(Reuters) – Baja Mining Corp’s largest shareholder, Mount Kellett Capital Management LP, said it will not provide debt or equity financing for the Canadian miner’s Boleo copper-cobalt-zinc project in Mexico.

Mount Kellett Capital, however, said it would consider providing permanent financing for the company and the project, if Baja was willing to tie up with a strategic investor that has experience in managing such projects.

Baja, which has been struggling with cost overruns at its flagship Boleo project, last month said lenders agreed to a 45-day standstill for the project financing.

Spending at the Boleo project, which is 70 percent owned by Baja and rest by a Korean consortium, is expected to be $246 million more than the $1.14 billion estimated in 2010, Baja said in April.

Mount Kellett Capital, which holds about 20 percent stake in Baja, said it would continue its due diligence review of the company, it said in a regulatory filing.

Privately held Dreyfus, Baja’s second-largest shareholder, last month sought an independent investigation into the cost overruns at the Boleo project. France-based Dreyfus also sought removal of some officers and directors.

Shares of Baja closed at 19 Canadian cents on Wednesday on the Toronto Stock Exchange. The stock has lost more than 80 percent of its value in the past one year.


Major Drilling Group International Inc. is one of the world’s largest drilling services companies primarily serving the mining industry. Established in 1980, Major Drilling has over 1,000 years of combined experience and expertise within its management team alone.

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