Gold producer Dynacor’s largest shareholder unpacks grave concerns over the group’s governance

Iolite, which is Dynacor’s largest investor, says Dynacor needs appropriate and proper oversight, direction and leadership, which has not been the case.

“Things need to change in the best interest of the company and the business in which shareholders have invested.

“Days after the company announced the conclusion of an independent investigation and the completion of a ‘transformational restructuring’, the architects of that restructuring were terminated,” Iolite explains, referring to the senior leadership movements in the group, including at Veta Dorada – Dynacor’s Peruvian subsidiary generating all of the group’s revenue.

Iolite mentions that Dynacor’s chairperson Pierre Lépine stepped down and that designated president and CEO Daniel Misiano was “quietly removed” from the ballot to be elected as a director at the next AGM without explanation.

Since mid-2024, Dynacor undertook what it described to shareholders as a “strengthening” of its Peruvian operations.

In reality, Iolite states, what took place was a wholesale replacement of almost the entire leadership team that had built this business over two decades, and more than half of its 550-person workforce.

The consequences were significant and, for the most part, never disclosed.

The directors that are now asking to be re-elected initiated the “restructuring”, oversaw it, failed to provide shareholders with appropriate disclosure about its purpose, details and consequences, but still declared it complete on April 22 – and then dismissed most of the very team they had installed to execute it.

Iolite elaborates that Dynacor managed to build a best-in-class reputation for a responsible, traceable artisanal gold supply chain in Peru over the past two decades – a model that, run properly, generates strong and predictable returns.

The gold-price environment of the past two years has been exceptionally supportive. A well-run business with Dynacor’s model should have captured significant growth and meaningful windfall – much more than the company did, according to Iolite, which is owing to the significant dismissals having occurred at Veta Dorada that remain unexplained to shareholders since mid-2024.

Iolite confirms that Dynacor did announce an external investigation, however, this was by way of an “ambiguous and oddly worded restructuring announcement” that never disclosed its scope, who conducted it nor their findings.

For context, Dynacor on April 22 announced completion of its transformative restructuring and that operations had stabilised, however, six days later the two most senior leaders of the Peruvian subsidiary were dismissed without explanation.

Iolite says shareholders deserve proper governance and transparency, especially as Dynacor represents one of the most attractive opportunities in the small-capitalistion mining sector.

Iolite is calling on fellow shareholders to withhold their votes for the re-election of all five incumbent directors responsible for operations, audit & risk, environment, social and governance, and disclosure at the AGM on June 19.

Iolite points out that Jean Martineau is the outgoing president and CEO under whose leadership every matter occurred – the unexplained management overhaul, the non-disclosure, the missed windfall, the April 22 victory announcement and the dismissals six days later.

He is also the default proxyholder on the corporation’s proxy form, meaning shareholders who do not act will hand their votes to Martineau.

Pierre Beliveau, Rocio Rodriguez-Perrot, Rejean Gourde, and Isabelle Rocha are the incumbent nonexecutive directors who collectively oversaw the overhaul and related approach to disclosure about its consequences, commissioned and controlled the external review, drew their own conclusions from it, excluded Iolite’s governance proposals from the proxy circular, and authorised the litigation against former employees and business partners who came forward or raised questions.

Iolite emphasises that the question before shareholders now is not whether these individuals acted in good faith, but whether a board that initiated an unexplained overhaul, was not transparent about its consequences, declared victory prematurely and responded to scrutiny with litigation is the right board to oversee what comes next for Dynacor.

Iolite is calling on the board to provide immediate identification of the next president and CEO, as well as chairperson, before shareholders are asked to vote, not after. Iolite is also calling for an independent governance review conducted by and a report provided by external advisers.

Iolite also recommends a forensic review of the corporation’s operations from January 2024 to date, with findings reported directly to shareholders.

Dynacor’s largest shareholder hopes that leaders with demonstrated capability and integrity will be appointed to operate the business at full capacity and to rebuild the reputation for responsible sourcing that Dynacor spent two decades establishing.

For context, Iolite says it spent the last year trying to discuss its concerns with the leadership of the company, however, it was met with bare denials.

In addition to its main processing facilities in Peru, Dynacor is also building a 50 t/d pilot plant in Kédougou, Senegal, and is working to start processing activity in Ecuador.