Golden Star Resources has announced the sale of its 90 per cent stake in the Bogoso-Prestea Gold Mine to Future Global Resources(FGR) at a purchase price of USD 95million.
In a statement copied to BusinessGhana, the agreement entails an initial purchase price of USD55 million with a further contingent component of up to USD40 million.
The staged payments are to ensure FGR focuses investment capacity on the asset itself while providing Golden Star with exposure to its long-term growth potential.
It further noted that FGR would assume Bogoso-Prestea’s assets and liabilities whilst Blue International Holdings Limited (the major shareholder for FGR) would act as guarantor for the payments.
The statement also said that FGR would review the entire Bogoso-Prestea project portfolio, which includes the significant refractory sulfide resource, and an extensive tenement package with exploration potential.
The sale is expected to strengthen Golden Star’s balance sheet and allow 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 be complete completed no later than September 30, 2020.
President and Chief Executive Officer of Golden Star, Andrew 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.
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” he added.
Glenn Baldwin, Chief Executive Officer of Future Global Resources said “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.
” He expressed FGR’s delight at the acquisition disclosing that it was their first production asset.
He also said that they were looking at engaging with the workforce, community and government to develop constructive and sustainable partnerships.