Detour Gold to replace two existing directors soon
2018-07-20 08:09 ET - News Release
Mr. Ian Robertson reports
DETOUR GOLD ANNOUNCES NEXT STEPS TO BUILD ON FOUNDATION OF 2018 LIFE OF MINE PLAN
Following the release of its updated life-of-mine plan, Detour Gold Corp. has provided the next steps in its continuing plan to grow long-term shareholder value. While the board of directors is determinedly focused on operational excellence, it recognizes the need for the company's strategy to continue to evolve.
"In taking these next steps on our path to long-term value creation we are demonstrating our intensified commitment to optimizing the Detour Lake operation," said Alex Morrison, chairman. "As we indicated in our June 27 news release, the company remains focused on the implementation of the 2018 LOM plan. We are committed to improving upon Detour Lake's past operational performance by making the changes needed to ensure it becomes a consistently profitable operation and giving our new chief operating officer, Frazer Bourchier, the time and support he needs to execute. Further enhancing our board with additional operational expertise and providing shareholders with background on our special committee demonstrates that the board has always been, and remains, committed to creating long-term value for all shareholders."
Enhanced board expertise: operations and corporate social responsibility
The board maintains a skills matrix of the expertise required by Detour Gold, against which it measures the composition of the board on a continuing basis. In early 2018, the corporate governance and nominating committee concluded that the composition of the board would be enhanced with the addition of members possessing operational expertise in large-scale open-pit mining and experience in corporate social responsibility, including first nations engagement. The board agreed with this recommendation and a search for such candidates commenced in the spring. As the result of these efforts, the company anticipates announcing two new directors to replace existing board members in the near term.
Background on special committee
The release of the 2018 LOM plan has provided the company with a strong foundation for future success. Detour Gold has gone through a significant evolution since its inception, from an exploration stage company to a mine builder, and now to an established mine operator.
Over that time period and transition, the company has had in place a special committee which has a history of responsibly evaluating potential value creating opportunities. While the company remains firm in its belief that a public auction of the company at this time is not in the best interests of shareholders, it is providing disclosure about this committee in response to shareholder interest and as an indication that the board has always been willing to explore alternatives that compete with the value delivered by the company's stand-alone plan. Over the years, the special committee has been active as required and, whenever the company was approached, approved the signing of confidentiality agreements and considered various strategic alternatives. During those periods, no offers to purchase the company's shares emerged.
Today, the focus of the special committee is to help further define the strategic direction of the company as an operating, single asset mining company. While implementation of the 2018 LOM plan remains the company's priority, the special committee will continue to responsibly review and evaluate various other strategic avenues for the company to generate long-term shareholder value, just as it has done in the past. Such avenues may include acquisitions, mergers, joint ventures, sale of the company, strategic investments and capital raising as needed to support a particular strategic initiative.
Update on chief executive officer search
While Michael Kenyon's role is transitional, the board continues to believe that the combination of Mr. Kenyon as interim CEO and Frazer Bourchier as the new chief operating officer is the most stable solution in the near term to allow the company to focus on operational improvements. As the 2018 LOM plan rolls out under the leadership of Mr. Bourchier and as the company stabilizes from the market interference activity of Paulson & Co., the board will conduct a skills and needs search for the ideal candidate to take the company into its next chapter.
Advisers
The company has retained Kingsdale Advisors as strategic shareholder and communications adviser, BMO Capital Markets as financial adviser, and McCarthy Tetrault LLP and Norton Rose Fulbright LLP as its legal advisers.