Case: Nevsun Resources, Ltd., No. 12-cv-1845 (S.D.N.Y.)
Court: United States District Court for the Southern District of New York

Class Period: March 28, 2011 - February 6, 2012
Attorneys: Robert N. Kaplan, Frederic S. Fox, Jeffrey P. Campisi

Kaplan Fox is the court appointed co-lead counsel in the securities class action against Nevsun Resources, Ltd. (“Nevsun” or the “Company”) and other related defendants in connection with Nevsun’s recent disclosure that it had materially misstated its financial results. In this case, Kaplan Fox represents the court appointed lead plaintiff, Craig F. Piazza and additional plaintiff Scott F. Colebourne.

The complaint alleges that throughout the Class Period the Company made materially false and misleading statements and failed to disclose that (a) Nevsun’s mining at the Bisha Mine resulted in a material amount of waste rock, rather than gold ore; (b) that gold ore and gold from the Bisha Mine was materially less than the amount estimated by the Company’s model and defendants knew or had reason to know this based on data routinely collected from the Bisha Mine throughout the Class Period; (c) that Nevsun was progressing through the ore body much more quickly than planned in order to maintain gold production at a rate that would not reveal to investors that the amount of gold at the Bisha Mine was materially less than the Company’s model; (d) that the Company was aware that its model was materially defective because the actual amounts of gold mined at Bisha did not reconcile with the Company’s model previously disseminated to the investing public; and (e) Nevsun materially overstated its gold reserves at the Bisha mine.

 

The complaint further alleges that on February 7, 2012, Nevsun shocked investors when, before the market opened, the Company issued a press release entitled “Nevsun 2012 Outlook Including Production Guidance”, in which the Company disclosed i) that it had materially overstated gold reserves at the Bisha Mine by 30-35%; ii) that the amount of gold to be produced in 2012 would be about half of what Nevsun previously represented to investors; and iii) that it would restate its proven reserves. On February 7, 2012, following these disclosures, Nevsun’s common shares declined in price by $1.94 per share on the NYSE Amex, from a closing price of $6.34 per share on February 6, 2012, to close at $4.40 per share on February 7, 2012, a decline of nearly 31% on heavy volume.