TORONTO — Iamgold has agreed to several demands from an activist investor, including the appointment of three new directors and a new chair, as it looks to avoid a costly and distracting proxy battle.
Under the agreement with RCF Management, Maryse Bélanger, David Smith and Ian Ashby have been appointed to as independent directors to the board. Bélanger, former president of Atlantic Gold Corp., has also been appointed chair, replacing interim chair Kevin O'Kane effective immediately.
The agreement comes less than two weeks after Iamgold said it was open to appointing three new directors to avoid a proxy fight, but said that the appointment of Bélanger as chair was an "unacceptable demand," saying it would give RCF "de facto control of the company."
Iamgold had also said in its Feb. 2 release that it would not give RCF nominees control of the committee hiring of the company's next CEO, but the latest agreement with RCF has Bélanger and Smith making up two of the three members of the board's CEO Search Committee.
The company also said at the time that it would not cover RCF's costs of settlement negotiations, but has now agreed to cover up to $1.2 million in related expenses.
RCF, which holds a 5.2 per cent stake in Iamgold, has called for changes at the company that has operations in North America, South America and West Africa. It has said that it does not believe that interim chief executive Daniella Dimitrov is qualified to lead a turnaround at the company.
Dimitrov was only appointed to the role in January after the sudden resignation of former chief executive Gordon Stothart.
The leadership changes come as Iamgold works to bring its Côté Gold project in northeastern Ontario into production, while it conducts a strategic review of its Rosebel mine in Suriname and its Westwood mine in Quebec.
Iamgold also operates the Essakane gold mine in Burkina Faso, though convoys to its operations were subject to multiple attacks last year and the government was overthrown in a coup in January.
The company's share price has been under pressure in recent years despite a spike in gold prices. Iamgold was trading as high as $8.29 a share in 2017 while gold was under US$1,300 an ounce, but in recent months has been trading under $4 a share as gold trades above US$1,800 an ounce.
RBC analyst Josh Wolfson said in a note that a company turnaround is contingent on a synchronized execution of the Côté Gold project, an improvement or divestiture of its operating asset base, and elevated gold prices being sustained.
He said that the deal announced Monday largely addresses key concerns publicly identified by RCF.
"This is the first step in establishing a framework for a potential turnaround at Iamgold."
To make space for the new directors, Iamgold said Richard Hall has stepped down from the board effective immediately and Ronald Gagel will resign from the board following the announcement of the company's 2021 year-end results. Tim Snider will not stand for re-election at the company's 2022 annual meeting.
A committee including the current nominating and corporate governance committee and the three new appointees to the board will recommend one additional director to replace Gagel.
The company says that following its 2022 annual meeting its board will include no more than eight independent directors, plus one executive director, once a permanent CEO is appointed.
This report by The Canadian Press was first published Feb. 14, 2022.
Companies in this story: (TSX:IAG)
The Canadian Press
