Livermore Expresses Frustration with Status
Quo; Support for Wholesale Board Change
NORTHBROOK, IL, Nov. 16, 2018 /CNW/ - Livermore Partners
("Livermore"), a private investment firm and investment manager to
a shareholder of Detour Gold Corporation ("Detour"), today
commented on the lack of engagement by the board of directors of
Detour, Detour's disappointing Q3 results and the pressing need for
wholesale change at the board of Detour.
Over the course of the last month Livermore has attempted to
engage with the board constructively to discuss the serious issues
confronting Detour. Livermore has in particular repeatedly
urged the board to abandon its strategy of "delay, divert and
distract" and to engage with Paulson & Co. Inc. ("Paulson") and
Detour's other shareholders as responsible corporate stewards
rather than self-interested managers. To our dismay, that has
not occurred. Instead, this board, seemingly more entrenched
than ever, continues to do all it can to avoid tackling the real
and very serious issues confronting Detour.
It is shocking (at least to Livermore – Detour's other
shareholders may be resigned to this sort of indifference) that
despite all that has occurred at Detour over the last month, the
board has refused to engage with Livermore (and apparently Paulson
too) in any constructive manner and has instead limited its
shareholder engagement to (i) attempting to put a cheery spin on
objectively disappointing Q3 numbers and (ii) disseminating proxy
materials that, while implicitly acknowledging the legitimacy and
gravity of Paulson's concerns, advocate for only a topical and
incomplete remedy.
Detour's proposal to nominate two of Paulson's nominees while
leaving in place Chief Executive Officer Michael Kenyon and Chairman Alex Morrison is simply another instance of
Detour feigning the appearance of change in an effort to persuade
shareholders to retain the incumbent clubby core of directors (who,
we note, will continue to earn generous salaries during this
period), while doing nothing to address the failing of the
incumbent board to enhance, or even preserve, shareholder
value. This will not suffice. Messrs. Kenyon and
Morrison have presided over the ongoing destruction of shareholder
value in senior leadership roles and must be removed in order for
any meaningful change to occur. Despite repeated assurances
that Detour has a plan that is working, the stock price remains
artificially depressed and operational results are dismal. A
complete overhaul of the board is required.
The Detour Lake Gold Mine is a world class asset burdened with
poor management, excessive executive compensation and ineffective
and conflicted oversight. After extensive review and
analysis, Livermore is of the view that at current spot prices
Detour would receive an approximate 80% appreciation in value under
capable management with appropriate governance in
place. The existing leadership of Detour has already
demonstrated that they are incapable of identifying, let alone
realizing, this upside. Wholesale board change is a necessary
first step in unlocking this substantial stranded value.
Livermore therefore once again urges the board to abandon its
current posture of self-interested entrenchment and accept that
they are no longer the right team to lead Detour. In an effort to
preserve their generous salaries and to "win" at all costs, this
board has lost sight of the fact that their job is to advance the
interests of the shareholders. In the present circumstances,
a "win" by the existing board will mean that all of us shareholders
continue to lose. That outcome is not acceptable to Livermore and
we will continue to advocate on behalf of the forgotten
shareholders of Detour.
About Livermore Partners
Livermore Partners is an
alternative asset investment manager servicing high-net worth
individuals, institutional investors, and private-equity sponsors
based in Northbrook, Illinois. We
invest using a deep-value opportunistic approach and work
diligently to help extract value in portfolio companies. For more
information, please visit: www.livermorepartners.com.
Additional Information
Livermore is not acting
jointly and in concert with any other party in disseminating this
press release. The views expressed in this press release are
those of Livermore alone, should not be attributed to any other
person, and were formed based solely on Livermore's analysis of
publicly available information. The information contained in this
news release does not and is not meant to constitute a solicitation
of a proxy within the meaning of applicable corporate or securities
laws. Notwithstanding the foregoing, Livermore is voluntarily
providing the disclosure required under subsection 9.2(4) of
National Instrument 51-102 – Continuous Disclosure Obligations in
accordance with securities laws applicable to public broadcast
solicitations. Any solicitation made by Livermore will be made by
it and not by or on behalf of the management of Detour. All costs
incurred for any solicitation will be borne by Livermore. Proxies
may be solicited by Livermore pursuant to an information circular
sent to shareholders after which solicitations may be made by or on
behalf of Livermore by mail, telephone, fax, email or other
electronic means as well as by newspaper or other media
advertising, and in person by directors, officers and employees of
Livermore, who will not be specifically remunerated therefor.
Livermore may also solicit proxies in reliance upon the public
broadcast exemption to the solicitation requirements under
applicable Canadian corporate and securities laws, including
through press releases, speeches or publications, and by any other
manner permitted under applicable Canadian laws. Livermore may
engage the services of one or more agents and authorize other
persons to assist in soliciting proxies on its behalf, which agents
would receive customary fees for such services. If Livermore
commences any solicitation of proxies, proxies may be revoked by an
instrument in writing by a shareholder giving the proxy or by its
duly authorized officer or attorney, or in any other manner
permitted by law and the articles or by-laws of Detour. None of
Livermore nor, to its knowledge, any of its associates or
affiliates, has any material interest, direct or indirect: (i) in
any transaction since the beginning of Detour's most recently
completed financial year or in any proposed transaction that has
materially affected or would materially affect Detour or any of its
subsidiaries; or (ii) by way of beneficial ownership of securities
or otherwise, in any matter proposed to be acted on by Detour.
Detour's principal office address is Commerce Court West, 199 Bay
Street, Suite 4100, Box#121, Toronto,
ON M5L 1E2, Canada.
SOURCE Livermore Partners