TORONTO (miningweekly.com) – Shares in Canada Lithium Corp (CLQ) sank again on Monday after the company said the Ontario Securities Commission (OSC) had found it in breach of disclosure requirements.

The default relates to the “material reduction” in resources the company expects to report in about two weeks for its Quebec lithium project. CLQ is also facing a C$50-million class action lawsuit over the looming reduction.

The TSX-listed junior said AMC Mining Consultants would complete an independent resource review on the project by May 13.

CLQ’s stock fell more than 10% in heavy trade on Monday morning, before regaining some ground to trade at C$0,68 by 10:42, a 5,5% drop on Friday’s closing price.

The company said it would remain in default with the OSC’s disclosure requirements until it has published the new resource estimate.

CLQ has asked Canadian securities regulatory authorities to impose a share trading halt on the company’s CEO and CFO instead of on all investors in its stock, adding it would issue bi-weekly default status reports while it is still in default.

The company’s Quebec lithium project is an underground mine that operated from 1955 to 1965.

In February, CLQ announced it had discovered issues with the resource statement it published in October, and contracted Roscoe, Postle & Associates to do a preliminary resource review, confirming that there were “significant issues with the geological modelling”.

The company subsequently brought in AMC to conduct a full resources review.

It is still too early to determine how much smaller the resources at the project might be, though CLQ has said the reduction will be “material”.

Last month, London, Ontario, law firm Siskinds announced it had launched a C$50-million law suit against certain CLQ directors and the company itself over the disclosure debacle.

Before the February announcement of the resources reduction, CLQ’s shares had been trading as high as C$2,23.
 

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.