Detour board member Jim Gowans
Detour Gold – the operator of Canada’s largest gold mine – has postponed its planned special shareholders meeting by two days, after initial results suggest that a bloc of shareholders has sided with Paulson & Co and that the US hedge fund manager will take control of the board.
The special shareholders meeting has been postponed to Thursday, 10:00 Toronto time, the TSX-listed miner said, explaining that the extension was meant to allow shareholders an opportunity to make an informed choice.
Detour board member James Gowans said in a statement on Monday that preliminary results indicate that vote dispersion, coupled with a significant shareholding bloc voting with Paulson, would lead to a change of control of Detour board of directors.
“This result would be inconsistent with the intentions expressed to Detour Gold by the vast majority of shareholders we have spoken with,” he said, noting that shareholders could still seek to change their votes.
A group holding about 24% of Detour’s shares have voted for the removal of all Detour’s eight board members named in Paulson’s requisition. This group consists of a small number of shareholders, but they have a substantial voting bloc, the miner said.
“The company is concerned that had shareholders been aware of this group they may have voted differently.”
While not all Paulson’s nominees had achieved sufficient votes to be elected to the board, Detour noted that, should Paulson obtain a majority of the board, it would have the ability to appoint board members or other individual as directors at its discretion.
Last week, independent proxy adviser Glass Lewis and hedge fund Livermore Partners joined Paulson’s call for changes to the board of Detour. Glass Lewis recommended replacing Detour chairperson Alex Morrison and two other members with Paulson nominees, while Livermore affirmed its call for an overhaul of the board.
Paulson and other investors feel Detour directors have failed to recruit a management team that can realise the inherent value of the Detour Lake mine. Paulson wants CEO Michael Kenyon to be immediately sacked, although the Detour board has said it will only start a CEO recruitment process once the proxy battle ends.
Detour traded 3.6% higher at C$10.72 a share on Monday.