Bauxite slumps on litigation threat

Shares in Bauxite Resources have dropped to a record low after litigation funder IMF Australia had indicated it would fund claims that current and former shareholders may have against Bauxite Resources.

Shares in Perth-based Bauxite Resources plunged four cents, or 19.51 per cent, to 16.5 cents after hitting a low of 15 cents in intraday trade.

The proposed claims relate to a placement of 60 million shares by Bauxite Resources at a price of 95 cents each on or about 30 October 2009, IMF said in a statement.

"BRL (Bauxite Resources) has not been issued with any formal proceedings, and no threat of litigation has been made directly by current or former shareholders," the miner said in a statement on Monday.

Bauxite Resources has come under fire for its proposal to mine state forest in Western Australia's south and expand existing mining on semi-rural land near Perth where residents have complained about dust omissions.