A fight for control of Toronto-based Detour Gold Corp. is heating up, as one of the company’s largest shareholders on Wednesday threatened to replace the board of directors on the same day management released a new plan for its flagship mine.
The battle pits one of the world’s best-known hedge funds, Paulson & Co. — led by billionaire John Paulson, who was portrayed in The Big Short as making a prescient bet against the U.S. housing market a decade ago — against the board of Detour, which operates one of the world’s largest gold mines in northeastern Ontario.
The Paulson & Co. statement called Detour’s board “entrenched” for ignoring purchase offers amid a slumping stock price. Detour’s stock on Thursday afternoon was trading at $11.88, about 33 per cent off its 52-week high.
“We are extremely disappointed with this entrenchment, which leaves us with no choice but to explore replacing the board,” the statement said.
Last week, the hedge fund sent a letter to the board of directors (obtained by the Financial Post and first reported on by Bloomberg News) that stated, “Numerous gold companies have told us they would be interested in (buying) Detour.”