Baja Mining Corp. (BAJ.TO) has dropped 19% to a new year low of 6.5 cents, on volume 2.7 million.

Yesterda,y, Baja announced that it has secured US$90 million of interim financing for the Boleo copper-cobalt-zinc project. Funds are being provided by the Korean consortium comprising Korea Resources Corporation, LS-Nikko Copper Inc., Hyundai Hysco Co., Ltd., SK Networks Co., Ltd., and Iljin Materials Co., Ltd. which acquired a 30% interest in MMB in July 2008.

The Consortium has committed to contribute US$90 million by August 30, 2012 in Stage I of the financing. In Stage II, the Consortium may choose to contribute additional funding in an amount sufficient to complete the Boleo project.

Both stages of the financing involve significant dilution to Baja’s interest in its subsidiary, Minera y Metalurgica del Boleo S.A. de C.V (MMB). There is no certainty that the Boleo project will be completed, as the Consortium may elect not to complete the Stage I financing, and may determine that it does not wish to proceed with Stage II. After having conducted an extensive but unsuccessful process through BMO Capital Markets to identify a solution to the cost overruns at the Boleo project, and now facing a potential shutdown of the Boleo project in the immediate future and the potential insolvency of MMB, Baja concluded the Consortium’s funding proposal is the only option available at this time with a plausible prospect of preserving any value for Baja’s stakeholders.