August 21, 2012 / 2:27 PM / in 5 years

Baja Mining says Korean partners fail to pay up for Mexico project

Aug 21 (Reuters) - Baja Mining Corp said its Korean partners for the cash-strapped Boleo project in Mexico failed to fully pay the first tranche of $90 million financing by the Monday deadline.

Shares of Baja, which has been grappling with cost overruns at the copper-cobalt-zinc project, fell as much as 20 percent to 6.0 Canadian cents on Tuesday morning on the Toronto stock Exchange. The stock was one of the top percentage losers on the exchange.

The Canadian miner, whose CEO resigned in May, also said Rowland Wallenius will no longer remain its CFO under a transition plan.

Under the plan, Baja’s stake in its subsidiary, which manages the project, will come down to 49 percent from 70 percent. Also, the subsidiary will employ certain Baja personnel, including the CFO, to manage the project.

The Korean consortium earlier this month had agreed to inject $11.2 million immediately. It was required to pay an additional $18 million by Aug. 9 and another $60.8 million by Aug. 20.

Baja had warned that if the Korean consortium did not contribute the entire $90 million in the first stage of financing or chose not to proceed with the second stage of funding, it would have to shut down the operations.

The consortium is in talks with lenders, Baja said in a statement on Tuesday. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila)

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