a definitive estimate of the expected copper commissioning date and has withdrawn all previous timing guidance.
