The largest shareholder of Baja Mining Corp. (TSX: BAJ) (OTCQX: BAJFF) (“Baja” or the “Company”), Mount Kellett Capital Management LP (“Mount Kellett”), today expressed disappointment over the management information circular filed by Baja on February 9, 2012:

“Baja’s circular is direct and undeniable proof of the need for better oversight at the Company. Baja is seeking to misdirect shareholders by making misleading, slanderous and incomplete statements about Mount Kellett’s intentions. In addition, the ridiculous hypotheticals put forward by Baja assume that Baja shareholders have a limited understanding of shareholder rights and Canadian securities laws, which is an insult to everyone involved.

“We invested a substantial amount of capital in Baja because we believe that there is tremendous potential for the Boleo copper project. Primary copper assets on the verge of production are an increasingly rare and coveted commodity globally. The scarcity of these projects creates a significant value potential for all shareholders, but Baja management is creating unnecessary risk due to its governance practices.

“The company is at an extremely critical time in its evolution and shareholders deserve better governance. To incorporate a few new policies after having been publicly exposed for self-interested decisions and poor oversight does not create faith in management or trust in the Board to live up to its fiduciary responsibilities.

“We fully supported the recent adoption of a shareholder rights plan by the Company to protect shareholder value from opportunistic approaches. The protection that shareholders now lack is responsible and independent oversight at the Board level to protect against self-serving enrichment and transfers of value in related party transactions.

“Our independent nominees stand prepared to hold management accountable and to uphold the necessary fiduciary duties to shareholders to protect their investment in Baja. There is no higher responsibility and our nominees will work in the best interests of all shareholders. We look forward to shareholder support for both of Mount Kellett’s nominees at the upcoming special meeting.”

Mount Kellett noted that it supported Baja’s adoption of its Shareholder Rights Plan and voted for its adoption in May 2011. Further, Mount Kellett publicly confirms that:

  • It has never planned, nor does it intend, a takeover of Baja; and
  • It has twice proposed signing a standstill agreement, including most recently in mid-January when it offered Baja a standstill against a takeover bid by Mount Kellett.

Mount Kellett finds it nonsensical that management is attempting to distract shareholders with the threat of a takeover bid. For instance:

  • The shareholder rights’ plan, which Mount Kellett supported, limits any takeover of the Company.
  • Acquiring more than 20% of the common shares of Baja would trigger onerous takeover bid requirements under Canadian securities laws, which are compounded by the Shareholder Rights Plan.
  • Baja’s project financing contains a change of control provision, which Mount Kellett has no intention of jeopardizing.

Mount Kellett will shortly be disseminating its own circular, which will further explain the simple and logical governance and oversight failings of the Company that remain to be addressed and the urgent and immediate need for independent shareholder representation on the Baja Board of Directors.

About Mount Kellett Capital Management LP

Mount Kellett is a multi-strategy private investment firm focused on global value, special situations and opportunistic investing. The firm has approximately 100 employees with offices in New York, Hong Kong, London, and Mumbai. The firm currently has in excess of $6 billion in assets under management.

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