Activist investor John Paulson’s hedge fund on Thursday nominated eight members to Detour Gold Corp’s board and reiterated its call for a special shareholder meeting, ratcheting up pressure on the gold miner.
The hedge fund, Paulson & Co, which owns about 5.4 percent of Detour, had threatened to replace the company’s board if it did not successfully explore strategic alternatives including a sale and the appointment of a new chief executive officer.
“Paulson is not advocating for a fire sale, but rather a comprehensive review of all alternatives, including a sale,” the hedge fund said in a statement.
Paulson also requested Detour to call for a special shareholder meeting by September 28 to choose between its slate of nominees and the current board.
The hedge fund’s eight nominees include a former executive of Newmont Mining Corp, a partner at Paulson & Co and the CEO of Gold Bullion International LLC.
Toronto-based Detour Gold said later on Thursday its board had received Paulson’s request and would respond in due course after a review.
It also said “blindly following an agenda to sell the company” would ignore the opportunities present through its life of mine plan, which seeks to turn around the company.
Paulson’s statement comes a week after the parties engaged in a heated public exchange over Detour’s failure to publicly disclose a buyout offer for the company. Detour Gold also said it had asked the Ontario Securities Commission to investigate the hedge fund, accusing it of “concerning and unlawful behavior” for putting out a public statement disclosing the offer for Detour from a gold miner.
Paulson said on Thursday it received the statement of claim issued by Detour Gold in the Ontario Superior Court, but said “facts in the statement are incorrect, and there is absolutely no merit to any of Detour Gold’s allegations.”
(Reporting by Anirban Paul in Bengaluru; Editing by Anil D’Silva)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)