Newman Ferrara announces that a class action lawsuit has been filed in the Unites States District Court for the District of Nevada on behalf of all purchasers of the common stock of Allied Nevada Gold between January 18, 2013, and August 5, 2013, inclusive (the “Class Period”).
Allied Nevada, a company focused on gold and silver mining and exploration, maintains its operations at the Hycroft gold mine Nevada. Allied Nevada employs a chemical "heap leaching" process to extract gold and silver from ores at its three leach pads; the Lewis, Brimstone, and North leach pads.
The Complaint alleges that defendants issued materially false and misleading statements during the Class Period concerning the Company’s operations and financial prospects, including statements concerning expansion of the Hycroft mine, serious operational defects and problems at the Lewis leach pad, and soaring costs associated with remediation of the Lewis leach pad.
In August 2013, when the Allied Nevada finally disclosed these issues in addition to weak cash flow from operations, and the fact that the Company was suspending indefinitely construction of the mill at the Hycroft mine, the price of Allied Nevada shares dropped from $5.90 per share on August 5, 2013, to a closing price of $3.73 per share on August 7, 2013, on heavy trading volume.
Making matters worse, in the weeks before the adverse revelations, the Company sold $150.5 million shares in a secondary public offering.