The Supreme Court of Canada will hear a case concerning whether Lundin Mining Corp. should have more quickly disclosed a rock slide at its Chilean copper mine in late 2017. The decision could significantly impact Canadian capital markets by clarifying the definition of 'material change' required for public company disclosure. Conflicting lower court rulings have left the definition unclear, potentially leading to an increase in class-action lawsuits and a decline in public company listings.
The case is about whether to certify a proposed class-action lawsuit against Lundin Mining Corp. on the basis that the company should have more quickly disclosed a rock slide that led to the temporary partial closing of its Chilean copper mine in late 2017.At some point in 2025, the Supreme Court of Canada is expected to make a decision that could cause turmoil in Canadian capital markets.
Understanding what qualifies as a material change and what does not is crucial for capital markets to function properly, as public companies often have to walk a fine line between ensuring they disclose enough without disclosing too much. “There will be a lot more disclosure to the point of information overload, and then really important material changes will end up getting lost in the shuffle,” he said.as something that occurs to “the business, operations or capital of the issuer that would reasonably be expected to have a significant effect on the market price or value of any of the securities of the issuer.”
“In this case, nobody died or got hurt and no equipment was damaged, but hindsight is always 20/20 because that disclosure triggered a 16-per-cent drop in Lundin’s stock price,” Mr. Sur said. “One of the things that drives whether companies list or stay private, is whether they can see themselves operating in that environment,” she said. “When there is uncertainty, regulatory uncertainty, you’ve created a problem.”
Securities Law Class-Action Lawsuits Material Change Disclosure Canadian Capital Markets Lundin Mining Corp.
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