Record Date for Special Meeting Triggers Need for Information
NEW YORK, Nov. 09, 2018 (GLOBE NEWSWIRE) -- Paulson & Co. Inc. (“Paulson”), one of the largest, long-term shareholders in Detour Gold Corporation (TSX: DGC) ("Detour Gold" or the "Company”), today released a list of questions it believes the Company should address in the circular it files for the upcoming Special Meeting. Today is the Record Date for the meeting. These questions are intended to ensure the Company is transparent in providing shareholders with information fundamental to evaluating the responsibility of the Board for Detour Gold’s failed performance.
Since requisitioning the meeting, Paulson has continuously tried to engage with the Company on setting fair procedures for the December 11 Special Meeting and releasing important information for shareholders to consider before they vote for directors. Contrary to good governance principles and their duty to shareholders, the Company and its advisers have not substantively responded to any of those requests. Given the Company’s silence, and as the Record Date is now here, Paulson has no choice but to publicly raise these questions and demand that the Company address the following questions in its proxy circular:
- Paulson commits that, if there is a settlement to this proxy contest, all terms of any settlement including all corporate governance arrangements will be publicly released to shareholders. Will the Company similarly commit? If not, why not?
- Does the Board accept that it is responsible for the Company’s poor performance? Since Paulson launched the campaign to replace the Board, the Company has changed some directors but has left a core group who has held leadership roles for nearly 10 years in place and who had primary responsibility for oversight of the development and execution of the Company’s Life of Mine plans. Does the Company not accept that the core group, including the Chair, Alex Morrison, and the Interim CEO, Michael Kenyon, are responsible for the destruction of shareholder value?
- Why does the Company refuse to adhere to best practices for disclosure of material information? This year alone, the Company released revisions to the prior Life of Mine (LOM) plan days before the AGM voting deadline, never filed a 43-101 Technical Report despite filing a material change report, selectively disclosed information to one shareholder about its dealings with another gold company, and refused to provide any information on the interim CEO Michael Kenyon’s employment agreement and severance terms.
- Paulson and other shareholders have long-suspected that the disclosure of the 2018 LOM plan was deliberately delayed until after the deadline shareholders had for voting at this year’s AGM. This appears to be supported by a disturbing allegation made by a Whistleblower to the Ontario Securities Commission, and copied to Paulson (posted to shareholdersfordetour.com), to the Company and to another shareholder that has publicly criticized the Board. This complaint if only partially true, confirms that there are compelling reasons to doubt that the Company’s Board has exercised its fiduciary duties to shareholders. Among the allegations (which have not been proven), the Whistleblower indicates that the new LOM plan was made known to management as early as February, with the Company waiting until April 27 to disclose it. The complaint also alleges an insider traded with this material non-public information in March. Why did the Company wait until April 27 to release the 2018 LOM Plan details despite management having this information well before that? Will the Company respond to the allegations and inform shareholders of the findings of any investigation it conducts?
- Did Company insiders deliver notices of the intention to exercise options due to expire on June 20 before June 20 when the stock was trading below the strike price? If not, what was the Company’s basis for maintaining that the options did not expire on June 20?
- Paulson commits not to engage in vote-buying and for months has asked the Company in numerous private letters to do the same. Now we are asking the question publicly: will the Company commit likewise, given their own proxy solicitor’s public recommendation that such practice be banned in proxy contests (https://www.newswire.ca/news-releases/kingsdale-advisors-releases-csa-submission-on-vote-buying-recommends-ban-for-proxy-contests-685833352.html. If not, why not?
- Paulson has sent the Company a draft form of proxy weeks in advance of the record date in an effort to ensure that the Company acts fairly in reviewing all shareholders’ votes. Will the Company agree to a single, straightforward “universal” proxy card for the meeting? If not, why not?
- Why has the Board hired two teams of legal advisors from different firms and what are their respective roles? Why did the Board engage an investment bank on this matter if it is not interested in actively considering strategic alternatives?
- What have been the Company’s total costs of engaging two law firms, one investment bank, and proxy advisors in the Board’s fight against its own shareholders?
- Why is the Company continuing malicious and false litigation against Paulson that will ultimately be dismissed? How is this expense a good use of Detour Gold’s corporate resources?
Attempts to deprive shareholders of their most fundamental right to vote for directors with full information only proves that the Board is more interested in entrenching itself than fulfilling their duties to the Company and acting for the benefit of shareholders. Shareholders are encouraged to demand that the Company answer these and other important questions in its circular, which should be filed imminently.
The Company will soon issue its circular and proxy. Shareholders should review the circular with a critical eye and assess whether the Company has addressed these important questions. If the Company does not, then shareholders should destroy the Company’s proxy form. Real change will only come about through a wholesale replacement of the Board. Paulson will soon file its own materials and proxy and shareholders will finally have a chance to vote for real change and for its slate of new, highly qualified directors.
About Paulson & Co. Inc.
Paulson is one of Detour Gold’s largest investors, exercising control or direction over 5% of Detour Gold’s shares. Having first invested in the Company nine years ago, Paulson previously provided C$280 million in direct equity and US$250 million in convertible notes to finance its mine completion. Paulson, along with several other major shareholders in the Company, has grown increasingly frustrated by the Company’s inability to appropriately manage shareholders’ assets, having destroyed billions of dollars of value in the process.
Paulson, founded in 1994, is an investment management firm with offices located in New York, London and Dublin.
Contact Details
Investors:
MacKenzie Partners, Inc.
Dan Burch & Jeanne Carr
800-322-2885
212-929-5500
Email: Detourproxy@mackenziepartners.com
Media:
Longview Communications & Public Affairs
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