Detour Gold focused on mine plan after Q2 results
Detour Gold Corp. [DGC-TSX], a company that is facing pressure from an activist investor to make changes at the board level, has released its operational and financial results for the second quarter of 2018, while reaffirming its 2018 production guidance.
The company has been under pressure to make board changes following the recent resignation of former Detour CEO Paul Martin, and increased calls by some investors for a strategic review. That includes Paulson & Co, with a reported 5% stake, which said last week it would urge Detour Gold to call a special shareholder meeting to replace a majority of Detour’s board with independent members committed to exploring a potential sale of the company.
Paulson said it would request that the shareholder meeting be held no later than September 28, 2018.
In a July 20, 2018 news release, the company said it is searching for two board replacements to bolster its large scale open pit operating and First Nations expertise.
Detour Gold is an intermediate gold producer in Canada. It operates the large-scale Detour Lake mine in northern Ontario about 300 km northeast of Timmins.
In a statement released after the close of trading on July 25, 2018,the company’s interim CEO Michael Kenyon said, “We remain focused on our top priority: the execution of our 2018 life-of-mine plan. We are providing the stability and support needed four our COO, Frazer Bourchier, to succeed in optimizing the Detour Lake operation. The initiatives underway clearly demonstrate that we are on the right track to ensure that the Detour Lake operation becomes a consistently profitable operation. We will build on this foundation by enhancing our board. As previously announced we intend to appoint two new directors with operational and/or corporate responsibility experience in the near term to replace existing board members. We remain firm in our belief that the actions we are taking will deliver long-term value to our shareholders.”
Meanwhile, the company has reported second quarter net earnings of $8.8 million ($0.05 per basic share) and adjusted net earnings of $21.3 million ($0.12 per basic share).
The company said it is on track to meet its production guidance after producing 154,385 ounces of gold in the second quarter. Total cash costs in the quarter were $723/oz sold, bringing all-in sustaining costs to $1,104/oz.
The company said cash and cash equivalents stood at $150.3 million at June 30, 2018 following the repayment of $10 million of debt.
Detour has said it expects to produce between 595,000 and 635,000 ounces of gold this year.
Investors reacted to the news by sending Detour Gold shares down 0.54% or $0.07 to $12.96 on Thursday July 26.