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RCF Management LLC, one of Iamgold Corp.’s IMG-T biggest shareholders, is pushing for a revamp of its board of directors, saying the Canadian gold company is poorly managed and in need of an urgent fix.

Denver-based RCF said in an open letter that “immediate leadership change is required to address massive value destruction and chronic underperformance plaguing Iamgold.” It is proposing the replacement of three directors, after earlier leading a charge to successfully oust the company’s chairman.

Toronto-based Iamgold has been a long-time underperformer in the Canadian gold sector.

It is in the midst of building a new multibillion-dollar gold mine in Canada, called Côté, which has experienced several significant cost overruns. Its stock has also traded at a discount to peers owing to its exposure to politically unstable Burkina Faso, where just last week a military coup occurred. Iamgold’s Westwood in Quebec has also dealt with seismic issues in the past that have affected production.

Iamgold is in “urgent need of an operational turnaround,” RCF said.

The private-equity firm wants to replace current board members Ronald Gagel, Richard Hall and Timothy Snider, with Maryse Belanger, director with Equinox Gold Corp., David Smith, director with Hudbay Minerals Inc., and Lawrence Haber, commissioner with the Ontario Securities Commission.

Iamgold has already seen major upheaval in its executive and board ranks in the past few weeks with its chief executive officer Gordon Stothart, leaving with no reason given, and its chairman suddenly retiring on Sunday.

RCF, which acquired a 5.2-per-cent stake in Iamgold in December, had been discussing board and operational changes behind the scenes with the company for several weeks.

According to Robin Bienenstock, investment committee member with Resource Capital Fund VII, RCF’s concerns were raised early on after it became clear in meetings that Iamgold’s then-CEO Mr. Stothart and chief financial officer Daniella Dimitrov had disagreements over core operations. These included whether the Westwood mine should be sold.

After unsuccessfully reaching out for a meeting with board chair Donald Charter, Ms. Bienenstock said that Mr. Stothart was let go with no warning.

“This is not [proper] succession planning,” she said.

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Subsequently, RCF met with Mr. Charter and told him that after conversations with many other shareholders the feeling was that he should step down. In fact, RCF and Iamgold were close to an agreement that would have seen Mr. Charter and two other board members leave. But over the weekend talks broke down, and the company then announced that Mr. Charter was retiring.

“Subsequent to that, it just became chaos in there,” Ms. Bienenstock said of Iamgold’s boardroom.

Iamgold challenges that narrative.

Graeme Jennings, vice-president, investor relations with Iamgold wrote in an e-mail to The Globe and Mail that the company engaged in good faith with RCF, and agreed to almost all of its demands. Mr. Jennings said certain other demands that RCF insisted upon “raised serious concerns,” such as its insistence that its nominee for chair, Ms. Belanger, be appointed without meeting existing directors, and mandating that Iamgold pay it $1-million to cover meeting costs.

“That is completely and utterly false and misleading,” Ms. Bienenstock said.

She said the $1-million figure would be the maximum that Iamgold would be required to pay for all expenses related to a settlement, including legal fees and payments made to proxy advisory firms. She said RCF did not object to a meeting with Ms. Belanger.

A few years ago, a shareholder revolt at another Canadian gold company, Detour Gold Corp., resulted in widescale change at the board level, and the eventual sale of Detour to a bigger competitor.

But RCF says a quick sale of Iamgold is not the objective and Ms. Bienenstock called Côté a “wonderful” project.

RCF specializes in taking large stakes in a few select mining investments.

It has a mixed record of investing in Canada. RCF was a long-time shareholder and debt holder in Ring of Fire development company Noront Resources Ltd. but sold its position when the stock was trading at multiyear lows. After it exited its position, shares in Noront subsequently soared after a bidding war broke out between the buyer of RCF’s stake, and BHP, the world’s biggest mining company.

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