Dynacor Group’s (TSX: DNG) largest shareholder has gone activist, urging fellow holders to withhold votes for all five incumbent directors at the company’s June 19 annual meeting and laying out a sprawling list of governance complaints that the activist says management has refused to answer.
iolite Partners Ltd., which holds roughly 7% of the artisanal gold processor, published an open letter on Monday arguing Dynacor’s recent “transformational restructuring” of its Peruvian operations was anything but. The Switzerland-based fund, led by Robert Leitz, has been agitating at Dynacor for more than a year, but the latest salvo escalates the campaign considerably.
At the heart of iolite’s grievance is a quiet management overhaul at Veta Dorada, the Peruvian subsidiary that generates 100% of Dynacor’s revenue. Since mid 2024, more than half of the unit’s 550-person workforce has been replaced, including nearly the entire legacy leadership team. iolite says the rationale was never disclosed to shareholders and that the new executives installed to lead the turnaround were themselves dismissed on April 28, just six days after the board declared the restructuring complete.
There is also the matter of SUNAT. iolite notes that Peru’s tax and customs authority placed every Veta Dorada export shipment under “red channel” classification, its strictest control regime, for a continuous four-month stretch running from January 10 through May 14. That designation, the activist says, was still active when Dynacor declared operations stabilized on April 22. Management has characterized the classification as routine.
iolite also flags an external review the board commissioned but for which no written report, scope, methodology, or even the name of the reviewing firm has been disclosed. Chairman Pierre Lépine has stepped down, and Daniel Misiano was quietly removed from the slate of director nominees in May after being announced as the next CEO in April.
The fund wants seven things before the AGM, including the immediate identification of a new CEO and chairman, a genuinely independent governance review with a public written report, and a forensic operational review covering January 2024 to present.
Shareholders are also being urged to vote against a 650,000 stock option replenishment and to override the default proxy, which currently routes votes to outgoing CEO Jean Martineau.
Dynacor Group last traded at $6.07 on the TSX.
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