Mineral sands miner Iluka Resources (ILU) says it will vigorously defend itself against a class action over claims it deceived shareholders in 2012 leading to a fall in its share price.
ACA Lawyers says it has funding for a class action in the Federal Court on behalf of shareholders who, it claims, lost money because the Perth-based miner misled investors about a drop in sales.
But Iluka said it has not received documented claims, apart from what it has read in the media, and will defend itself on receiving any claims.
The action relates to events on July 9, 2012, when Iluka announced a sharp downgrade in sales anticipated for the year - to a little over half of what had been forecast just two months earlier.
Iluka's share price plummeted 24% in a day on the ASX, from $11.70 to $8.88.
Iluka produces zircon and rutile, which are used in ceramics and paints and whose fortunes are tied to building activity, especially in China.
ACA lawyer Steven Lewis said Iluka had failed to comply with its continuous disclosure obligation and engaged in misleading or deceptive conduct.
"It will be alleged that Iluka's zircon sales forecast in May 2012 was overly optimistic and not achievable," he said.
"The company had information prior to July 2012 that it could not achieve its forecast and did not keep the market informed."
Iluka said it has fulfilled its disclosure obligations at all times.
"During 2012, market conditions for mineral sands were extremely volatile and, in the case of zircon, conditions deteriorated markedly during the year," Iluka said in a statement.
Iluka said market conditions led it to make formal disclosures to the ASX in May and July 2012.
At 11.00am (AEDT) on Monday, Iluka's share price was down 5.0c to $9.57.
London-based Harbour Litigation Funding is providing funding.
Harbour is also funding ACA's multi-million-dollar class action launched last month against Oz Minerals for allegedly misleading shareholders.