December 6, 2018 / 5:01 AM / 4 days ago

UPDATE 1-Glass Lewis, Livermore back Paulson's Detour Gold proxy fight

(Adds Livermore’s statement)

Dec 5 (Reuters) - Independent proxy adviser Glass Lewis and hedge fund Livermore Partners on Wednesday joined activist investor Paulson & Co’s call to make changes to the board of Canadian miner Detour Gold Corp.

Glass Lewis recommended replacing Detour Chairman Alex Morrison and two other board members with Paulson nominees, while Livermore affirmed its call for an overhaul of the board.

Livermore also confirmed its intention to vote in favor of Paulson’s nominees.

Detour’s management has been resisting Paulson’s push for a board shakeup and the immediate dismissal of interim Chief Executive Officer Michael Kenyon and Morrison. Paulson has an about 6 percent stake in Detour.

“We ultimately see validity in Paulson’s central thesis that, for substantive change to take hold at the company, certain of the core and long-term directors who have presided over value destruction and overseen technical failures of prior mine plans need to be replaced,” Glass Lewis said.

“The best thing that could happen to Detour would be the complete termination of all involvement with Messrs. Kenyon and Morrison,” Livermore said in a statement.

Livermore earlier called for an overhaul of the board at Detour and a strategic review.

Detour Gold directors have been unable to recruit a management team that has proven capable of realizing the inherent value of its Detour Lake mine, despite commercial production starting more than five years ago, Livermore said.

Glass Lewis recommended naming former Kirkland Lake Gold Inc executive Dawn Whittaker as chairman of Detour. However, it said it had no issues with Kenyon running the company on an interim basis as long as the miner was looking for a permanent replacement.

Hedge fund Paulson on Nov. 15 called for the immediate resignation of Kenyon and Morrison, adding it did not favor a fire sale of the gold miner.

Detour’s proposals for a shareholder meeting on Dec. 11 include approval of two Paulson nominees to the board.

Institutional Shareholder Services Inc on Monday advised shareholders to vote for Detour’s nominees. (Reporting By Aparajita Saxena and Laharee Chatterjee and Shubham Kalia in Bengaluru; Editing by Anil D’Silva and Gopakumar Warrier)

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