Kirkland Lake Gold, the Canadian mining company, was sued on Monday in US federal court for allegedly defrauding shareholders about its business plans before its C$4.1-billion purchase of Detour Gold caused its stock to tumble.
In a proposed class action filed in US District Court in Manhattan, shareholder Stephen Brahms accused Toronto-based Kirkland of making false and misleading statements during 2019 about its risks and two key mining metrics, all-in sustaining costs and reserve grade. Brahms said the statements artificially inflated Kirkland’s share price prior to November 25, 2019, when the Detour purchase was announced and Kirkland shares fell 17.3% in Toronto and 17.2% in New York.
Kirkland’s chief executive, Tony Makuch, was also named as a defendant in the lawsuit, which seeks unspecified damages for Kirkland shareholders from January 8 to November 25, 2019.