Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Institutional Shareholder Services Inc (ISS) has advised shareholders to vote for Detour Gold Corp’s refreshed board of directors at an upcoming special shareholders’ meeting, stopping short of more aggressive changes demanded by activist investor Paulson & Co, the company said on Monday.
Detour’s existing management has been resisting Paulson’s call for a complete overall of the board and immediate dismissal of interim Chief Executive Officer Michael Kenyon and board member Alex Morrison.
Kenyon, who has agreed to step aside, will continue to head the company until a permanent replacement is found.
The Canadian miner’s proposals for the shareholders’ meeting on Dec. 11 include approval of two Paulson nominees for the board but stop short of the six to eight changes the hedge fund has called for.
ISS said appointing a temporary replacement for Kenyon at this stage could potentially delay the search for a permanent CEO.
Paulson, which has a stake of about 6 percent in the miner, responding to the ISS report, said it did not believe ISS had gone far enough in its recommendation.
Detour is under pressure from two other investors, investment company Coast Capital Management L.P.and hedge fund Livermore Partners, to overhaul its board and consider a sale.
(By Debroop Roy; Editing by Shinjini Ganguli)
