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.
Nov 29 (Reuters) – Detour Gold Corp said on Thursday Chief Executive Officer Michael Kenyon will head the company until it finds a permanent replacement, pushing back against hedge fund Paulson & Co’s demand to immediately replace him.
Paulson & Co, which has a stake of about 6 percent in the miner, has pushed for Kenyon’s resignation, saying the company had “unsuccessfully tried to boost short-term performance” including “questionably running up its accounts payable to exaggerate cash flows”.
In a letter to shareholders on Thursday signed by Chairman Alex Morrison and other directors, Detour said it had “tried hard to settle with Paulson,” but was unable to reach an agreement.
The miner also recommended appointing two of Paulson’s nominees, Steven Feldman and Christopher Robison, to its board, saying they have the backing of two of its largest shareholders
The company did not disclose the names of the shareholders.
Detour is under pressure from two other investors, hedge fund Livermore Partners and investment company Coast Capital Management L.P., to overhaul its board and consider a sale.
Shareholders have until Dec. 7 to vote on nominees.
(Reporting by Shanti S Nair in Bengaluru)
