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The interim chief executive officer of Detour Gold Corp. is firing back at dissident shareholder Paulson & Co. and insisting that remaining as a standalone, and not selling the company, is in the best interests of shareholders.

“[A sale] may benefit Mr. Paulson, but the shareholders I talked to aren’t interested,“ Michael Kenyon said in an interview.

“We have lots of shareholders. The ones I talk to are interested in the life of mine execution. They see the value in developing a 16-million-ounce resource.”

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Mr. Kenyon said he’s spoken to most of the company’s top shareholders and the “vast majority” are supportive of the plan to forge ahead with a costly expansion of its flagship mine in Northern Ontario.

In April, shares in the company plunged 30 per cent in a single session, after it announced the expansion of its Detour Lake gold mine would entail materially higher costs than expected. Detour also revealed it is having trouble securing mine permits after failing to get approval from a First Nations stakeholder. Last month, New York-based Paulson & Co., which owns 5.5 per cent of the shares, pleaded with Detour to sell itself, after years of underperformance.

Last month, Marcelo Kim, partner with Paulson & Co., told The Globe and Mail that a failure to initiate an official sales process is an indication of an “entrenched board looking out for its own interests, and not those of its shareholders.”

Mr. Kenyon scoffed at suggestions the board was entrenched, saying there has been plenty of director turnover at Detour since it went public in 2007. He also said its existing slate of directors is open to selling the company, and that its board members have collectively experienced 16 mergers and acquisitions (M&A) transactions in their careers while serving at other mining companies.

“There’s been no shyness about getting the best deal for the shareholders and having those directors lose their jobs in the process,” Mr. Kenyon said. “You don’t have to hang a ‘for sale’ sign on your door in order to talk to your peers.

“The doors are always open. So if any mining company wants to come in and talk to us, we’ve never been shy about doing that.”

Mr. Kenyon said that the big risk in declaring an official sales process is that if the process is a failure, the company’s share price may suffer long term damage as a result. He also expressed concern about selling the company in a depressed M&A market with its stock trading at a low valuation. He declined to comment on whether the company had received any takeover offers in the past few months.

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Last month, Mr. Kim said that Paulson & Co. was considering calling for a shareholder vote to try to toss out the existing slate of directors and nominate a board of its choosing, which would then push for a sale of the company. As a holder of more than 5 per cent of the shares, Paulson & Co. can legally request a shareholder vote on the matter.

“We are continuing to consider all of our options to replace the board with one that is shareholder friendly and will drive real value for all stakeholders,” Mr. Kim wrote in an e-mail to The Globe on Tuesday.

Detour Lake mine is considered a coveted asset with 23 years of reserves, which is double the industry average and located in one of the most stable and mining friendly jurisdictions on Earth. It went into production in 2013 and is one of Canada’s biggest gold mines. Detour expects production averaging 614,000 ounces annually over the next 12 years, and 725,000 ounces a year for the remainder of the mine’s life cycle. The company has encountered multiple operational stumbles over the past few years and updated its mine plan on multiple occasions to the chagrin of its shareholders. Last month, the company said that mining costs over the life of the mine will be 10 per cent higher than predicted in a similar update in 2017.

Paulson & Co. isn’t the only party agitating for a sale of Detour.

“The time for a takeover is now,” RBC Dominion Securities analyst Dan Rollins wrote in a recent note.

“We believe the disappointing share price performance and investor frustration (multiple mine plans, challenged operational execution and permitting delays) provide the right environment for Detour to be put in play.”

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