Paulson plans to replace Detour board, explore sale of company

By Michael Allan McCrae

Paulson & Co. will move forward with its efforts to replace a majority of the Detour Gold’s board and explore the possible sale of company.

In a letter release today, Paulson also said Detour had been “approached by a major gold mining company interested in potentially acquiring it.”

Detour Gold is up 13% to $13.93. The company’s 52-week range is $9.11 to $17.86.

Detour Gold (TSX:DGC), an intermediate gold producer with an open pit mine in northeastern Ontario, has clashed with the billionaire hedge-fund manager. Last month Paulson sent a letter to the company asking it to put itself up for sale. Paulson criticized management and poor stock performance.

In today’s letter Paulson took issue with how Detour handled a major interested in acquiring the company.

Last Friday Michael Kenyon, Interim CEO of Detour Gold, sent an unsolicited written communication to Paulson selectively disclosing non-public information that the Company has been approached by a major gold mining company interested in potentially acquiring it. As part of the communication, Detour Gold stated it would only sign a confidentiality agreement with the interested party only if both the party and Paulson agreed to a stand-still, even though Paulson has no affiliation with the major mining company. In light of such approach, Paulson requested that the Company’s board immediately disclose such material to all shareholders and the investing public and announce a formal process to evaluate all strategic opportunities. In addition, Paulson & Co. has constructively asked the independent directors of the board to reconstitute the board and to announce a search process for a new CEO simultaneous with a review of strategic alternatives. To date, the Detour Gold board has failed to do so, therefore Paulson is issuing this press release so that all Company shareholders and the wider public have the same information as Paulson.

Detour told Bloomberg it has no comment on the matter.

Creative Commons image of open pit mine courtesy of Mines CERSE

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From:: Mining.com