(Reuters) - Canadian miner Baja Mining Corp BAJ.TO said for the first time it may not be able to continue as a going concern as it struggles to fund its copper-cobalt-zinc project in Mexico, sending its shares down as much as 21 percent.
Baja overshot its budget on the Boleo project, which it owns along with a Korean consortium, by $246 million because of design changes and higher steel and fuel costs.
The company, which made the going-concern comment in the "risk factors" section of its earnings analysis report, warned last week that it would not be able to proceed beyond mid-June without a cash injection.
"They need to come up with the money in the next couple of weeks in order to have it ready for spending by mid-June," said Raymond James analyst Adam Low. "I think it's too short a timeframe to find that sort of money."
Baja might look at short-term solutions in the interim period such as a subordinated bridge loan, Low added.
Risk factors are often lengthy lists of nearly every kind of dire fate that can befall a company. Lawyers add them to the company's documents to tell people, in essence, that they have been warned before investing.
Baja's CEO John Greenslade resigned on Tuesday after the company's top shareholder, Mount Kellett Capital Management LP, called for changes in management to revive the Boleo project.
Baja shares, which have lost 70 percent of their value in the past year, were trading at 26 Canadian cents, their lowest ever, on Wednesday on the Toronto Stock Exchange.
Reporting by Maneesha Tiwari in Bangalore; Editing by Viraj Nair and Saumyadeb Chakrabarty