Supreme Court lets Lundin disclosure lawsuit proceed over mine rockslide

The Supreme Court of Canada upheld an investor’s permission to pursue a securities lawsuit against Lundin Mining Corporation and several officers and directors in a November 28, 2025 decision about when public companies must promptly disclose developments affecting their operations.

The 8–1 ruling in Lundin Mining Corp. v. Markowich, 2025 SCC 39, concerned pit wall instability and a subsequent rockslide at the company’s Candelaria mine in Chile. The majority found a reasonable possibility that investor Dov Markowich could establish at trial that those events resulted in material changes requiring immediate disclosure. It did not find the defendants liable or award investors damages.

Writing for eight judges, Justice Mahmud Jamal rejected an interpretation that effectively required a company’s operations to undergo a fundamental shift before a development could qualify for assessment as a material change. The ruling matters beyond mining: it explains how courts should apply Ontario’s securities disclosure rules and the preliminary screening test for investor lawsuits, against a backdrop of similar legislation across Canada.

A month between the rockslide and disclosure

Lundin detected localized pit wall instability on October 25, 2017. A rockslide followed on October 31, restricting access to part of the open pit. No one was killed or injured, and no equipment was damaged. The evidence about the duration and extent of any shutdown was disputed; the court did not establish that the entire mining complex stopped operating.

The company disclosed the events on November 29, 2017, in a regular operational update. It lowered Candelaria’s copper production forecast for 2018 by 20 per cent from the previous outlook, described revised mining phases and planned to use lower-grade stockpiled ore to make up lost production. Lundin’s shares fell 16 per cent the following day, representing more than $1 billion in lost market capitalization. Those figures describe the market reaction, not damages awarded in this case.

Markowich had purchased 10,000 Lundin shares between November 15 and 27, 2017. He sought to pursue a statutory claim alleging that the instability and rockslide should each have been disclosed promptly, and to have a proposed class proceeding certified. The motion judge refused permission to bring the statutory action, reasoning that Lundin continued its business and operations as a mining company. The Ontario Court of Appeal reversed that decision and returned class certification issues to the Superior Court.

A change need not transform the company

The distinction at the centre of the appeal was between a material fact and a material change. Under the statutory framework examined by the court, material facts are addressed through periodic disclosure. Material changes generally require immediate disclosure. Both involve information reasonably expected to have a significant effect on the market price or value of securities, but a material change also requires a change in the issuer’s business, operations or capital.

The majority said those requirements must remain separate. Identifying a change involves examining its nature; deciding whether it is material involves assessing its expected market significance. Courts should not add a requirement that the change be fundamental, core or substantial before reaching the materiality question.

The legislature left the relevant commercial terms undefined so they could be applied flexibly across industries and circumstances, Jamal explained. Restrictive definitions could defeat that purpose. Lundin did not have to lose the ability to mine, or face a threat to its economic viability, for a change in its operations to be possible.

That approach does not mean every event affecting a company must immediately be announced. The majority preserved the distinction between facts and changes: an external political or economic development does not itself qualify unless it produces a material change within the issuer. Negotiations and internal deliberations generally require something more, and routine developments that leave the company’s position unchanged may not qualify. Materiality remains a separate requirement.

For Lundin, the majority emphasized uncontested evidence that the events affected operations by requiring reduced production forecasts, use of lower-grade ore and adjustments to the sequence of open-pit mining. The unresolved expert dispute about the shutdown did not justify preventing the claim from proceeding. Further evidence about the immediate operational effects could become available through document production and questioning before trial.

Permission to sue is a preliminary test

Ontario’s Securities Act requires a plaintiff seeking to bring this statutory action to show good faith and a reasonable possibility of success at trial. Good faith was not disputed here. Nor was the preliminary conclusion that any qualifying change could be shown to be material; the contested issue was whether the events could constitute a change in Lundin’s operations.

The Supreme Court described the leave requirement as a preliminary assessment of the claim’s merits, designed to screen out weak litigation without becoming a trial itself. A plaintiff needs a realistic chance of success supported by credible evidence, rather than a mere possibility. The plaintiff need not prove at this stage that success is more likely than not.

Judges must consider both sides’ evidence and its comparative strength, while recognizing the limits of a record assembled before document production and discovery. They should not resolve genuinely contested issues arising from conflicting credible evidence as though deciding the trial.

The court also corrected an aspect of the Court of Appeal’s reasoning. A plaintiff cannot pass the test simply by offering a plausible interpretation of the statute. The legal interpretation must be correct. What must be plausible is the application of that law to the available evidence. Justice Suzanne Côté, although dissenting on the result, agreed with that distinction.

Dissent warned of excessive disclosure

Côté would have restored the refusal of permission to sue. She considered a change to require a shift in the issuer’s business, operations or capital understood at a core or high level, and regarded the motion judge’s interpretation as consistent with the legislature’s choice to distinguish immediate from periodic disclosure.

In her view, the events led to modest adjustments to already planned mining sequences rather than the required change in Lundin’s business or operations. She warned that the majority’s broader approach could encourage excessive or premature disclosure, increase compliance and insurance costs, and make it harder for investors to identify useful information. Those were concerns expressed in dissent, not findings that such consequences had occurred.

The majority rejected the narrower approach as inconsistent with the statutory language and the purpose of reducing information gaps between issuers and investors. It dismissed the appeal with costs, preserving Markowich’s permission to pursue the statutory claim. The Supreme Court’s decision left the alleged disclosure breach to be determined in the litigation and did not itself certify the proposed class proceeding.

Source: Lundin Mining Corp. v. Markowich, 2025 SCC 39, decided November 28, 2025.