TORONTO – Paulson & Co has convinced shareholders of Detour Gold to overthrow the bulk of the Canadian miner’s board of directors, including its interim CEO, ending a nasty six-month proxy battle.

Five of the Paulson-backed nominees were chosen, while Detour chairman Alex Morrison and interim CEO Michael Kenyon were removed from the board during a special shareholders’ meeting Thursday in Toronto, the miner said in a statement, confirming an earlier report by Bloomberg.

Kenyon has resigned as CEO and James Gowans, who was one of three new directors appointed in August, will become chairman, Detour said. The board will be fixed at nine members.

Marcelo Kim, a partner at Paulson who was on the hedge fund’s slate of board nominees, was not elected.

“Seven out of eight directors have changed since we started this campaign,” Kim said at the 18-minute shareholders’ meeting that was closed to media. “But it’s not about who won or who lost, it’s about what’s best for the company.”

DETOUR DIRECTORS VOTED OFF: Morrison, Kenyon, Jonathan Rubenstein, Lisa Colnett, Edward Dowling Jr.

PAULSON NOMINEES VOTED IN: Steven Feldman, Christopher Robison, Ronald Simkus, William Williams, Dawn Whittaker.

Detour rose 2% to close at C$11.08 Thursday in Toronto. That trimmed this year’s decline to 25%.

Paulson may use the results to change the management structure at Detour and look for a new CEO outside the company, Daniel Earle, an analyst at TD Securities, said in a research note. A sale of Detour could also be in the cards.

“We would expect the company to now open itself up to potential strategic alternatives without the condition that potential bids represent superior value to executing on its current mine plan,” Earle said.

Paulson began the proxy battle in June with a call for the Toronto-based company to consider putting itself up for sale. The results announced Thursday provided some vindication for founder John Paulson, who personally lobbied investors in the final weeks of the battle, telling them Detour’s board “makes shareholders the laughingstock of the investment community.”

‘CAPABLE HANDS’
“We support Detour Gold’s new board of directors and believe that our investment is now in the capable hands of experienced, independent and professional directors,” John Paulson said Thursday in a statement from the hedge fund.

Paulson also spearheaded the recent creation of the Shareholders’ Gold Council, bringing together large gold investors to research issues like executive pay and board compensation.

Paulson & Co. will assume an activist role when “forced,” but prefers to remain passive, Kim said. “We don’t do this often in any kind of sector.”

The vote came in spite of the advice of two shareholder advisory groups that had recommended Detour make less dramatic changes to its board than Paulson wanted. Glass Lewis & Co suggested the miner replace three board members, including Morrison, while Institutional Shareholder Services urged investors to support Detour’s proposal to elect just two Paulson nominees. The New York-based hedge fund had pushed for “wholesale change” with eight of its nine directors replaced, including Kenyon.

ACRIMONIOUS BATTLE
After Paulson & Co. took its complaints with Detour public in June, initially pushing for the miner to consider putting itself up for sale, the battle became increasingly acrimonious.

Each side had accused the other of “ bullying,” and Detour served Paulson with a lawsuit the hedge fund called “frivolous.” Shareholders had been bombarded with material, as the two sides lobbed news releases, presentations, letters, and an animated video at each other, often responding within hours to fresh accusations. Meanwhile, Paulson increased its stake in Detour, from 5.4% at the start of the battle to 5.7% in November.

Detour isn’t the only Canadian miner to be targeted for a shake up. Private equity firm Waterton Global Resource Management is planning to nominate a majority slate of directors and propose a new CEO at Hudbay Minerals in an effort to improve its performance.