GhanaOil & Gas/Mining

Golden Star sells Bogoso-Prestea gold mine for US$95 million

Golden Star says the sale strengthens its balance sheet and allows the company to accelerate the growth and development of the large resource base at its Wassa mine.

Ghana News Agency (Accra) — Golden Star Resources Ltd said it has entered into an agreement with Future Global Resources (FGR) for the sale of a 90% stake in the Bogoso-Prestea Gold Mine.

The agreement stipulates that an initial purchase price of $55 million shall be paid with a further contingent component of up to US$40 million staged payments to ensure FGR focuses investment capacity on the asset itself while providing Golden Star with exposure to its long-term growth potential.

A statement from the mining company noted that procedures were planned to continue at the Prestea underground operation, which includes the use of alimak mining on 24 Level and long hole open stoping mining activities on the newly developed 17 Level.

“Following the acquisition, FGR intends to review the entire Bogoso-Prestea project portfolio, which includes the significant refractory sulfide resource, and an extensive tenement package with exploration potential,” the statement said.

The sale, according to the statement strengthens Golden Star’s balance sheet and allows the company to accelerate the growth and development of the large resource base at the Wassa mine, and increase exploration activities in the wider Wassa-HBB project area.

Following the satisfaction of the closing conditions in the agreement, including obtaining the required government approvals, the transaction is expected to complete no later than 30 September 2020.

Andrew Wray, president and chief executive officer of Golden Star, said: “We are pleased to announce the sale agreement for Bogoso-Prestea as this brings fresh focus and investment capacity to the asset while enabling us to concentrate our financial and technical resources on accelerating the delivery of value from Wassa as it continues to develop into a large-scale, long-life and cash generative underground mine.”

Wray said, “The sale strengthens our balance sheet by providing a cash inflow of $30m by 2023 and Golden Star will be able to participate in the upside offered by the Bogoso Sulfide Project through the Contingent Payment mechanism which could deliver up to a further $40 million to the business.” 

He said, “Given the resulting improvement in the financial position of the Company, we expect to now be able to accelerate our investment at Wassa and within our existing exploration pipeline and look for other opportunities to further expand our business.

Bogoso-Prestea will also benefit from having an owner solely focused on delivering the turnaround of the underground operation and assessing the significant potential of the sulfide resources. As a result, we see this Transaction as positive for both FGR and Golden Star, our employees, Ghana, the host communities and all of our other stakeholders.”

Glenn Baldwin, chief executive officer of Future Global Resources, said: “FGR is delighted to acquire 90% of the Bogoso-Prestea Gold Mine as our first production asset. FGR is looking forward to engaging with the workforce, communities, and Government of Ghana, developing constructive and sustainable partnerships.

We have confidence in the potential for additional discoveries and extensions to the underground mineral resources, through which we hope to generate real value by investing in the workforce and our relationships with local stakeholders.” 

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Ghana News Agency
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