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A war of words has broken out between Detour Gold Corp. and Paulson & Co., with the Canadian miner accusing the New York-based hedge fund of making misleading statements about it – and potentially breaking securities laws.

In a press release on Wednesday, Paulson said that Detour has been approached by a “major mining company” interested in buying it. According to Paulson, Detour’s chief executive officer Michael Kenyon wrote to the hedge fund, saying the junior miner had been approached by a potential acquirer, but that Detour would only sign a confidentiality agreement if both the company and Paulson agreed not to push for an overhaul of the board of directors. Paulson said it has no connection with the company in question.

“Statements made by Paulson in its press release are simply false and mislead the market,” Detour wrote in a subsequent release of its own on Wednesday. “It is in fact Paulson’s own actions that led them to come into possession of material non-public information from another party.”

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Detour also said it it has made a complaint to the Ontario Securities Commission (OSC) about the alleged misleading statements, and said it believes Paulson’s actions constitute “serious misconduct under securities laws.”

Shares in Detour rose by 11.8 per cent to close at $13.70 Wednesday on the Toronto Stock Exchange, with the surge in the stock coming after Paulson put out its release.

Paulson, which owns about 5.5 per cent of Detour, also said it is pressing ahead with its efforts for an overhaul of Detour’s board of directors, with the ultimate objective of putting the struggling junior up for sale.

Last week, Paulson said it was considering forcing a shareholder vote to replace Detour’s existing board after the gold producer said its best option was proceeding with a costly mine expansion rather than putting the company up for sale.

Since Paulson owns more than a 5-per-cent stake in Detour, it can call for a special meeting that would see shareholders vote on a board overhaul. To date, Paulson has not submitted a formal request for such a meeting, but in an e-mail to The Globe and Mail, Marcelo Kim, partner with Paulson, said it will be making the request shortly.

Last month, Mr. Kenyon said Detour will consider any “bona fide" takeover offers, but stopped short of declaring an outright sale process. In an interview with The Globe, Mr. Kenyon said one of the risks of putting a for-sale sign on the company is that if the process is a failure, Detour could suffer long-term damage to its share price.

In its release on Wednesday, Detour said that Paulson has been running “an aggressive and self-serving agitation campaign” against the firm, “with the sole objective of bullying the company into an ill-timed fire sale.”

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Detour also said that Paulson, which has seen its assets under management fall significantly from its peak of US$38-billion in 2011 to around US$9-billion now, is in a “desperate attempt to resuscitate its flailing reputation.”

Detour’s flagship Detour Lake mine in northern Ontario has been plagued by operational problems over the past few years. Much to the chagrin of investors, executives have changed the life-of-mine plan on the property multiple times. The latest plan predicts materially higher costs than expected. Still, despite the setbacks, Detour Lake is coveted, and analysts expect the company to attract bidders, especially if a formal sale process is declared. Detour Lake holds 23 years of reserves, which is double the industry average. The mine went into production in 2013 and is one of Canada’s biggest gold mines.

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