{{Infobox company | name = Detour Gold Corporation | logo = Detour Gold Logo.svg | logo_size = 220px | type = Public<br />TSX:DGC<br />OTCX:DRGDF | hq_location = | hq_location_city = Toronto, Ontario | hq_location_country = Canada | founded = {{Start date|2006|08|22}} | fate = Acquired by Kirkland Lake Gold | defunct = {{End date|2020|01|07}} | industry = Gold mining | products = Gold | key_people = Gerald Panneton, CEO (2006-13),<br>Paul Martin, CEO (2013-18),<br>Michael Kenyon, CEO (2018),<br>Mick McMullen, CEO (2019-20) | homepage = {{URL|www.detourgold.com}} }}
'''Detour Gold Corporation''' is a former Canadian gold mining company, between 2006 and 2020, that owned and operated the Detour Lake Mine in the Abitibi gold belt of northeastern Ontario. Located northeast of Timmins and Cochrane, Ontario, near the Quebec border, the mine was operated by Placer Dome between 1983 and 1999, recovering 1.8 million ounces of gold in that time, and maintained as an exploration property by Pelangio Mines Inc. until 2006 when a group of investors formed the Detour Gold Corporation to develop a new mine. An initial public offering on the Toronto Stock Exchange on January 31, 2007, as well as several subsequent offerings, raised sufficient funds to develop the mine, so that it began production in 2013. Its low grade concentrations necessitated an open pit mine with cyanidation and carbon in pulp processing. Between 2014 and 2019 the mine produced between 500,000 and 600,000 ounces of gold each year. In 2020, following a proxy fight with activist shareholder Paulson & Co., the mine and the company were acquired by Kirkland Lake Gold in an all-stock purchase totaling $4.9 billion.
==History== The Detour Gold Corporation was founded in an asset purchase agreement announced on August 21, 2006, by a group of investors and mining experts led by Gerald Panneton. With the assistance of Vancouver-based mining management company Hunter Dickinson Incorporated, Detour Gold Corporation was created as a new company to own and develop the Detour Lake mining property.<ref>{{cite news |title=Pelangio to sell gold project to Hunter Dickinson |newspaper=The Globe and Mail |date=August 23, 2006 |page=B8}}</ref> Pelangio Mines Inc. was given $5 million from the investors plus half of the shares issued during the new company's initial public offering (IPO), estimated at the time to be a total compensation of $65 million, though it was raised to $70 million as the 40 million IPO shares were adjusted from $3 to $3.50 before their release. The funds generated from the remaining 50% of the January 31, 2007, initial public offering was used to pay for further exploration of the property.
By December 2007 the initial results had increased the known reserves to 4.8 million ounces. Also, by that time, the share price had risen to $11.65. By February 2008 it had 7.8 million ounces of gold and a share price of $16.30.<ref>{{cite journal |title=Detour Gold Corporation - Driving to production decision |last=Stewart |first=Nick |journal=Northern Ontario Business |date=February 2008 |issue=4 |volume= 28 |page=21}}</ref><ref>{{cite journal |title=Goldfingers |last=Prashad |first=Sharda |journal=Canadian Business |date=Summer 2008 |issue=9 |volume=81 |pages=31–32}}</ref> In 2009, with 13.2 million ounces discovered, they issued 4 million more shares at $12.10 each, for a total of $48.4 million, in July, and then another 17.55 million shares at $14 in October to raise another $250 million to use in feasibility studies.<ref>{{cite news |title=Detour digs up financing |newspaper=Toronto Star |date=October 23, 2009 |page=B5}}</ref> At that point, it was believed they could profitably extract 560,000 ounces annually beginning in 2012 for 14 years in an open pit design. The company raised another $252-million in 2010 at $24 per share<ref>{{cite news |title=GE tilts at green power protectionism |last=Willis |first=Andrew|newspaper=The Globe and Mail |date=June 29, 2010 |page=B11}}</ref> and entered into a $125 million to purchase new haul trucks and supporting equipment from Caterpillar Inc.-supplier Toromont Industries. In 2011, the company began construction, with Kiewit Corporation on a new 135 kilometer transmission line to bring electricity to the mine site.<ref name=paved>{{cite journal |title=Paved to gold |last=Noble |first=Russell |journal=Canadian Mining Journal |date=February–March 2011 |issue=2 |volume= 132 |pages=18–21}}</ref> Detour and Kiewit would be later be fined $75,000 for environmental damage relating to the work on the transmission line, including violations such as dumping fill into water bodies and clearing land within the boundaries of Little Abitibi Provincial Park.<ref>{{cite news |title=Firms face $75,000 fines |newspaper=Daily Press |location= Timmins, Ontario|date=December 21, 2013 |page=3}}</ref>
Detour Gold's successful exploration and feasibility program, which illustrated an open pit mine could be constructed at a cost of $1.2 billion to access 14.9 million ounces of gold over 21 years and be profitable at US$625/oz (at the time the commodity price was US$1,330/oz),<ref name=paved/> caused the company to be targeted for acquisition by larger mining companies that could supply the expertise and funding for the construction and operation phases.<ref>{{cite news |title=Detour Gold's hike in reserves fuels takeover speculation |last=Mittelstaedt |first=Martin|newspaper=The Globe and Mail |date=February 3, 2011 |page=B16}}</ref><ref>{{cite news |title=Detour gold not for sale: CEO |newspaper=National Post |date=July 14, 2012 |page=FP4}}</ref> However, CEO Gerald Panneton resisted<ref>{{cite news |title=Detour Gold determined to go it alone |last=Heffernan |first=Virginia |newspaper=The Northern Miner |date=March 7, 2011 |page=C1, C4}}</ref> and pursued environmental assessment approval and opened a new regional headquarters office in Cochrane.<ref>{{cite news |title=Detour Gold ready to build new regional headquarters |last=Mclaren |first=Kate |newspaper=Daily Press |location= Timmins, Ontario|date=July 13, 2011 |page=3}}</ref> They raised C$428 million partly by issuing 12,500,000 more shares at a price of C$29.75 each in July 2011.<ref>{{cite news |title=Detour sale to raise cash for gold mine |newspaper=National Post |date=July 15, 2011 |page=FP4}}</ref> A brief spike in late-August to early-September would be the peak in Detour Gold's share price, with a closing of $39.40 on September 9, 2011. Detour would, however, continue to have success, buying out Trade Wind Ventures from its 50% stake in the adjacent 'Block A' property allowing for more expansion opportunity, selling 284,000 flow-through common shares at $35.25 to raise $10 million, acquiring federal environmental assessment approval, increasing their proven and probable reserves to 15.6 million ounces, and raising $250 million by issuing new shares all by February 2012.<ref>{{cite news |title=Detour acquires Trade Wind |newspaper=Times Colonist |location= Victoria, British Columbia|date=September 27, 2011 |page=B8}}</ref><ref>{{cite news |title=Gold project gets go-ahead |newspaper=Edmonton Journal |location= Edmonton, Alberta|date=December 24, 2011 |page=C2}}</ref>
By late-2012 Detour Gold, as construction of the mine was proceeding, was experiencing financing problems. It had to issue another 4 million shares at $26.50 each, its eighth share issuance since its IPO totaling $1.626-billion of equity and maintain $500 million of convertible bonds.<ref>{{cite news |title=Detour financing golden |last=Critchley |first=Barry |newspaper=National Post |date=November 23, 2012 |page=FP2}}</ref> The company pour its first ceremonially gold bar in February 2013 and entered into commercial production in September.<ref>{{cite web|last1=Tarikh|first1=Salma|title=Detour Gold pours first doré bars|url=http://www.northernminer.com/news/detour-gold-pours-first-dore-bars/1002099627/|website=The Northern Miner|publisher=Global Mining News|accessdate=14 August 2015}}</ref><ref>{{cite news |title=Detour Gold struggles with weak prices, lower output |last=Younglai |first=Rachelle|newspaper=The Globe and Mail |date=November 12, 2013 |page=B4}}</ref> However, throughout 2013 gold prices and the companies share price plummeted; it was the worst performing stock on the S&P/TSX Composite Index in 2013.<ref>{{cite journal |title=A Gold Stock That's Glittering |last=Borzykowski |first=Bryan |journal=Canadian Business |date=July 2014 |issue=7 |volume=87 |page=27}}</ref> Already carrying $600-million in debt, they were forced into issuing another batch of share at only $8.75 per share in June to maintain liquidity.<ref>{{cite news |title=Detour Gold: the 'ultimate risk-reward' path: Single-asset company with a young mine in Northern Ontario has been called 'an Osisko look-alike' as a potential acquisition target |last=Milstead |first=David |newspaper=The Globe and Mail |date=November 13, 2014 |page=B12}}</ref> The share price bottomed out at $2.97 in late-November and CEO Gerald Panneton resigned, to be replaced by the company's Chief Financial Officer Paul Martin.<ref>{{cite news |title=Detour Gold CEO resigns |last=Younglai |first=Rachelle|newspaper=The Globe and Mail |date=November 26, 2013 |page=B4}}</ref> They had produced 232,387 ounces of gold in 2013, below expectations but at higher-than-expected prices. The share price rebounded and they were able to sell another 16 million shares at $9.25 in February 2014 to raise $150-million.<ref>{{cite news |title=Gold miners stand to gain as ETFs fall |last=Younglai |first=Rachelle|newspaper=The Globe and Mail |date=February 19, 2014 |page=B6}}</ref>
Share prices peaked again over $30 throughout the summer of 2016, as gold prices began rising again and the company revised its reserves up to 16.9 million ounces and the mine's life expectancy up by three years.<ref>{{cite news |title=Detour gold targets lifted on improved mine plan |last=Koven|first=Peter |newspaper=National Post |date=January 27, 2016 |page=FP7}}</ref> However, the share price plunged to under $20 in the fall as gold prices fell again and the mine's expansion plan was delayed as being too costly to pursue at that time. The company fended off an unsolicited mini-tender offer made by TRC Capital Corporation, in January 2017, seeking to purchase 5,000,000 common shares, or approximately 2.86 percent of the company's shares, at a price of CA$15.25 per share.<ref>{{cite web|title=Detour Gold Responds to Mini-Tender Offer by TRC Capital|url=https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1091-tsx/dgc/27947-detour-gold-responds-to-mini-tender-offer-by-trc-capital.html|website=Junior Mining Network|accessdate=2017-01-04}}</ref> Then, on April 30, 2018, after a disappointing corporate report the share price dropped to $11, losing 30% of its value in a single day.<ref>{{cite news |title=Detour Gold shares suffer steep decline; Cash-Flow Issues |last=Dias|first=David |newspaper=National Post |date=April 30, 2018 |page=FP2}}</ref> This led to Paul Martin resigning as CEO, being replaced by the chairman of the board of directors Michael Kenyon assuming the role of interim CEO, and activist shareholder Paulson & Co. to begin lobbying to replace the board of directors.<ref>{{cite news |title=Investor mulls board fight as Detour Gold shuns sale |last=McGee|first=Niall|newspaper=The Globe and Mail |date=June 29, 2018 |page=B1}}</ref> Paulson & Co. wanted to sell Detour Gold to a larger gold companies but like his predecessors, Kenyon was opposed to selling. Barrick Gold did inquire but Detour Gold continued to resist. Both Detour Gold and Paulson & Co. filed complaints against each other with the Ontario Securities Commission for providing shareholders with false and misleading information.<ref>{{cite news |title=Detour Gold says shareholder made misleading claims |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=July 19, 2018 |page=B2}}</ref><ref>{{cite news |title=Barrick named as undisclosed bidder for Detour Gold |last=Deveau|first=Scott |newspaper=National Post |date=July 21, 2018 |page=FP4}}</ref> In the December shareholder meeting Paulson & Co.'s was successful in replacing five of the nine directors with their candidates and having Kenyon resign as CEO.<ref>{{cite news |title=Proxy firm sides with Detour Gold on proposed board recommendations |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=December 4, 2018 |page=B3}}</ref><ref>{{cite news |title=Detour Gold CEO steps down after proxy battle ends in board revamp |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=December 14, 2018 |page=B1}}</ref> Kenyon was replaced by board member Bill Williams as interim CEO until May 1 when Michael McMullen was hired.<ref>{{cite news |title=Detour Gold names new CEO after Paulson-led proxy battle |newspaper=The Globe and Mail |date=April 2, 2019 |page=B2}}</ref> On November 25, Kirkland Lake Gold announced the intended takeover of Detour Gold. The terms of the deal were that Detour Gold shareholders would receive 0.4343 of a Kirkland Lake Gold share, which at the time was a 24% premium of the market price (with Detour Gold share prices at $22.61 and Kirkland Lake Gold at $52.38)<ref>{{cite news |title=Detour Gold premium vanishes as investors dump Kirkland Lake amid takeover |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=November 26, 2019 |page=B1}}</ref> and totaled approximately $4.9 billion. Despite apprehension of shareholders on both sides, both agreed to the deal in January 28, 2020 shareholder meetings.<ref>{{cite news |title=Kirkland Lake won’t budge as large Detour Gold shareholder pushes for better offer |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=January 18, 2020 |page=B2}}</ref><ref>{{cite news |title=Kirkland Lake’s Detour takeover approved: Shareholders of both companies green light the $4.9-billion deal |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=January 29, 2020 |page=B6}}</ref> The proxy fight and takeover at Detour Gold were amongst a wave of such in the gold sector in that timeframe.<ref>{{cite news |title= Activist investors dig into mining companies for the long haul |last=Willis |first=Andrew |newspaper=The Globe and Mail |date=June 10, 2019 |page=B1}}</ref><ref>{{cite news |title=Amid flurry of mining deals, attention turns to Pretium: If other acquisitions in the sector go through, company would be one of Canada's last large single-asset gold players |last=Mcgee|first=Niall |newspaper=The Globe and Mail |date=December 9, 2019 |page=B3}}</ref> Detour Gold's stock was delisted from the Toronto Stock Exchange on February 2, 2020.
==See also== *Largest gold companies *Abitibi gold belt *List of gold mines in Canada
==References== {{Reflist}}
Category:2006 establishments in Ontario Category:Canadian companies established in 2006 Category:Companies based in Toronto Category:Companies formerly listed on the Toronto Stock Exchange Category:Gold mining companies of Canada