Golden Star Resources Ltd has entered into a binding agreement for the sale of its 90 percent interest in the Bogoso-Prestea Gold Mine to Future Global Resources Limited (“FGR”) for a purchase price of up to US$95 million.
Under this transaction, there is a purchase price of US$55 million with a further contingent component of up to US$40 million.
The Transaction is anticipated to close by no later than September 30, 2020 upon satisfaction of the condition’s precedent set forth in the Agreement. These include approval of the relevant Minister in Ghana and the restructuring of the Royal Gold Streaming Agreement and Macquarie loan facility.
The staged payments are meant to ensure FGR focuses investment capacity on the asset itself while providing Golden Star with exposure to its long-term growth potential.
Golden Star, FGR and RGLD Gold AG are in advanced discussions to amend the stream agreement that would see, subject to the completion of terms, negotiation of definitive agreements and receipt of board of directors’ approvals, a separation of the obligations under the agreement as between the Wassa and Bogoso-Prestea mines.
Caystar Finance Co. – a wholly-owned subsidiary of Golden Star – and RGLD Gold AG – an affiliate of Royal Gold, Inc. – are parties to a streaming agreement covering the Wassa and Bogoso-Prestea mines.
Andrew Wray, President and Chief Executive Officer of Golden Star, commented: “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.
“The sale strengthens our balance sheet by providing a cash inflow of US$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 US$40 million to the 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, commented: “FGR is delighted to acquire 90 percent 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.”