* Sees $246 mln increase to project costs
* Says three directors resign
* Shares fall 38 pct to near three-year low
By Abhiram Nandakumar
April 23 (Reuters) - Canadian miner Baja Mining Corp said its copper-cobalt-zinc project in Mexico overshot its budget by about 22 percent, mainly because of design changes and higher steel and fuel costs.
The company's shares fell as much as 38 percent to a near three-year low of 56 Canadian cents on Monday on the Toronto Stock Exchange. The stock was one of the biggest percentage losers on the exchange.
"The size of the increase is fairly large and comes as a bit of a shock," said Raymond James analyst Adam Low.
Baja said it expects spending on the Boleo project, which it owns along with a Korean consortium, to be $246 million more than the $1.14 billion estimated in 2010.
Baja, which owns 70 percent of the project, will finance close to $172 million to $175 million of the shortfall, with its Korean partners responsible for the rest.
Baja said it expects to secure funds within the next two months.
Low said Baja may have to sell as much as 20 percent of its stake in the project or opt for equity financing to bridge the gap.
The Vancouver, British Columbia-based miner also said three of its directors have resigned, bringing to four the number of directors who have quit since shareholders voted to keep the board unchanged in a special meeting earlier in April. The company did not say why the three directors resigned.
The special meeting was the culmination of a long battle between the board and Mount Kellett Capital Management LP, Baja's largest shareholder, which had called for a change in top management.
Mount Kellett Capital, which owns 19.84 percent of Baja's outstanding shares as of April 5, was looking to place two of its directors on the board.
Baja's shares were trading down 32 percent at 62 Canadian cents in late morning trade.