VANCOUVER - Baja Mining Corp. (TSX:BAJ) is reviewing alternatives to defer or reduce costs at its Boleo project in Mexico that it recently said would cost more than expected to build.
The company is considering deferring some or all of the non-copper producing circuits at the project to focus on the higher-valued copper production, as well as reviewing all key roles in the company.
Baja said it was also taking steps to conserve cash and manage the company's short-term cash flow.
"Our objective is to continue to advance our Boleo project so that copper production begins on schedule in the first half of 2013," Baja president and CEO John Greenslade said in a statement.
The company also said Dennis Bailey has been promoted to vice-president construction and development, to replace Mike Shaw, who has resigned.
Bailey is now responsible for engineering, construction, procurement and project management of Boleo and its major contractors.
Baja Mining lost more than a third of its market value Monday after it said the Boleo project would cost US$246 million more than an earlier estimate of $1.143 billion.
The announcement came just weeks after the company narrowly defeated an attempt by a dissident shareholder to make changes to Baja's board.
Baja, which owns a 70 per cent stake in Boleo, attributed the increase to a variety of pressures including change of scope, design improvements and higher costs for steel and fuel.
The company said its Korean partners, which hold the other 30 per cent of Boleo, continue to support the project and are working with the company and the project's lenders to develop the funding plan.
Mount Kellett Capital Management, which holds a 19.9 per cent stake in the company, had accused the board and management of Baja Mining of failing to represent shareholders.
The investment manager tried but failed to have two of its nominees join the Baja board.
For its part, Baja accused Mount Kellett of a creeping takeover of the company, something the investment firm has denied.
Shares in the company added 1.3 per cent or less than a cent to close at 38.5 cents Wednesday on the Toronto Stock Exchange.